Week number: 7
Greetings from the other side. We hope you’re all fantastic. Majority of us have one paper left, but some others are done and dusted (isn’t that amazing?). Because of the rigorous nature of preparations towards the mid semester exams, we haven’t been able to meet as a unit and plan further towards our project. However, we know that during the mid-semester break, all outstanding plans will be finalized and we’ll move forward in our design process.
In class this week, we’ll be discussing a book called Poor Economics. It’s a book written by the wife/husband duo Esther Duflo and Abhijit Banerjee. They were both recipients of the Nobel Memorial Prize in Economic Sciences, an amazing feat. Our lecturers, Heather and Rose, assigned our group to Chapter 9 of the book, affectionately titled Reluctant Entrepreneurs. The chapter is organized into several sections that we’ll (try to) summarize below.
Reluctant Entrepreneurs
The first, and perhaps most striking, aspect you notice from the chapter is the fact that true entrepreneurship entails using your cleverness to create something out of nothing. Upon reading this chapter, we understood that not every entrepreneur comes from a wealthy or privileged society. Due to the “hustler” nature of most rural communities, the people who live there have learned to slug it out and make the most of their circumstances.
Another observation made in the book is that sometimes, even with a solution that seems as though it is the best option for a community, the members of that community are fine just the way they are. One way we understood this is that the members of the community were doing just fine before we arrived, and they’ll continue to do just fine after we leave. That’s not to say that we should not be interested in making their situation better. It just means that we should be willing to ideate several times until we reach a solution that they are interested in, not just one that we think is important for them. One major lesson we’ve taken from this aspect of the chapter is that it’s very important to keep going out to the field and understand the solution through the eyes of those who are actually trying it out.
We leave you with a summary of observations made in this section. First, it is likely that the poor are quite likely to find opportunities since they are rarely listened to and their ideas might be fresher. Next, everyone has a shot at being a successful entrepreneur.
Capitalists Without Capital
How do people take advantage of unusual opportunities to make a fortune? Let’s explore some case studies below.
- Andhra Pradesh: She started off as a “lowly” trash collector and ended up at the helm of a large network of trash collectors, due in part to a loan she took.
- Xu Aihua: She went to a fashion design school and came back to her village to teach local girls how to sew. By 1991, she had saved $27, 600 to buy sixty automatic sewing machines. By 2008, she made a real-estate investment of $4.4 million.
A key indicator of the entrepreneurial spirit among the poor is that even though they are more likely to be severely affected by adverse risks, they’re still willing to go ahead just to try and make something of themselves. Somehow, even after paying crippling interest rates, they still manage to make enough money to repay their loans. This feat in itself is impressive.
Final thoughts from the section: Given the right kind of help, even those who are hit by extreme hardship are capable of turning their lives around.
ToRoCa 