Slum entrepreneurs create hope for the future

Slum entrepreneurs create hope for the future
Published: 
August 2013

If you think it’s hard running a business, spare a thought for those starting up in the tough slum areas of Colombia, where a new initiative by UQ Business School aims to show how enterprise can help rebuild communities.

The news that the world’s largest coffee chain is to open its first store in Colombia next year has highlighted the growing interest by corporates in this emerging Latin American country.

But while Starbucks is still planning for the launch, UQ Business School is already working with partners in Colombia – a country which is rebuilding its economy after years of armed conflict. Dr Lance Newey, Senior Lecturer in Entrepreneurship, believes that encouraging entrepreneurship offers real benefits for communities in countries like Colombia – though they may choose different business models to suit their particular needs.

Dr Newey says: “These are emerging economies that offer the exciting opportunity to use different types of entrepreneurship – traditional for-profit as well as social – to co-develop businesses and communities. It is a privilege to participate in the shaping of how these communities decide what is right for them.”

Dr Newey, together with Laura Hassett from the faculty’s international development team and four social entrepreneurship students, recently travelled to Colombia’s capital Bogota to lead workshops for 32 locals with little or no formal education. The team worked in partnership with Javeriana University in Bogota and local not-for-profit organisation Ahmsa, which provided them with safe access to slum areas.

The Colombians were shown how to develop their business ideas, which ranged from craft businesses and a bakery, to graphic design. The course culminated in them pitching their ideas to a Dragons’ Den-style panel, with winners receiving seed capital funding.

According to Dr Newey, it’s not just lack of education or business skills that holds back Colombians like these. “Sometimes these communities can lack the basic infrastructure that we take for granted. Historic social unrest has harmed the social trust that underlies the pervasive co-operation with strangers that defines more advanced economies.

“In advanced economies almost every product we use is made or delivered by strangers. In communities like these there is a fundamental lack of trust so they are unlikely to do business with people they don’t know. However to grow a business you have to develop networks outside the community. The building of social capital is part of our training.

“Another factor can be the lack of legal recourse, and access to legal systems that enforce contracts and property rights, which would give them greater confidence to do business with strangers.”

The project proved a life-changing experience for both the UQ team and the Colombians. “The winning team included hard men, scarred by very difficult life experiences,” says Dr Newey. “However they cried when they won as they were overwhelmed that expert judges had confirmed that they had achieved something great. They came to believe in themselves and that alternatives in their life are truly possible.”

As a result of the project, Javeriana University is adopting the Social Entrepreneurship course which Dr Newey runs at UQ Business School. Meanwhile the partners are hoping to extend the training course to other slum areas and monitor the outcomes in terms of the progress of the businesses and the impact on both individual and community well-being.

But can entrepreneurship skills really help communities prosper or just the individuals concerned? In the United States, many state governments are convinced of the benefits and have strategies in place to encourage entrepreneurship. Mike Brooks, who is president of the regional economic development body in the city of Columbia, typifies this approach.

He believes communities and companies rely on each other for growth: “The presence of entrepreneurs in communities helps bring prosperity and a progressive spirit to those locations; startups drive local economies, promote job growth, and help carve an identity for a city or town.”

Dr Newey says the UQ Business School program is designed to provide both economic and social value. “Providing skills training to people who have had little or no formal education gives them a wider set of options and also ignites the entrepreneurial capacity laying dormant in the community,” he says.

“We take a strategic approach to both business and community development which is important because locals want business development mixed with the preservation of core values which sees social value just as important as economic. They don’t want their economic progress to outpace their social development. Teaching social entrepreneurship offers whole new ways for people to identify opportunities to improve quality of life.

“If we are to change things in the longer term, it is particularly important to target the youth, who can lead Colombia to be a model of business and community co-development in Latin America. We saw examples of locals who turned their lives around and now are working with us as role models of the power of education to transform lives and societies.”