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Empowering micro-entrepreneurs

Mobile learningEmpowering micro-entrepreneurs

by Eugene Viskovic

Which has more entrepreneurs: Silicon Valley or Bangalore?  San Francisco or Karachi? The answer is not as obvious as you might think.

Though we are flooded with stories of instant billionaires in Silicon Valley, the truth is that developing countries are home to a higher concentration of entrepreneurs than developed markets. In India, for example, 40% of the urban poor are self-employed to some degree, and in Bolivia, the population engages in entrepreneurial activity at three times the rate of Americans and five times the rate of those in the UK, according to recent London Business School research.

Often called ‘micro-entrepreneurs’ (defined as owners of [often-informal] businesses with five or fewer employees), small business owners in the developing world can include farmers, fishermen and independent food sellers. Their work is crucial in driving economic growth and furthering local jobs, education and development.

However, these entrepreneurs often face significant obstacles to growing their businesses, including a lack of business skills and limited access to relevant information.

In an effort to assess the impact of an effort called the Business Bridge Initiative to provide micro-entrepreneurs in South Africa with genuine business education, an evaluation by London Business School, the World Bank and the Jameel Poverty Action Lab of the Initiative’s training program in South Africa found significantly improved sales, profits, job creation, and business survivorship among recipients of its training after 18 months.  Participants in the Initiative’s marketing training registered a 69% increase in sales and an 86% increase in profits, and participants in its finance training produced a 39% increase in sales and a 75% increase in profits..

These results show the massive commercial impact micro-entrepreneurs have when they get access to real business education.  The reality is that the most likely vehicle for delivering that education will be mobile technologies and services, based on growing smartphone penetration and near-universal access to basic mobiles in even the poorest countries.

VimpelCom has had some success with empowerment initiatives delivered via mobile.  These include an SMS-based learning program teaching literacy skills to women in Pakistan and an interactive voice response service in Bangladesh called Krishi Bazaar, which provides real-time agricultural market data to small farmers around the country.

As the penetration of low-cost smartphones – the key enablers of mobile data access – increases, richer content will be available to a growing audience. For micro-entrepreneurs, this means that smartphones could be used to enable accessible business education at scale. Educational content, available via YouTube, mobile apps and podcasts, could transform the economic potential of ‘micro-entrepreneurs’, particularly once delivery obstacles such as literacy, online video quality, and data cost are addressed.

Consumers in emerging markets are increasingly ‘leapfrogging’ traditional infrastructure by adopting mobile banking, and so ‘micro-entrepreneurs’ could take a similar approach by exploiting smartphones and mobile connectivity to ‘leapfrog’ traditional learning channels and access richer education and business training resources.

Will mobile provide the decisive difference in making micro-entrepreneurship more sustainable and profitable?