Entrepreneurs won't save the world, but entrepreneurship will

23 Things

The entrepreneurial energy in a country like Kenya is overwhelming. You can illustrate it with stats: self-employment accounts for fully 66% of total employment in Kenya. You can illustrate it with stories: take one of the entrepreneurs we are working with at Balloon Kenya as an example. He tutors Masters students on research methods, and also writes business plans, manages three distinct tea plantations, grows wheat, and used to be in a dance group hired out for events. He’s 24 years old. It’s the dynamism of such inventive individuals that will create economic and social change, and pull Kenya forward.

Or maybe not.

The problem is that there is too much quail here in Kericho. A couple of years back there was a sudden boom and now, even in our small group of Balloon Kenya entrepreneurs, there are no less than five quail farmers. And these businesspeople are committed and enthusiastic, so much so that one individual wore a shirt imploring people to “Ask Me About Quail” to the bar we went to last Saturday. It’s a problem you see pretty much everywhere around Kericho town: as soon as something is shown to be profitable, people pile in, be it touting tea or shining shoes.

For Ha-Joon Chang, whose book ‘23 Things They Don’t Tell You About Capitalism’ I’ve been reading, this is the “fallacy of composition”: the fact that some people can succeed with a particular business does not mean that everyone can. Now this wouldn’t be a problem if there were constant innovation in the development of new business lines. Number of quail farmers triples? Some move in to farming quail for export, or selectively breeding the quail for a better product, and we are back to quail harmony. But unfortunately this isn’t possible most of the time; as Ha-Joon notes,

“...there is only a limited range of (simple) businesses that the poor in developing countries can take on, given their limited skills, the narrow range of technologies available, and the limited amount of finance that they can mobilize...”

An individual can’t be productive on her own; productivity is collective, coming from the entire socio-economic system you are operating in. Societal institutions, scientific infrastructure, company law, the education system, the financial system, patent and copyright laws: these things are what make it happen. Since the Second World War, there’s been huge growth in the world economy, but it’s not because of individual pioneers like Gates or Edison, says Ha-Joon, it’s the work of the collective.

I’ve always found the idea of the ‘heroic entrepreneur,’ who makes something out of nothing, to be grating, I think because I’ve felt jealous that it wasn’t me. The reason I should find it grating is that the idea of the heroic entrepreneur is a myth, distracting us from the real task of ‘building institutions and organizations of collective entrepreneurship’ which is the real way for countries to escape poverty. Entrepreneurship, but not just by entrepreneurs.

As in many spheres of life, you can't succeed in entrepreneurship on your own

One of the entrepreneurs we work with wants to retire a multi-millionaire (in Kenyan shillings that is) at 40, having created a large, innovative business employing tens of people. He’s an avid reader of business books with titles like ‘Think, and Grow Rich’. Unfortunately, without the right environment, thinking is unlikely to be enough.