Tag Archives: Peru

Sparking the Entrepreneurial Spirit: Teaching Youth How Democracy Delivers

Daniel Cordova accepts his Leading Practices award from CIPE Executive Director John D. Sullivan. (Photo: Staff)

Recent events around the world have shown the power of youth.  The Arab Spring has been fueled by young people who became disillusioned with the status quo and are ready for change.  In India, it was the youth that lead an anti-corruption protest movement.  But young people are more than just a conduit for political change: as future leaders and entrepreneurs they are a powerful force for economic development.  However, in many developing countries, young people do not understand the role they can play in a free-market economy, or are simply disinterested.

Overcoming this challenge and encouraging young people to participate was the focus of an event at the National Endowment for Democracy titled, “Democracy, Entrepreneurship and the Inclusion of Youth.”  A presentation by Daniel Cordova, president of CIPE partner Instituto Invertir in Peru, highlighted the fact that one of the main challenges facing free-market reforms in developing countries is the ambivalence that youth feel toward the relationship between democracy and economic development.

According to Cordova, 70% of Peruvian youth are comfortable with authoritarian regimes and feel that democracy does not work correctly.  This stems from what he calls “The Latin American Tragedy of the 20th Century.” In this tragedy, the role of the hero is played by democracy whose tragic flaw is being susceptible to populist policies resulting in economic recession.  This leads to a climactic coup d’état, where an authoritarian government restricts political freedom, but institutes good economic policies.  This cycle has repeated several times, and has created the perception that democracy is generally bad for the economy.

Instituto Invertir’s EmprendeAhora program, winner of CIPE’s 2011 Leading Practices Contest, focuses on promoting entrepreneurship and raising awareness of democracy, market economies, the rule of law, and the role of private enterprise.  A survey of EmprendeAhora Fellows prior to the program showed that only 39% disagreed with the idea that a free-market economy is only advantageous for large companies.  Similarly, 66% of Peruvian youth do not even give credence to the possibility of becoming entrepreneurs, instead believing that employment by an existing firm or government agency is the only way to make a living.

Focusing on the rural provinces where social conflict is rife, EmprendeAhora seeks to change participants’ assumptions about the free market.  Over the course of several months, the program engages Fellows on topics including developing business plans, corporate social responsibility, creativity and innovation.  All participants are required to complete a final project which includes a business plan, and a video on the relationship between democracy and the free-market.  Also included is a leadership component in which participants conduct a training session in their home towns drawing on what they have learned in the program.  The fellows who produce the best business plans are offered the option to report to investors in an attempt to secure funding for their businesses.

In the end, the participants of EmprendeAhora return to their home villages and towns with a fresh view on how democracy can deliver through entrepreneurship and the free market.  Since 2008, EmprendeAhora alumni have started over 40 companies spanning industries including ecotourism, IT, and architecture.

As Edith Peña (Class of 2008) said “EmprendeAhora sparked my entrepreneurial spirit…it’d never occurred to me to open my own business.”  The alumni also continue to educate the rural public about the benefits of a free market.

Though EmprendeAhora and similar CIPE projects around the world continue to show results and engage the youth, the link between youth, entrepreneurship, and economic development is generally not given due respect.  However the tide seems to be changing.  The Graduate School of Business at Stanford University recently received a $150 million donation to explore the linkages between economic development and entrepreneurship in developing countries.  Using the money, Stanford established the Institute for Innovation in Developing Economies on the belief “that a critical route for economic growth is through the creation of entrepreneurial ventures.”  The institute, known as SEED, is envisioned as having three directives: research, educate, and support.  By educating students from around the world in the skills and concepts necessary to become effective entrepreneurs hopefully Stanford will effectively replicate EmprendeAhora’s success on a global scale.

CIPE Latin America Program Officer Brent Ruth recently visited Peru to speak with some EmprendeAhora graduates. Read about his trip here.

Leadership in Lambayeque

Karla Diaz is interviewed about the EmprendeAhora program.

This article is part of a series of interviews with participants of Instituto Invertir’s EmprendeAhora entrepreneurship and leadership training program in Peru.

Continuing my grand tour of Peru to meet EmprendeAhora alumni, I headed to the desert-like coastal city of Chiclayo, capital of Lambayeque region and fourth most populous city in the country. Forty students from the Universidad Nacional Pedro Ruiz Gallo, Universidad Católica Santo Toribio de Mogrovejo, and Universidad Señor de Sipan in Lambayeque have participated in the program since 2008. In honor of International Women’s Day, it seems appropriate to highlight how two alumni, Karla Díaz (2009) and Estrella Carrillo (2010), successfully incorporated lessons from EmprendeAhora into their lives.

For Karla Diaz, the leadership component of EmprendeAhora was just as important, if not more so, than the courses on entrepreneurship. As part of the program students are taught communication and teambuilding skills, how to create their own vision and mission, and about the importance of social responsibility. Additionally, students learn about volunteering through a volunteer workshop and participation in a social entrepreneurship fair where they meet with representatives from youth volunteer associations. Karla had always thought of herself as a leader and when she was growing up she wanted to create an organization that provided some sort of benefit to the public good. She just never had a concrete plan.

Motivated by what they learned and experienced during EmprendeAhora 2009, Karla and several of her fellow alumni decided to create a branch of Voluntades, a youth volunteer organization, in Chiclayo. In early 2010 they kicked off their first program organizing fun activities while sharing positive values with youth ages 8-13 years old at the Aldea Virgen de la Paz, a village for orphans and troubled youth whose families cannot support them.

After two years, what began with six volunteers (almost all of them EmprendeAhora alumni) has multiplied into a group of around 30 volunteers, proving that these alumni have implemented their leadership skills and inspired other young people to volunteer. I was incredibly fortunate to visit the Aldea one Sunday afternoon to attend the weekly Voluntades activity with the young people living there. The volunteers led the children in singing, dancing, games, and creative thinking activities.

When I spoke with the director of the Aldea, he told me that they often receive volunteer groups interested in working with the children. The cooperation with Voluntades, however, is by far the most formal and consistent relationship, with activities every Sunday for the past two years. He said, “unconsciously the children are registering what they see, hear, and learn during the games. During the week they have a lot of homework and classes and it is good for them to have a fun weekend activity.”

As anyone who has ever spoken with an 8-13 year old can imagine, when I asked some of the children what they thought of Voluntades, the responses I got amounted to, “sometimes we like it, sometimes we don’t.” While there were some activities in which it was more difficult to engage the children, it was quite clear that the children looked up to the volunteers and relationships had been formed.

Karla has served on the board of Voluntades since its creation, in addition to managing various areas like human resources, project coordination, and communications. Although Karla does not have her own business, it does not mean that EmprendeAhora did not awaken her entrepreneurial spirit. Actually, she now sees everything as a business. This has helped her to more quickly develop and execute concrete plans regarding volunteer initiatives, in the workplace, and in her personal life.

Speaking of the workplace, Karla is the host of two television shows based in Chiclayo. Therefore she has plenty of experience speaking in front of an audience – both on camera and in person. In January her audience was an auditorium full of 120 university students waiting to hear her discuss the experience of Voluntades in Chiclayo. Karla was one of the program alums at the University of Lima for EmprendeAhora 2012 as a winner of the “successful alumni contest.” The contest brings several alums to each educational session in order to provide successful examples of entrepreneurial and leadership initiatives and motivate each new class.

While in Chiclayo, I also had the chance to meet with Estrella Carillo.

Unlike many of the other alumni with whom I met, Estrella never imagined herself as an entrepreneur prior to EmprendeAhora. She studied law and was on the path to becoming an attorney. Nonetheless, when she received an email from her university about the program she decided to apply for the opportunity to meet people from other parts of the country.

What captivated her attention during EmprendeAhora 2010, however, were the courses on business planning. Going through the process of developing a business plan idea, devising business strategies, and learning about customers and costs was a highlight of the program for Estrella. The program overall taught her that opening a business was possible even if it didn’t necessarily fit the career path she was on.

Always a fan of fashion, Estrella recognized that the demand for fashionable, trendy women’s clothing in Chiclayo was far greater than the supply. Starting with a small investment from her personal savings, she began taking monthly trips to Lima to purchase clothing from stores that were not available in Chiclayo and reselling to her friends. Rather than just buying and selling any type of clothes, Estrella customizes the items she purchases based on her client’s style preferences and needs. In a sense, Estrella acts as a personal shopper. Currently she serves around 15 clients – friends or friends of friends who heard about the shopping service through word of mouth.

EmprendeAhora not only motivated Estrella to start a business, but also reignited a desire to be involved in more social causes, including the environment and community development, and doing things for others. She now volunteers at a non-profit organization dealing with domestic violence and abuse towards women. Estrella has continued to pursue her legal degree because she sees her legal background as a tool to better serve these social causes in the future. In fact, she is one of approximately 130 young legal professionals worldwide selected for a nine week legal fellowship in the United States this summer.

Because Estrella has continued with her education in the legal field, the business has remained a part-time, informal endeavor for the time being. However, she sees the business as her true passion and hopes that in a few years time she can expand it into something more formal by opening a shop providing personalized styling services.

Although I have highlighted two women in this article, EmprendeAhora provides an opportunity for students of any gender to become active citizens and agents of change in their communities. Over the years Instituto Invertir has tried to maintain a gender balance among the participants, but there is no set quota. Of the 2012 participants, 65% are female. On International Women’s Day it is important to share the EmprendeAhora model as it is a good example of a program that benefits women without specifically targeting them.

Iquitos Part 2: Chocolate, Toys, and Entrepreneurial Dreams

Gerson Casas's toy shop in Iquitos. (Photo: Staff)

This article is part of a series of interviews with participants of Instituto Invertir’s EmprendeAhora entrepreneurship and leadership training program in Peru. Read the introduction to the series and Part 1.

In order to promote the EmprendeAhora program and encourage new applicants from throughout Peru, each year CIPE partner Instituto Invertir conducts an extensive promotional campaign in every major regional university. Local teams made up of EmprendeAhora alumni are in charge of distributing materials in their universities and in other youth spaces in their cities (Internet cafes, church, library, etc.). The alumni also give informative talks at universities and speak to the local media. It was through this promotional campaign in the summer of 2010 that Gerson Casas learned about the benefits of EmprendeAhora from Coco D’Azevedo, the 2008 alum profiled in a previous post.

Like Coco, Gerson is from Iquitos, Peru and was drawn to the program for the opportunity to travel to Lima, meet new people, and learn more about being an entrepreneur. After completing the rigorous application process, Gerson was selected to attend EmprendeAhora 2010.

According to Gerson, the EmprendeAhora business plan competition was the most important aspect of the program. As part of the competition, students are divided into groups of three to five from the same city to work together to choose a business idea that could eventually be launched in their region to create employment and economic growth. Students work progressively on the projects throughout the three EmprendeAhora sessions with an assigned coach – a professor from the university or a successful entrepreneur.

Gerson and his three partners came up with the idea for a chocolate company called Chocohuayo featuring chocolates filled with aguaje and camu camu, two fruits native to the Loreto region. They worked with their coach, Margarita Reyes, on their plans for production, marketing, and costs. In Iquitos the group conducted surveys as part of their market research and while in Lima for the sessions the group visited a number of chocolatiers to see what other aspects of the business they should incorporate into their plan. Although Chocohuayo did not win the business plan competition, they were selected as one of ten finalists out of the 40 different business plans.

Jump ahead to January 2012 and I find myself sitting in a small workshop in Iquitos. Unfortunately there are no tasty chocolates to eat; rather, I am surrounded by colorful wooden puppies, airplanes, and race cars. The shop, called Chiki Madera, is Gerson’s wooden toy business. Upon completion of EmprendeAhora, Gerson didn’t need to look very far for a new business opportunity. His father owns a furniture factory and he grew up making small wood carvings with scraps left over from the doors, chairs, and tables that his father was building.

Implementing many of the things he learned during the EmprendeAhora business plan competition, Gerson resourcefully utilized his father’s carpentry tools, shop space, and scrap wood and began crafting and selling wooden toys, a product that none of the other carpenters in Iquitos were producing. His main startup costs were for the paint, varnish, and display cases, making it fairly easy to begin with little capital.

While Gerson is the owner and sole full time employee of Chiki Madera, this past Christmas he contracted two helpers to complete all of the toy orders in time for the holidays. He also receives some help from his mother – a restaurant owner – in creating the toy designs. Gerson admits too that he gets design inspiration from television and even from the construction workers digging up the street in front of his shop. Case in point: his newest design is a backhoe tractor.

Gerson is happy running his own business in Iquitos, serving a local clientele and occasionally traveling to fairs to sell his products. In 2011, Chiki Madera was one of more than 400 exhibitors with a booth at Perú Gift, an international fair specialized in gifts and decoration. Approximately 8,000 national and international visitors attend each year. There he made contacts that could help him reach his goal of exporting his products. Regardless of whether he ultimately exports, he sees his current work as preferable to studying another career or working in a company, the alternatives he envisions had he not attended EmprendeAhora.

Having witnessed the positive stories of Coco and Gerson, and with my mementos from Iquitos in tow – brochures from Coco and a red, white, and blue wooden puppy that I couldn’t resist purchasing from Gerson – I boarded a flight back to Lima for the first session of EmprendeAhora 2012.

Iquitos Part 1: Don’t Forget Your Running Shoes

 

Grupo A&E's headquarters in Iquitos, Peru. (Photo: Staff)

This article is part of a series of interviews with participants of Instituto Invertir’s EmprendeAhora entrepreneurship and leadership training program in Peru. Read the introduction to the series and Part 2.

If you are an avid runner looking for a unique location for your next race, consider checking out the jungle scenery and oxygen-rich air in the Amazonian city of Iquitos, Peru. On February 12, the main city streets were free of the normally ubiquitous swarm of motorcycles and three wheel rickshaws called moto-kars as nearly 500 runners participated in Iquitos’ first ever Amazonica 10 kilometer marathon – an event designed to engage the community in the promotion of sport and healthy living.

The race was organized by Grupo A&E, a business founded and operated by Jorge “Coco” D’Azevedo, alum of the first EmprendeAhora (formerly LiderAcción) program in 2008. With this first marathon, Grupo A&E added to an already large list of services that it offers, including: training in business management, leadership, motivation, and entrepreneurship; organizing academic, cultural, and entertainment events; and conducting surveys and market research.

In mid-January I had the opportunity to meet Coco in the Grupo A&E office in Iquitos to learn about his background prior to EmprendeAhora, hear about his experience in the program, his business venture, and what it is like owning and operating a business.

As the son of two university employees, Coco grew up thinking he would be an employee somewhere too. He got the entrepreneurial bug in high school, however, when he and his friends began noticing the difference between those who had money and those who did not. Based on their observations, business owners had money, employees did not.

But while in university Coco reverted to the dependent mentality and worked at various internships while trying to decide which career he would pursue. Then his mother told him about EmprendeAhora – a scholarship program which she heard about on RPP Noticias. After a bit of investigating, Coco’s desire to learn about entrepreneurship drove him to apply. It didn’t hurt that the scholarship covered 100% of the program costs – something rare for Iquitos.

About the program, Coco said, “it is an experience that changed me and made me see other points of view and other ways of life.” EmprendeAhora showed him that being an entrepreneur, having his own business and working for himself was an achievable alternative to working as an employee somewhere. Coming from a university in Iquitos with a leftist anti-business approach, the lessons and practical application of business concepts during EmprendeAhora helped Coco better understand what it means to live (and make a living) in a democratic, free-market economy.

After completing the EmprendeAhora program in early 2009, Coco started a precursor to Grupo A&E called LIVE (Leadership, Values, and Entrepreneurship). The core mission was to strengthen entrepreneurship and leadership skills among Peruvians – starting at the regional level. Coco included the leadership theme because it was something that he was particularly drawn to and felt was vital as a result of EmprendeAhora.

In the first year of operation, LIVE organized two major conferences at the regional level: the 1st Congress on Leadership and Entrepreneurship, and the National Congress of Successful Women. In 2010, LIVE changed its name to Grupo A&E, registered and obtained its Tax Identification Number. This year nearly 1,000 people attended events on entrepreneurship and leadership organized and led by Grupo A&E.

In late 2011, the business expanded to include production of a television program entitled “Somos Empresa Loreto (We are Business Loreto).” The objective of the program is to show off cases of entrepreneurs, businessmen and women, and businesses in the Loreto region, sharing their experiences and advice for others that wish to create their own businesses.

Another new line of work builds off of the $6,000 investment in a professional camera for the television program. Branching out into offering marketing services, Grupo A&E has begun filming commercials for other businesses in the region. Because the camera was already purchased for the purpose of the television program, the money made from this marketing service is pure profit.

In the last four months of 2011, Grupo A&E’s costs averaged around 45% of the total income. With the new services and low overhead costs, this number is likely to improve in the first half of 2012. Coco is confident to say the least. When asked what his Plan B is, he said, “there is no Plan B because this is the company that I like and want to have and it is certainly going to work!”

With so many different services and activities going on, Grupo A&E is clearly not a one-man show. In fact, Coco has two business partners in this venture and three employees: an editor, a production assistant, and an administrator. An accountant is shared with the restaurant of one of his business partners. Although Coco oversees all of the activity, his title on his business card is simple: Motivator.

It is a fitting title. During my time in Iquitos it was hard not to be motivated by such a passionate person with big ideas for his city and country. Not to mention by someone that took the risk of starting his own business at such a young age with the added pressures of a wife and young child at home. That said there are days when Coco has to give a little extra motivation to himself. “Perseverance is the key characteristic of an entrepreneur. In my experience, it is difficult, things do not go your way, but you must persevere.”

The idea behind EmprendeAhora was to create a training program that promotes entrepreneurship and market economy as the best way to overcome poverty in Peru. While many alumni have gone on to create successful businesses selling products or other types of services; through its training programs, television show, and marketing services, Grupo A&E has made a business out of promoting the basic concepts of EmprendeAhora and sharing it with a wider audience.

The success of the Amazonica 10K on February 12 may lead to a surge in marathons in Iquitos – promoting a healthier life style and community engagement. Here’s hoping that Coco’s success as an entrepreneur, leader, and motivator leads to a similar swell in the number of entrepreneurs – promoting a more democratic and economically developed Peru.

Spreading Entrepreneurship in Peru

A student's graduation certificate hangs on the wall of his workshop. (Photo: CIPE Staff)

Since I first visited two years ago, Instituto Invertir’s EmprendeAhora (formerly LíderAcción) entrepreneurship education program has gone from success to success, including winning CIPE’s inaugural  Leading Practices contest in 2011. In three years, the program — which is targeted at university students from the poorest regions of Peru — has trained 430 students who have gone on to create at least 40 new businesses and arrange leadership and entrepreneurship workshops for more than 12,000 other students. Surveys have consistently shown positive changes in the attitudes of EmprendeAhora alumni towards democracy, as well as more optimistic perceptions about how the market economy works and their ability to participate in it.

These aggregate statistics are great, and will certainly be strengthened by the 120 students who began the program in January 2012. Yet all too often we are satisfied with reporting “big picture” numbers and neglect follow up at the individual level where real change is initiated.

Last month I was enlisted to catch up with some of the alumni to find out what they are doing now and get a better understanding of how the program has had a positive impact on the youth themselves, their families, their communities, and also find out what makes the program work.

I plotted my course for a 10 day jaunt through Peru that involved stops in the cities of Iquitos, Chiclayo, and Huancayo. The cities were selected not only because they are home to some of the more successful alumni, but also because each represents a distinct geographical region of the country.

During my trip, I interviewed more than 25 alumni, regional and municipal government authorities, university professors, program speakers, and private sector sponsors. Based on these interviews I was able to draw some basic conclusions about why the program works.

One of the most important aspects of the program is the opportunity it provides for students to meet intelligent and talented peers from all over the country. Due to the natural isolation provided by the Andes Mountains and the Amazon rainforest, Peru is one of the most culturally diverse countries in South America.  The opportunity to meet peers from other regions not only increases the students’ understanding of their country, it also creates a broad network of contacts with which to share experiences. Many alumni said that the relationships built over the course of the program created the necessary motivation for them to act on their ideas once they returned to their communities. A sense of friendly competition certainly exists among program alumni.

The fact that the program is entirely free is another major factor in its success. It gives an advantage to bright, motivated students who may lack the financial resources. Given that it is incredibly rare for young people in the poorer regions of Peru to have the opportunity to participate in a training program like this for free, all the alumni I spoke with recalled having the initial reaction: “What is the catch?”

The only “catch,” if it can be called that, is that participants are required to attend all sessions and complete all assignments in order to receive their certificate. While there may always be a few free-riders, the majority of program alums shared a sense of indebtedness and a desire to go above and beyond to make the most of what they had learned.

As I traveled around Peru, I noticed that there were a number of youth training programs in the regions I visited, many of them run by local governments, Chambers, and associations. These courses delve into marketing, costs, sales, etc., but are generally focused on training people in specific skills like baking, mechanics, food, and crafts. With EmprendeAhora, business plan development and aspects of running a business also form the meat of the program, but I repeatedly heard that the modules on leadership and citizenship set it apart from other types of entrepreneurship training programs.

Nearly every alum I met, whether they had their own business or not, was engaged in some sort of social project. Cases of volunteering, working with a non-governmental organization on social issues, or incorporating social projects into the line of business were very prevalent among alumni. EmprendeAhora alumni are not just contributing to the country’s economic development, but are motivated to play a role in the country’s social development as well.

These are just the highlights of the many lessons I learned while in Peru. In the coming weeks, the CIPE blog will feature detailed profiles of the students and businesses I met with, so keep checking back to read about some inspiring individuals.

(You can get a head start by checking out an article on 2008 alum Karolo Pérez Alvarado from Tarapoto.)

This article is the beginning of a series of interviews with participants of Instituto Invertir’s EmprendeAhora entrepreneurship and leadership training program in Peru. Read Part 1 and Part 2.

Property rights for indigenous communities

Indigenous people of Bagua (Photo: Ernesto Benavides/AFP)

Indigenous people in Latin America have often been in conflict with multinational companies – and their own governments – over various industrial development projects that threatened their environment and the way of life. As Hernando de Soto pointed out in his work with indigenous communities in Peruvian Amazon, the root source of such disagreements lies in the fact that property rights of those communities are not formally recognized, and therefore not legally protected. Not surprisingly, in confrontation over land use with large companies or governments hungry for natural resources they frequently lose.

That may finally be changing in Peru. A new law recognizing land ownership rights of the country’s native population is an important step in the right direction. On September 6, Peru’s President Ollanta Humala signed into law a measure that requires consultation with the indigenous people prior to undertaking any mining, timber or petroleum projects on their traditional lands.

The law sets a regional precedent in that matter and hopefully can prevent violent strife that in June 2009 gripped Bagua in the Peruvian Amazon, where more than 30 people were killed after months of protest over the sale of rainforest for oil and mining use. Quite fittingly, the new bill was signed in the town of Imacita in Bagua province.

Dismissing arguments that the law will discourage foreign investment, President Humala stated that the new law should in fact strengthen investment by reducing the risk of instability and social conflict that investors fear. The law for sure is not a cure-all and the indigenous people and the government may find themselves at odds again in cases where the consultative process doesn’t lead to a compromise. But at least it provides a formal channel for a democratic dialogue, making the indigenous communities stakeholders in the country’s development process.

Going forward, as Hernando de Soto suggests, the protection of the rights of indigenous people must go beyond case-by-case consultations on given project: “It is time for the indigenous peoples of the Amazon to consider the possibility of adopting property and business rights in order to exchange signals with each other and the outside world, to combine their resources productively and create diversity and wealth, thereby protecting themselves from the dangers of globalization and benefitting from its advantages.”

Peru: Youth Leading Growth and Democracy

Peru’s economy has been steadily growing over the last 5 years and things are getting better for more and more people. This is good news in particular for a country that had to overcome terrorism and severe economic hardship. However, while things are getting better, recent surveys show that young people, in particular in rural Peru, are not satisfied with democracy and the market economy. In response to this the Peruvian think tank Instituto Invertir launched LíderAcción, a leadership and entrepreneurship program for university students from rural Peru.


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