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The world has made great progress in reducing poverty, but with an increasing number of people moving to cities, more help is needed to solve health, education and crime problems. It’s here that entrepreneurs can help.
Whether they be from poor communities themselves, or from well-off suburbs, entrepreneurs should be urged to get stuck in with finding solutions.
With the increased focus on social entrepreneurship, programmes and interventions abound. Increasingly better access to the internet in poorer areas has also levelled the playing fields (it’s how a 24-year-old in an Indian slum is able to make US$1 600 a month selling leather goods on eBay).
This follows the latest run last month of Startup Weekend Change Makers. The 54-hour event, started by entrepreneurship organisation UP Global, aims to get entrepreneurs to focus on developing solutions to social problems. Meetings took place in cities in Germany, Costa Rica, Guatemala, China, Japan and Brazil.
The winner last year of Startup Weekend Rio Favela for the health platform category was a 71-year-old Luiz Augusto, who created a mobile app that provides diagnostic services on preventative diseases for low-income residents.
Last month Facebook launched a business training for residents in Heliopolis, a São Paulo slum. The training is centred on how to use a Facebook page for ones business.
Far from being a lost cause, slums are booming. The 12.3 million Brazilians that live in slums (or favelas as they are known there) account for a market of US$22-billion, according to a survey by Data Favela released in February.
The survey reveals that four in every 10 favela residents dream of starting their own business – above the national average of 23% of residents. Most want to start a business because they see an opportunity, rather than out of necessity.
An increase in income and the real increase in the minimum salary means many inhabitants in favelas can now buy goods which previously were considered unobtainable, such as plasma television (two thirds of homes in favelas now have them) and cars (one quarter).
In South Africa over 3 million people live in informal settlements (tin shacks) and a further 15 million in townships (poor areas in which black people were forced to live during apartheid), reveals a World Bank report published last year.
The poor can benefit from innovative solutions like a fire detector (Lumkani) developed by university students which was launched last year. Its founders have already received seed funding and won a number of competitions.
Along with seed funding, training programmes, such as the Raymond Ackerman Academy which recruits youth who are then coached to look at how to solve problems in their communities, can also help. Sizwe Nzima is a recent successful graduate (see this earlier post).
Bring in private sector
The Gauteng government has pledged millions through a township revitalisation programme, while the Small Business Development department is rolling out an informal support strategy (see this earlier post).
The private sector — universities, seed funds and big business — should also get stuck in. They can help by encouraging entrepreneurs both inside and outside poorer areas to foster more innovative solutions (and get them to work together) to solve the many problems that townships face.
Of course, the government should not neglect to provide better internet to townships, as this will also help lay the groundwork necessary to encourage more innovation.
Next week entrepreneurs and experts are expected to debate interventions, technologies, products and services that are geared to uplift and service township enterprises at a three-day summit held in Soweto and sponsored by Microsoft. More of such events are badly needed.