This post was written by IPD Research Affiliate Sebastian DeBeurs. Sebastian is a third year student in Plan II Honors and Government. His interests lie in developmental policy, political psychology, and poverty alleviation - especially in sub-Saharan Africa and Southeast Asia. This past summer, Sebastian was a foreign service intern at the US Department of State in the Bureau for African Affairs.
Through the Bill Archer Fellowship, I have had the opportunity to work in Washington D.C. as an intern at the Aspen Network for Development Entrepreneurs (ANDE).
ANDE is a solid network of development organizations, corporates, banks, universities, and other organizations that support entrepreneurship and small and growing businesses (SGBs) in developing nations. SGBs are formal firms that employ between 5 and 250 employees with a strong potential for growth (ANDE, 2010). SGBs play a critical role in entrepreneurship-driven international development, generating sustainable employment as small businesses and local economies grow. The wealth generated by small and growing businesses often stays within the community, spurring the growth of other businesses and cultivating a self-sustaining private sector over the long run.
Entrepreneurship in developing nations is especially important to closing the gender gap. In Sub-Saharan Africa, 26% of women aged 18 to 64 in are entrepreneurially engaged (GEM, 2017). And of these female entrepreneurs in Sub-Saharan Africa, 36% cite “necessity” as a motive to start a small business or engage entrepreneurially (GEM, 2017). There are a range of reasons that necessitate entrepreneurship, including the exclusion of women from male-dominant professions or the necessity to generate additional income to sustain personal livelihood and that of families.
While critical to local economic development and female empowerment, SGBs face several challenges in the developing world. To fulfill their growth potential, SGBs often seek between $20,000 and $2 million in investment capital (ANDE, 2010). Yet these enterprises are often too small to access the capital, knowledge, and networks they need to scale, and too large to receive microfinance and seed funding, if there is any available in the first place. This creates a “missing middle” of investment capital in which SGBs in developing nations cannot access the adequate resources required for growth.
This is why the Aspen Network of Development Entrepreneurs (ANDE) is bringing together diverse actors from across the world to empower SGBs. By supporting entrepreneurs and small businesses in developing nations, organizations in the ANDE network put the agency for economic development in the hands of entrepreneurs and small business owners. Rather than outside actors dictating what works, this way of conducting international development trusts entrepreneurs to build businesses and generate their own economic solutions to their local economies.
Sources:
Aspen Network of Development Entrepreneurs (ANDE) 2010 Impact Report. The Aspen Institute. 2011
Donna J. Kelley et al. Women’s Entrepreneurship Report 2016-2017. Global Entrepreneurship Monitor (GEM). 2017
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