Doing Business - How Africa Encourages the Informal Economy
Doing Business – How Africa Encourages the Informal Economy: by Ndubuisi Ekekwe
Africa's Economy is Dominated by the Informal Sector
It takes less than ten minutes to approve certain documents towards starting a new business in New Zealand. At most, it takes a day to get a business approved to open its doors to customers. And all the procedures are combined into a single step. That is why the World Bank ranked it #2 in its Doing Business 2010 report. This pattern of quick new business approval is similar in most developed nations where it could take from a day to a week. In the United States, it takes about a week to launch a new business.
But move to Africa. It takes 136 days to get approval to start a new business in Equatorial Guinea. Why? Because the country’s Prime Minister must approve all new businesses. Yes, a Prime Minister must approve a small business to be operated by a college student in that country. By moving this approval to the office of the Prime Minister, the nation creates about 20 procedures compared to 1 in New Zealand.
Yet, Equatorial Guinea does better than another country, Guinea-Bissau. Guinea-Bissau needs 213 days to approve a new business. The fees and legal costs are a factor of 807 more when compared to New Zealand. So if an entrepreneur in New Zealand pays $1 to launch a new business, the counterpart in Guinea-Bissau will pay $807, in relative terms.
The whole outlooks show that only the rich can afford to create new businesses in most parts of the black race. In Haiti, it takes more than three years to get a building permit with many layers of bureaucracy.
From personal experiences, the World Bank numbers are reliable. I have created firms in two countries. In the United States, it took less than a week and all was done via the web. In Nigeria, it took weeks with endless and needless documentations. We spent the first few weeks to search for business name and that could only be validated in Abuja, the nation’s capital. The problem was that the regional offices were not equipped to check for these names. Documents were sent to the approving commission headquarters where business names are approved before the regional offices could complete the paper works. Nigeria is ranked #125 out of 183 countries in the World Bank’s Doing Business 2010.
From Cameroon to Botswana, the experience is basically the same. The high barrier to incorporation makes it tougher for most business owners to operate and join the formal economy. The reality is that unless Africa finds ways to improve its business registration climate, most entrepreneurs will continue to operate in the informal sector thereby depriving the state much needed taxes and fees.
I used some of the numbers provided by World Bank to see the relationship between the Doing Business ranking and the percentage of the GDP in the informal economy. There were no surprises- a correlation exists; as the incorporation barrier increases, the percentage of GDP in the informal economy also increases. So, Guinea-Bissau has more of its GDP controlled in the informal sector than New Zealand.
There are many reasons why this trend happens in Africa where we have disproportionate informal economies dominating our GDPs. One is that most business owners in Africa are not educated and their businesses rarely need government approvals to thrive. The women that sell oranges and carrots on the highways may not bother to register with the governments as there seem to be no major benefits that corporations could give their businesses. The same applies to most African subsistence farmers.
Another reason is the cost and time needed to incorporate. When most entrepreneurs consider these factors, they decide to go under and operate in the shadow economy.
Nonetheless, most of these business owners will be most willing to incorporate if the process is efficient and affordable. From Nigeria to Cameroon, Africa must work very hard to modernize most of its business environments so that people could be attracted to launch businesses legally. If they leave the system as it is, governments are basically encouraging their entrepreneurs to shun the formal sector. Certainly, it will not be the best model for development.
Mostrando entradas con la etiqueta Africa. Mostrar todas las entradas
Mostrando entradas con la etiqueta Africa. Mostrar todas las entradas
sábado, 11 de septiembre de 2010
Africa's Informal Economy Revealed | Fast Company
Africa's Informal Economy Revealed | Fast Company
Steve Daniels, the founder of A Better World By Design and co-creator of Maker Faire Rhode Island, just published a book, Making Do, based on his research on informal economies in Africa. The shocker? He just graduated from college this year and is 21 years old. Here's how one youngin' is making inroads in the humanitarian design field.
How did you become interested in innovation in Africa's informal sector?
Like many young designers, I’ve been passionate about technology to promote sustainable development. For a while I studied appropriate technology, a field that since the 1970s has sought to deliver life-saving and income-generating tools to communities throughout the developing world. However, countless accounts have shown that most projects don’t sustain themselves and don’t scale. That’s partly because those who design the technologies are so far removed from those who make, own, and use them. I took a trip to Kenya and Ghana to investigate how we might bridge this gap and quickly realized that Africa has a huge pool of untapped talent--the technologists of the informal economy. The informal economy comprises unregulated and unprotected, but legitimate microenterprises--more than 90 percent of non-agricultural employment in Kenya. Informal craftsmen, known as jua kali in Kenya, make their livelihoods by manufacturing products in the resource-constrained environment Westerners struggle so hard to adapt to. Their businesses thrive due to the complex networks among traders and producers. The indigenous talent of the jua kali will be essential to developing truly appropriate technologies and their networks the key to sustaining and scaling them. Making Do breaks down the skills and networks of the jua kali in order to understand the role craftsmen and collaborators like us might play in a unique form of industrialization for Africa.
Tell me about Maker Faire and why you decided to launch your book there. The event started in Africa and now you're bringing it to Rhode Island?
The Maker Faire is a celebration of do-it-yourself culture. Founded by Make Magazine, the Faires are attended by inventors, hobbyists, and artists passionate about their craft and promote an open culture around technology that empowers individuals. The first event in California might have seemed like giant sprawling science fair, but as the event moved to new locations it took on new meanings. In Africa the event connects artisans in an attempt to move the continent into a grassroots industrial era. In Rhode Island the Maker Faire heralds the transition from a postindustrial slump to a bustling creative economy. Because of the transnational ties being formed among global makers, the same principles are being contextualized to different societies, each at its own stage in the development process. The Maker Faire Rhode Island is run by an organization I helped found called Revolution x Design, and in an attempt to generate more cross-cultural dialogue I’ll be launching Making Do jointly at the Maker Faire Rhode Island in Providence and Maker Faire Africa in Nairobi—both set for the weekend of August 28.
Humanitarian design and bottom of the pyramid design are buzz topics right now. What new light does Making Do shed on such topics?
It’s really exciting that engineers and designers are applying their talents to the social realm, but this can’t be done blindly. Here at Fast Company, Bruce Nussbaum recently called humanitarian design “the new imperialism” because Western technologists are putting themselves in a position to shape the development of communities around the world. NGO workers have been struggling with the challenges of community empowerment for half a century, and designers must understand that their product won’t create meaningful social change unless all of the stakeholders are included in the development process. Western designers know well the value of user input, but the manufacturers of the product are equally valuable. Making a product for the African market isn’t as easy as shipping off CAD files to China; the makers of the product must be included in the design process from the start. Only the jua kali know how to make a product in a way that leverages local resources and networks, and including them in the process means that the product will be produced and distributed in a sustainable and scalable way. Critical cross-cultural discussions are still needed to determine the best strategies for implementation of technologies, and fora like the Better World by Design conference at Brown and RISD encourage this dialogue. As impactful as a single product can be--as demonstrated by various water pumps and cook stoves--the most powerful social change will come from continuous technological learning by indigenous innovators. By transferring skills and resources instead of hard technology, we can empower them to solve the most pressing problems faced by their local market. This is where movements like the Maker Faire come into play.
What would happen if Silicon Valley entrepreneurs and the jua kali swapped places for a week? What would the two different groups of entrepreneurs find similar and different in each other's shoes?
Innovation in the informal business clusters of Africa and advanced clusters like the Silicon Valley look quite different, but both have lessons to teach each other. The kind of innovation we see in the informal economy, sometimes referred to as bootstrapping or bricolage, is incredibly resourceful and creative. The jua kali can truly make treasure out of trash, leaving no waste behind. The jua kali clusters usually comprise businesses of one to five employees, which might seem inefficient in comparison to Western integration, but their transactions are embedded in social relations. Transaction costs are significantly reduced by practices like resource sharing, loans, and apprenticeships, all of which occur among connected entrepreneurs. If the jua kali ran Silicon Valley, the cluster would be composed of much smaller, yet more flexible and cooperative, businesses that mimic the creative enterprises in attendance at Western Maker Faires. Despite its strengths, bootstrapping is an inherently survivalist strategy. Most jua kali do what it takes to get by, but don’t seek out high-growth strategies. That’s where a Silicon Valley culture can be really empowering. Jua kali can’t always afford to invest in new technologies or markets, and most are not accustomed to this practice. If Silicon Valley entrepreneurs took over clusters like Gikomba or Kamukunji in Nairobi, we’d see more consolidation of businesses, quality control, and product innovation—perhaps geared more towards capital-intensive export markets. However, these values don’t always translate well to the informal economy, where low-cost operations and deep relationships with customers make jua kali wares domestically accessible.
Lastly, since you're still quite young, what's ahead for you on this path of social design work?
In addition to mechanical technologies, I’ve always been interested in digital interface design and ICT, which if developed and implemented appropriately can remove barriers in the developing world caused by inadequate physical infrastructure. Imagine how trade would change in the informal economy if everyone had access to Craigslist or how community health might improve if diagnosis could be done via mobile phone rather than at the clinic miles away. That’s why I’ve joined the Social Computing Group at IBM Research, which studies how ICT mediates social interactions. We’re currently developing infrastructure and applications to tackle opportunities like trade and health by facilitating social interactions and crowdsourcing in the African market so people can collectively solve their own problems. IBM has contributed some amazing work to the field of ICT for development, such as the Spoken Web and I’m excited to see what comes out of our research.
Steve Daniels, the founder of A Better World By Design and co-creator of Maker Faire Rhode Island, just published a book, Making Do, based on his research on informal economies in Africa. The shocker? He just graduated from college this year and is 21 years old. Here's how one youngin' is making inroads in the humanitarian design field.
How did you become interested in innovation in Africa's informal sector?
Like many young designers, I’ve been passionate about technology to promote sustainable development. For a while I studied appropriate technology, a field that since the 1970s has sought to deliver life-saving and income-generating tools to communities throughout the developing world. However, countless accounts have shown that most projects don’t sustain themselves and don’t scale. That’s partly because those who design the technologies are so far removed from those who make, own, and use them. I took a trip to Kenya and Ghana to investigate how we might bridge this gap and quickly realized that Africa has a huge pool of untapped talent--the technologists of the informal economy. The informal economy comprises unregulated and unprotected, but legitimate microenterprises--more than 90 percent of non-agricultural employment in Kenya. Informal craftsmen, known as jua kali in Kenya, make their livelihoods by manufacturing products in the resource-constrained environment Westerners struggle so hard to adapt to. Their businesses thrive due to the complex networks among traders and producers. The indigenous talent of the jua kali will be essential to developing truly appropriate technologies and their networks the key to sustaining and scaling them. Making Do breaks down the skills and networks of the jua kali in order to understand the role craftsmen and collaborators like us might play in a unique form of industrialization for Africa.
Tell me about Maker Faire and why you decided to launch your book there. The event started in Africa and now you're bringing it to Rhode Island?
The Maker Faire is a celebration of do-it-yourself culture. Founded by Make Magazine, the Faires are attended by inventors, hobbyists, and artists passionate about their craft and promote an open culture around technology that empowers individuals. The first event in California might have seemed like giant sprawling science fair, but as the event moved to new locations it took on new meanings. In Africa the event connects artisans in an attempt to move the continent into a grassroots industrial era. In Rhode Island the Maker Faire heralds the transition from a postindustrial slump to a bustling creative economy. Because of the transnational ties being formed among global makers, the same principles are being contextualized to different societies, each at its own stage in the development process. The Maker Faire Rhode Island is run by an organization I helped found called Revolution x Design, and in an attempt to generate more cross-cultural dialogue I’ll be launching Making Do jointly at the Maker Faire Rhode Island in Providence and Maker Faire Africa in Nairobi—both set for the weekend of August 28.
Humanitarian design and bottom of the pyramid design are buzz topics right now. What new light does Making Do shed on such topics?
It’s really exciting that engineers and designers are applying their talents to the social realm, but this can’t be done blindly. Here at Fast Company, Bruce Nussbaum recently called humanitarian design “the new imperialism” because Western technologists are putting themselves in a position to shape the development of communities around the world. NGO workers have been struggling with the challenges of community empowerment for half a century, and designers must understand that their product won’t create meaningful social change unless all of the stakeholders are included in the development process. Western designers know well the value of user input, but the manufacturers of the product are equally valuable. Making a product for the African market isn’t as easy as shipping off CAD files to China; the makers of the product must be included in the design process from the start. Only the jua kali know how to make a product in a way that leverages local resources and networks, and including them in the process means that the product will be produced and distributed in a sustainable and scalable way. Critical cross-cultural discussions are still needed to determine the best strategies for implementation of technologies, and fora like the Better World by Design conference at Brown and RISD encourage this dialogue. As impactful as a single product can be--as demonstrated by various water pumps and cook stoves--the most powerful social change will come from continuous technological learning by indigenous innovators. By transferring skills and resources instead of hard technology, we can empower them to solve the most pressing problems faced by their local market. This is where movements like the Maker Faire come into play.
What would happen if Silicon Valley entrepreneurs and the jua kali swapped places for a week? What would the two different groups of entrepreneurs find similar and different in each other's shoes?
Innovation in the informal business clusters of Africa and advanced clusters like the Silicon Valley look quite different, but both have lessons to teach each other. The kind of innovation we see in the informal economy, sometimes referred to as bootstrapping or bricolage, is incredibly resourceful and creative. The jua kali can truly make treasure out of trash, leaving no waste behind. The jua kali clusters usually comprise businesses of one to five employees, which might seem inefficient in comparison to Western integration, but their transactions are embedded in social relations. Transaction costs are significantly reduced by practices like resource sharing, loans, and apprenticeships, all of which occur among connected entrepreneurs. If the jua kali ran Silicon Valley, the cluster would be composed of much smaller, yet more flexible and cooperative, businesses that mimic the creative enterprises in attendance at Western Maker Faires. Despite its strengths, bootstrapping is an inherently survivalist strategy. Most jua kali do what it takes to get by, but don’t seek out high-growth strategies. That’s where a Silicon Valley culture can be really empowering. Jua kali can’t always afford to invest in new technologies or markets, and most are not accustomed to this practice. If Silicon Valley entrepreneurs took over clusters like Gikomba or Kamukunji in Nairobi, we’d see more consolidation of businesses, quality control, and product innovation—perhaps geared more towards capital-intensive export markets. However, these values don’t always translate well to the informal economy, where low-cost operations and deep relationships with customers make jua kali wares domestically accessible.
Lastly, since you're still quite young, what's ahead for you on this path of social design work?
In addition to mechanical technologies, I’ve always been interested in digital interface design and ICT, which if developed and implemented appropriately can remove barriers in the developing world caused by inadequate physical infrastructure. Imagine how trade would change in the informal economy if everyone had access to Craigslist or how community health might improve if diagnosis could be done via mobile phone rather than at the clinic miles away. That’s why I’ve joined the Social Computing Group at IBM Research, which studies how ICT mediates social interactions. We’re currently developing infrastructure and applications to tackle opportunities like trade and health by facilitating social interactions and crowdsourcing in the African market so people can collectively solve their own problems. IBM has contributed some amazing work to the field of ICT for development, such as the Spoken Web and I’m excited to see what comes out of our research.
miércoles, 25 de agosto de 2010
Governance Focus: Africa's Informal Economy Revealed
Governance Focus: Africa's Informal Economy Revealed
Steve Daniels, the founder of A Better World By Design and co-creator of Maker Faire Rhode Island, just published a book, Making Do, based on his research on informal economies in Africa. The shocker? He just graduated from college this year and is 21 years old. Here's how one youngin' is making inroads in the humanitarian design field.
How did you become interested in innovation in Africa's informal sector?
Like many young designers, I’ve been passionate about technology to promote sustainable development. For a while I studied appropriate technology, a field that since the 1970s has sought to deliver life-saving and income-generating tools to communities throughout the developing world. However, countless accounts have shown that most projects don’t sustain themselves and don’t scale. That’s partly because those who design the technologies are so far removed from those who make, own, and use them. I took a trip to Kenya and Ghana to investigate how we might bridge this gap and quickly realized that Africa has a huge pool of untapped talent--the technologists of the informal economy. The informal economy comprises unregulated and unprotected, but legitimate microenterprises--more than 90 percent of non-agricultural employment in Kenya. Informal craftsmen, known as jua kali in Kenya, make their livelihoods by manufacturing products in the resource-constrained environment Westerners struggle so hard to adapt to. Their businesses thrive due to the complex networks among traders and producers. The indigenous talent of the jua kali will be essential to developing truly appropriate technologies and their networks the key to sustaining and scaling them. Making Do breaks down the skills and networks of the jua kali in order to understand the role craftsmen and collaborators like us might play in a unique form of industrialization for Africa.
Tell me about Maker Faire and why you decided to launch your book there. The event started in Africa and now you're bringing it to Rhode Island?
The Maker Faire is a celebration of do-it-yourself culture. Founded by Make Magazine, the Faires are attended by inventors, hobbyists, and artists passionate about their craft and promote an open culture around technology that empowers individuals. The first event in California might have seemed like giant sprawling science fair, but as the event moved to new locations it took on new meanings. In Africa the event connects artisans in an attempt to move the continent into a grassroots industrial era. In Rhode Island the Maker Faire heralds the transition from a postindustrial slump to a bustling creative economy. Because of the transnational ties being formed among global makers, the same principles are being contextualized to different societies, each at its own stage in the development process. The Maker Faire Rhode Island is run by an organization I helped found called Revolution x Design, and in an attempt to generate more cross-cultural dialogue I’ll be launching Making Do jointly at the Maker Faire Rhode Island in Providence and Maker Faire Africa in Nairobi—both set for the weekend of August 28.
Humanitarian design and bottom of the pyramid design are buzz topics right now. What new light does Making Do shed on such topics?
It’s really exciting that engineers and designers are applying their talents to the social realm, but this can’t be done blindly. Here at Fast Company, Bruce Nussbaum recently called humanitarian design “the new imperialism” because Western technologists are putting themselves in a position to shape the development of communities around the world. NGO workers have been struggling with the challenges of community empowerment for half a century, and designers must understand that their product won’t create meaningful social change unless all of the stakeholders are included in the development process. Western designers know well the value of user input, but the manufacturers of the product are equally valuable. Making a product for the African market isn’t as easy as shipping off CAD files to China; the makers of the product must be included in the design process from the start. Only the jua kali know how to make a product in a way that leverages local resources and networks, and including them in the process means that the product will be produced and distributed in a sustainable and scalable way. Critical cross-cultural discussions are still needed to determine the best strategies for implementation of technologies, and fora like the Better World by Design conference at Brown and RISD encourage this dialogue. As impactful as a single product can be--as demonstrated by various water pumps and cook stoves--the most powerful social change will come from continuous technological learning by indigenous innovators. By transferring skills and resources instead of hard technology, we can empower them to solve the most pressing problems faced by their local market. This is where movements like the Maker Faire come into play.
What would happen if Silicon Valley entrepreneurs and the jua kali swapped places for a week? What would the two different groups of entrepreneurs find similar and different in each other's shoes?
Innovation in the informal business clusters of Africa and advanced clusters like the Silicon Valley look quite different, but both have lessons to teach each other. The kind of innovation we see in the informal economy, sometimes referred to as bootstrapping or bricolage, is incredibly resourceful and creative. The jua kali can truly make treasure out of trash, leaving no waste behind. The jua kali clusters usually comprise businesses of one to five employees, which might seem inefficient in comparison to Western integration, but their transactions are embedded in social relations. Transaction costs are significantly reduced by practices like resource sharing, loans, and apprenticeships, all of which occur among connected entrepreneurs. If the jua kali ran Silicon Valley, the cluster would be composed of much smaller, yet more flexible and cooperative, businesses that mimic the creative enterprises in attendance at Western Maker Faires. Despite its strengths, bootstrapping is an inherently survivalist strategy. Most jua kali do what it takes to get by, but don’t seek out high-growth strategies. That’s where a Silicon Valley culture can be really empowering. Jua kali can’t always afford to invest in new technologies or markets, and most are not accustomed to this practice. If Silicon Valley entrepreneurs took over clusters like Gikomba or Kamukunji in Nairobi, we’d see more consolidation of businesses, quality control, and product innovation—perhaps geared more towards capital-intensive export markets. However, these values don’t always translate well to the informal economy, where low-cost operations and deep relationships with customers make jua kali wares domestically accessible.
Lastly, since you're still quite young, what's ahead for you on this path of social design work?
In addition to mechanical technologies, I’ve always been interested in digital interface design and ICT, which if developed and implemented appropriately can remove barriers in the developing world caused by inadequate physical infrastructure. Imagine how trade would change in the informal economy if everyone had access to Craigslist or how community health might improve if diagnosis could be done via mobile phone rather than at the clinic miles away. That’s why I’ve joined the Social Computing Group at IBM Research, which studies how ICT mediates social interactions. We’re currently developing infrastructure and applications to tackle opportunities like trade and health by facilitating social interactions and crowdsourcing in the African market so people can collectively solve their own problems. IBM has contributed some amazing work to the field of ICT for development, such as the Spoken Web and I’m excited to see what comes out of our research.
Steve Daniels, the founder of A Better World By Design and co-creator of Maker Faire Rhode Island, just published a book, Making Do, based on his research on informal economies in Africa. The shocker? He just graduated from college this year and is 21 years old. Here's how one youngin' is making inroads in the humanitarian design field.
How did you become interested in innovation in Africa's informal sector?
Like many young designers, I’ve been passionate about technology to promote sustainable development. For a while I studied appropriate technology, a field that since the 1970s has sought to deliver life-saving and income-generating tools to communities throughout the developing world. However, countless accounts have shown that most projects don’t sustain themselves and don’t scale. That’s partly because those who design the technologies are so far removed from those who make, own, and use them. I took a trip to Kenya and Ghana to investigate how we might bridge this gap and quickly realized that Africa has a huge pool of untapped talent--the technologists of the informal economy. The informal economy comprises unregulated and unprotected, but legitimate microenterprises--more than 90 percent of non-agricultural employment in Kenya. Informal craftsmen, known as jua kali in Kenya, make their livelihoods by manufacturing products in the resource-constrained environment Westerners struggle so hard to adapt to. Their businesses thrive due to the complex networks among traders and producers. The indigenous talent of the jua kali will be essential to developing truly appropriate technologies and their networks the key to sustaining and scaling them. Making Do breaks down the skills and networks of the jua kali in order to understand the role craftsmen and collaborators like us might play in a unique form of industrialization for Africa.
Tell me about Maker Faire and why you decided to launch your book there. The event started in Africa and now you're bringing it to Rhode Island?
The Maker Faire is a celebration of do-it-yourself culture. Founded by Make Magazine, the Faires are attended by inventors, hobbyists, and artists passionate about their craft and promote an open culture around technology that empowers individuals. The first event in California might have seemed like giant sprawling science fair, but as the event moved to new locations it took on new meanings. In Africa the event connects artisans in an attempt to move the continent into a grassroots industrial era. In Rhode Island the Maker Faire heralds the transition from a postindustrial slump to a bustling creative economy. Because of the transnational ties being formed among global makers, the same principles are being contextualized to different societies, each at its own stage in the development process. The Maker Faire Rhode Island is run by an organization I helped found called Revolution x Design, and in an attempt to generate more cross-cultural dialogue I’ll be launching Making Do jointly at the Maker Faire Rhode Island in Providence and Maker Faire Africa in Nairobi—both set for the weekend of August 28.
Humanitarian design and bottom of the pyramid design are buzz topics right now. What new light does Making Do shed on such topics?
It’s really exciting that engineers and designers are applying their talents to the social realm, but this can’t be done blindly. Here at Fast Company, Bruce Nussbaum recently called humanitarian design “the new imperialism” because Western technologists are putting themselves in a position to shape the development of communities around the world. NGO workers have been struggling with the challenges of community empowerment for half a century, and designers must understand that their product won’t create meaningful social change unless all of the stakeholders are included in the development process. Western designers know well the value of user input, but the manufacturers of the product are equally valuable. Making a product for the African market isn’t as easy as shipping off CAD files to China; the makers of the product must be included in the design process from the start. Only the jua kali know how to make a product in a way that leverages local resources and networks, and including them in the process means that the product will be produced and distributed in a sustainable and scalable way. Critical cross-cultural discussions are still needed to determine the best strategies for implementation of technologies, and fora like the Better World by Design conference at Brown and RISD encourage this dialogue. As impactful as a single product can be--as demonstrated by various water pumps and cook stoves--the most powerful social change will come from continuous technological learning by indigenous innovators. By transferring skills and resources instead of hard technology, we can empower them to solve the most pressing problems faced by their local market. This is where movements like the Maker Faire come into play.
What would happen if Silicon Valley entrepreneurs and the jua kali swapped places for a week? What would the two different groups of entrepreneurs find similar and different in each other's shoes?
Innovation in the informal business clusters of Africa and advanced clusters like the Silicon Valley look quite different, but both have lessons to teach each other. The kind of innovation we see in the informal economy, sometimes referred to as bootstrapping or bricolage, is incredibly resourceful and creative. The jua kali can truly make treasure out of trash, leaving no waste behind. The jua kali clusters usually comprise businesses of one to five employees, which might seem inefficient in comparison to Western integration, but their transactions are embedded in social relations. Transaction costs are significantly reduced by practices like resource sharing, loans, and apprenticeships, all of which occur among connected entrepreneurs. If the jua kali ran Silicon Valley, the cluster would be composed of much smaller, yet more flexible and cooperative, businesses that mimic the creative enterprises in attendance at Western Maker Faires. Despite its strengths, bootstrapping is an inherently survivalist strategy. Most jua kali do what it takes to get by, but don’t seek out high-growth strategies. That’s where a Silicon Valley culture can be really empowering. Jua kali can’t always afford to invest in new technologies or markets, and most are not accustomed to this practice. If Silicon Valley entrepreneurs took over clusters like Gikomba or Kamukunji in Nairobi, we’d see more consolidation of businesses, quality control, and product innovation—perhaps geared more towards capital-intensive export markets. However, these values don’t always translate well to the informal economy, where low-cost operations and deep relationships with customers make jua kali wares domestically accessible.
Lastly, since you're still quite young, what's ahead for you on this path of social design work?
In addition to mechanical technologies, I’ve always been interested in digital interface design and ICT, which if developed and implemented appropriately can remove barriers in the developing world caused by inadequate physical infrastructure. Imagine how trade would change in the informal economy if everyone had access to Craigslist or how community health might improve if diagnosis could be done via mobile phone rather than at the clinic miles away. That’s why I’ve joined the Social Computing Group at IBM Research, which studies how ICT mediates social interactions. We’re currently developing infrastructure and applications to tackle opportunities like trade and health by facilitating social interactions and crowdsourcing in the African market so people can collectively solve their own problems. IBM has contributed some amazing work to the field of ICT for development, such as the Spoken Web and I’m excited to see what comes out of our research.
domingo, 20 de junio de 2010
Los afiliadas
Los afiliadas
Los afiliadas de StreetNet International
- Asociación de Khatang Tema Baitsukuli, Lesoto
- ASSOTSI (Associação dos Operadores e Trabalhadores do Sector Informal, Mozambique)
- ASSOVACO (Association de Vendeurs Ambulantes au Congo)
- AZEA (Alliance of Zambian Informal Economy Associations)
- CNTG (Confederatión Nationale des Travailleurs de Ginee)
- CNTS (Confederatión National de Travailleurs de Senegal)
- CTCP (Confederación de trabajadores por Cuenta Propia), Nicaragua
- Eastern Cape Street Vendors’ Alliance, South Africa
- FEDEVAL (Federación Departamental de Vendedores Ambulantes de Lima)
- FENASEIN (Federation Nationale des Syndicats), Niger
- FOSSIEH (Federación des Organazaciones y Trabajadores del sector Social e Informal de la Economía Informales de la Economía de Honduras)
- FNOTNA (La Federación Nacional de Organizaciones de Trabajadores No Asalariados) (CROC), Mexico
- Ghana StreetNet Alliance
- FNOTNA (La Federación Nacional de Organizaciones de Trabajadores No Asalariados) (CROC), Mexico
- Ghana StreetNet Alliance
- FUTJOPOCIF (Federación, Unión de Trabajadores, Juntas de Vecinos, Organizaciones Populares, y e; Comercio Informal y Afines, Inc), República Dominicana
- FUTRAND (Federacion Unica de Trabajadores no Dependientes), Venezuela
- KENASVIT (Kenya National Alliance of Street Vendors and Informal Traders)
- KOSC (Confederación Nacional de Vendedores Ambulantes de Corea), Corea del Sur
- LDFC (Ligue pour les droits de la Femme Congolaise)
- MUFIS (Malawi Union for the Informal Economy)
- NAMSTA (Namibian Small Traders Association)
- NASVI (National Alliance of Street Vendors of India)
- NEST (Nepal Street Vendors’ Union)
- NUIEWO (National Union of Informal Economy Workers’ Organisations), Uganda
- SEU (Self-Employed Union), Bangladesh
- SEWA (Self-Employed Women’s Association), India
- SINTEIN (Sindicato dos Trabalhadores na Economia Informal de Sao Paulo), Brasil
- SIVARA (Sindicato de vendedores ambulantes), Argentina
- Street Vendor Project (Proyecto de vendedor callejero), New York, United States
- SUDEMS (Syndicat Unique et Democratique des Mareyeurs du Senegal)
- SYVEMACOT (Syndicat des Vendeurs de Matériaux de Construction du Togo)
- SYNAVAMAB (Syndicat National des Vendeurs et Vendeuses et Assimiles des Marchés du Benin)
- TUICO (Tanzanian Union of Industrial and Commercial Workers)
- UGSEIN (Union Générale de Syndicats de l’Economie Informelle du Niger)
- USYNVEPID-CSPIB (Union Syndicale des Vendeuses de Pieces Detacheés et Divers du Marché Dantokpa, Benin)
- ZCIEA (Zimbabwe Chamber of Informal Economy Associations) Associacao dos Operadores e Trabalhadores do Sector Informal
viernes, 11 de junio de 2010
¡Nada para nosotros sin nosotros! – Mozambique 2010 | Hablemos de Economía Informal - Confederación Sindical de las Américas
¡Nada para nosotros sin nosotros! – Mozambique 2010 | Hablemos de Economía Informal - Confederación Sindical de las Américas
El coordinador de la WCCA de StreetNet Sudáfrica, Paul Shambira , hizo un recuento de la implementación de la campaña en Sudáfrica. Explicó que se encuentra trabajando conjuntamente con Nkosinathi Jikeka sobre la campaña que fue concebida para colaborar con los municipios de las 9 ciudades anfitrionas para el establecimiento de mecanismos de diálogo social para los vendedores ambulantes y otros grupos de pobres urbanos, en el período previo al Mundial de Fútbol de la FIFA. Conforme a las disposiciones de la FIFA, las áreas en los estadios y sus alrededores, junto con los parques “oficiales” para los aficionados, han sido declarados zonas de exclusión, a donde no pueden entrar los comerciantes. Esto significa que muchos vendedores que esperaban beneficiarse también de los juegos de la FIFA, podrían encontrarse aún más marginados durante los juegos.
El coordinador de la WCCA de StreetNet Sudáfrica, Paul Shambira , hizo un recuento de la implementación de la campaña en Sudáfrica. Explicó que se encuentra trabajando conjuntamente con Nkosinathi Jikeka sobre la campaña que fue concebida para colaborar con los municipios de las 9 ciudades anfitrionas para el establecimiento de mecanismos de diálogo social para los vendedores ambulantes y otros grupos de pobres urbanos, en el período previo al Mundial de Fútbol de la FIFA. Conforme a las disposiciones de la FIFA, las áreas en los estadios y sus alrededores, junto con los parques “oficiales” para los aficionados, han sido declarados zonas de exclusión, a donde no pueden entrar los comerciantes. Esto significa que muchos vendedores que esperaban beneficiarse también de los juegos de la FIFA, podrían encontrarse aún más marginados durante los juegos.
Explicó la estrategia de la campaña, las diferentes iniciativas de organización en las ciudades anfitrionas y las alianzas que se han logrado formar. Se espera poder fundar una alianza nacional de vendedores ambulantes en Sudáfrica, en un futuro no muy lejano. Explicó además, que StreetNet ha llevado a cabo cuatro talleres contra la xenofobia, con éxito, con otro taller previsto para finales de mayo.
La campaña ha fortalecido la capacidad de organización de los vendedores ambulantes, y existe un considerable índice (80%) de participación de la mujer.
La reacción de los medios de comunicación ha incrementado y algunos municipios han hecho concesiones a los vendedores ambulantes que les permitirán comerciar durante los juegos.
Concluyó explicando que existen planes para conmemorar en las ciudades sede, el Día de África el 25 de mayo, lo cual será una oportunidad para vincular a los vendedores ambulantes en todo el continente.
jueves, 10 de junio de 2010
Is the Informal Economy the Best Hope for Africa?
Is the Informal Economy the Best Hope for Africa?
By Michael Madill
Poor neighborhoods might just be the best hope of poor African countries. The rich ones certainly aren’t up to the job. You can find wealthy people and big governments in every country on the continent, but they have done little to make their neediest people better off in the fifty years since many of them got their independence. There are arguments about how much of this problem is their fault or even their responsibility, but we can look back at half a century of attempts to mitigate poverty and suffering and see only modest, irregular gains.
Today two-fifths of a country’s income vanishes into corrupt practices and politicians’ pockets in places like Uganda. Official development assistance makes up more than half the government’s budget in Niger, the Central African Republic and Liberia just to name a few. Countries with relatively more exposure to the world economy like Nigeria and South Africa are struggling to close budget gaps like their poorer neighbors. And in places like the Democratic Republic of Congo and Guinea-Bissau it’s hard to distinguish government employees and soldiers from petty thugs and criminal warlords because they are often the same people.
Yet, hidden away behind the stories of misery and decline is a secret. Africa is thriving. Something like half its people are making money in ways that don’t get into official statistics about economic growth, and there is a flip side of the human development indicators about child mortality, AIDS, malaria and malnutrition. Those same sick or disadvantaged people are surviving with little help from governments or NGO’s. Many, in fact, are eking out a living in spite of government attempts to impoverish them, lock them up or chase them out of view of the rich folks and tourists.
If you add up the reported value of the goods and services produced in African countries last year, you get about one trillion dollars. Fifty-one countries and a trillion dollars. The United States economy is worth about fourteen trillion dollars all by itself. In Africa, though, the figures count only things which economists can measure – the formal economy – plus an estimate of things they think they missed. It’s that second number, the estimate of hard-to-measure activity called the informal economy, that hides Africa’s hope.
See, economists really have no idea how big the informal economy is, so the estimates which get into official reports of a country’s gross domestic product or GDP are the result of negotiation between governments, international banks, and United Nations agencies. So are the official figures, but there is less room for politics to distort them because everyone has to work with the same data. One thing most observers can agree on is that informal economic activity is probably equivalent to forty per cent of GDP. In Africa’s case this means we could be missing about four hundred billion dollars in economic activity. That’s like forgetting to count California, Texas, New York, Florida and Illinois when adding up the value of the US economy.
Now, there aren’t millions of people in Mali or Chad or Ethiopia hiding their Mercedes behind their thatch huts when the taxman comes to call, though that sort of evasion distorts GDP figures, too. The people churning out informal income are the guys by the side of the road making stoves and grills out of old truck parts in Dakar, the women selling maize or mangos from a stall near a bus stage on the road to Kumasi or the tailors’ co-op working in Kibera slum in Nairobi. These people will almost never get rich or even earn enough to move to a nicer section of town, but they make enough to feed and house their families, send their children to school and to keep other informal enterprises like vegetable markets and beer stalls going.
It’s not like the government doesn’t know they’re there. A man welding a cooking pot from the metal wheel of a disused pickup truck next to a busy intersection in the middle of the day is hard to miss. People like this are overlooked because they are either deliberately ignored or have managed to slip through the fingers of official counters. You might not be counted on purpose if you live in the constituency of a politician unfriendly to the government. Maybe you pay a ‘tax’ to a powerful local businessman for protection, which includes shielding your business from nosy inspectors. Or maybe it’s simply too far or considered to dirty or dangerous for census takers and tax inspectors to reach you. In all cases, the end result is the same. You get on with your life but the money you make doesn’t show up in official reports. When enough people doing enough business cluster together, they can keep up a fairly substantial level of economically valuable activity without anyone really noticing.
The trouble with working off the books like this is that when it comes time to distribute official resources for development, like digging a well or building a school or paving a road the government can overlook you and send things that might have helped you to someone else. It’s easy to get trapped in a sort of official limbo. You don’t get help you need because you’re not really there, but you perform a vital function in society and so must be tolerated and encouraged insofar as possible. The answer in most countries is for governments to ignore the informal economy altogether. Of course they admit it exists, but they plead a long list of difficulties when it comes time to count, tax, regulate or otherwise officially acknowledge it. It’s simply cheaper and easier to let it go and try to tap some of the benefits indirectly.
The reason this is the best hope for Africa is that informal economies everywhere survive and thrive against the odds. Paucity of capital, lack of education and in many cases the absence of basic services and utilities do not deter people from taking risks, even prevent them making a profit on small ventures at the bottom of the economic pyramid. Every country in Africa depends on its informal economy to supply the needs and fill the gaps of the official one.
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