chapter  3
Entrepreneurship
Pages 23

While there have been proponents (London, Hart & Barney 2011) as well as critics (Karnani 2011) of the bottom of the pyramid (BoP) approach, especially with regard to the role of multinational corporations (MNCs), the entrepreneurial potential of the poor has been widely recognised, particularly in the context of alleviating poverty on a large scale (de Soto 2000). However, definitions of entrepreneurial activities and of an entrepreneurial mind-set are required to clarify what is intended with regard to ‘entrepreneurship’ in this book. For example, trained, poor ladies going door to door to sell goods and receive commissions are not entrepreneurs. Neither are entrepreneurs the farmers who solely bring their produce to a cooperative in order to access richer markets, but are not owners and do not participate in decision-making processes. These may represent successful ways of helping alleviate poverty by increasing the income of the poor, but there is no entrepreneurial skill learned or applied in these transactions. Providing jobs for people is not the same as providing them with the skills to become self-sufficient entrepreneurs. Prahalad (2006) asserts that the poor are resilient and creative entrepreneurs, but there is little evidence that business owners in the informal sector are there by choice and eventually grow their businesses. Instead, much of the existing data suggests that most business initiatives led by the poor generally exist in the informal sector because no salaried jobs are available, something they may rather prefer. While entrepreneurial intent may be ‘natural’, the knowledge and skills required to set up, run and grow an enterprise are not, and BoP entrepreneurs need to go through a learning process to acquire them. As a number of studies

have pointed out, for proper entrepreneurship to flourish at least two elements need to be available: money and training. These will be further discussed in the next chapter together with other factors that can favour or impede entrepreneurial success.