Social Venture in Dakar anyone?

Summer is over and we are back to blogging here at WYHWTM! Being an Africa-oriented business and economic development nerd, I recently checked out The McKinsey Quarterly’s new report, “Africa at Work: Job Creation and Inclusive Growth,” which highlights the immense economic potential in the continent’s resources, especially its human capital.  While McKinsey’s announcement that “African economies are on the move” (pg1) may be old news to many, the report provides a glimpse into the endless entrepreneurial opportunities in Africa. 

 

Between 2010 and 2020 McKinsey Global Institute (MGI) estimates that Africa will add 122 million people to its labor force, making it the largest labor force in the world by 2035. Currently many African workers are what McKinsey has delicately termed ‘vulnerably employed’ a concept that includes subsistence living and self-employment in the informal economy without social safety nets. The prescribed solution to this prevalent status is an increase in available ‘stable wage-paying jobs,’ namely from manufacturing, agriculture, and retail & hospitality. MGI’s recommendations to put Africa’s economic growth on a similar trajectory to that of South Korea and other emerging markets include: expansion of large-scale commercial farming on uncultivated land, increase in manufacturing sector’s contribution to GDP via either low-cost manufacturing hubs or higher-value-added manufacturing, and modernization and formalization of the retail and hospitality sector (replace informal markets with shopping malls and remove barriers to travel and tourism). While the recommendations provided in the report make perfect sense for a continent on the traditional and seemingly never-ending ‘development path’, they beg the question – what can African countries learn from the shortcomings of the traditional development path and avert in their own evolutions? I personally believe that the possibilities of alternatives paths to alternative states of ‘development’ or well-being are endless. But that is for another day…

Lest we forget, “Africa’s growth needs to be inclusive if it is to improve human welfare and ensure increasing social and political stability.” (pg1) Yes, thank you McKinsey. In order to make this explosive growth inclusive, policymakers, business and entrepreneurs must address the very salient need for work experience opportunities and more hands-on vocational training programs for high-demand skills. ‘Where are the entrepreneurs in this picture?’ one might ask. Interestingly, MGI draws a distinction between ‘opportunity entrepreneurs,’ those who seek to leverage market opportunity and ‘necessity entrepreneurs,’ those, including street hawkers, who are just trying to survive within current market conditions (pg52). ‘Necessity entrepreneurs,’ of which Africa’s share is high compared to other emerging markets, fall under the ‘vulnerable employment’ category. Again, skills-building initiatives are needed to promote ‘necessity entrepreneurs’ to the ‘opportunity entrepreneur’ level.

This is where my restless, creative and entrepreneurial side kicks in and I start thinking of a million potential ventures that could possibly meet these growing needs, particularly in the metropolitan areas of ‘transition economies’ like Ghana, Tanzania and Senegal that have relatively stable sociopolitical contexts and hoards of unemployed energetic and smart young people. There is clearly a need for more homegrown solutions and job creation. Strategic support of local entrepreneurship (the opportunity kind), social innovation and the creative economy are proven methods being used to stimulate transitioning cities within the U.S. (Pittsburgh anyone?), but are rarely at the forefront of US driven economic development efforts elsewhere. (One theory is that this does not support the true agenda of extracting the most value for the U.S. out of the economic development of emerging markets – cheap labor, cheap goods, natural resources, favorable trade terms, low-barrier investments…but I digress). 

So there are at least two needs clearly identified: closing the gap between smart, energetic youth and jobs, and creating new stable jobs in a less foreign-investment-centric way through local entrepreneurship….hmmm. Since this forum is meant to also serve as a platform for sharing unperfected ideas, let’s have a go:

What: A social enterprise based in Dakar, Senegal addressing the two needs stated above

Mission: To engage local young people in local economic development efforts

Two Strategies:

• Support youth job readiness, training and placement
• Promote local entrepreneurship in social and creative sectors

 Services for youth clients would include:

•  Post-graduate internships and job training
• Career development
• Vocational and other workshops
• Entrepreneurship incubator
• Social innovation support programs

 Services for local and foreign institutional clients would include:

• Job posting and internship/full-time recruiting
• Job training/orientation facilitation
• Venture investment opportunities
• Consulting (marketing, strategic management, economic development…etc)

 Sustainable Business Model: Simply put, income from the institutional clients (companies and government agencies) and higher-income youth clients would subsidize services to lower-income youth clients and more socially-oriented activities without a direct source of revenue. This model may also require supplementary income generation, which could be accomplished in the form of another social enterprise branch also used for vocational training purposes (boutique, restaurant, temp agency….etc).

What do you all think? Granted, this is a very simplistic description, I would love to hear your initial reactions, questions, thoughts, related interests and suggestions! A hearty and challenging dialogue is key to any ideation process. Thanks in advance for participating!