Enterprise Creation, Entrepreneur Development and Job Creation in a Single Project: An Impossible Trinity in Community Socio-economic Development Intervention?

Can one community development intervention project be used to create enterprise, develop entrepreneur and create jobs for inexperienced job seekers without relevant skills?

This is the question that bordered us for 10 years while observing and studying intervention community development projects by resource-producing companies in their host communities, governments and Bilateral and Multilateral development Agencies in communities developing and developed countries. We participated in some of these projects.

1000 community and local economic development projects were studied across different countries and regions especially in Africa (Nigeria, Sudan and South Africa) and Columbia and Brazil in South America and Indigenous communities in Canada and USA. The data showed that starting from a development project with a fully developed entrepreneur, an established enterprise and job seekers with the relevant skills and experience, the probability of a successful intervention is around 69-75% in the presence of a market and market access. However, this probability decreases by about 30% if any of these three is missing and drops down to less than 5% if all three are absent.

For enterprise development projects to have any reasonable chance of success there has to be at lease the presence and integration of either an established entrepreneur or an established enterprise or a skilled and experienced workforce. The three, where they are taken as constraints of the projects, cannot bind simultaneously. At least one of them must be relaxed.

The summary of result:

Project Objective: Community Enterprise Development (in the presence of market and market access)

Established Enterprise Established Entrepreneur Skilled Workforce Success Factor
Yes Yes Yes 72%
Yes Yes No 68%
Yes No Yes 47%
Yes No No 33%
No Yes Yes 63%
No Yes No 40%
No No Yes 15%
No No No 5%

The data showed that of all the factors or components of a successful community enterprise development intervention project the most important is the entrepreneur. For projects where an already established entrepreneur was integrated in the project to create an enterprise and create jobs in the community, the success factor was highest. This encouraged us to focus on the selection and role of the entrepreneur.

However, in assessing the quality and character of the entrepreneur necessary for a high level of success factor, we found that in many of the studied projects–cottage, micro or small enterprise development projects, sufficient attention was not given to the selection of the entrepreneur. The observations were that in most project implementation, there appeared to be the assumption that individuals with entrepreneurial traits were common occurrence. it was simply assumed that a random individual in these communities could be built into a successful entrepreneur in enterprise development. This strategy is at variance with what the data suggests.

Generally, entrepreneurs possess certain characteristics, some of which are willingness to take risk, inner drive to be independent, rejection of a certain status quo or “normal” etc. These traits are not general to everyone. Identifying individuals with such traits should therefore be the first task in entrepreneurs or enterprise development project implementation. However, most of the examined projects seemed to simplify this most important task. Gold, however crude or dull and stony it may look, is still gold. This crude gold, however, when passed through the smith’s refining fire of discipline and character development, will become the jewelry that is very attractive and beautiful. Sand Stone, on the other hand, however willing it is to accepting the fire and painful refining process of the smith, will remain stone and cannot become gold, because it is not gold, simple. Its willingness to accept discipline is not effective. Studies show that the general distribution of entrepreneur in the population is about 5% or so, in any population. Identifying this 5% in a rigorous selection process and subjecting the selected candidates through the process of developing the discipline, skills, competency and character that are associated with successful entrepreneurs is as central to successful enterprise development projects as it is a vital component of these intervention projects. It is readily accepted that the Lionel Messis, the Michael Jordans, Warren Buffets or the Mario Puzos of this world come with certain talents and characteristics that are polished and developed into stardom, and these talents and characteristics do not occur in everyone, and cannot be built in individuals either for sympathy or willingness. However, this fact which is also very true for entrepreneurs is mostly not taken into full account in most community development interventions we studied. This is the single most important factor in explaining the success or otherwise of these projects.

Second, it is critically important that at least one component: a highly skilled and experienced work force or an established enterprise or an established entrepreneur is integrated into the project in order have a high chance of successful intervention. However, the highly localized nature of community intervention projects results in local resistance to integrating “external” elements in a benefit allocation system seen by locals as for locals.

Therefore, in order to increase the success of local community enterprise development interventions the objective of the project must be clearly defined: Is it to create a local enterprise? Is it to develop local entrepreneurs? Or is it to create jobs for locals? Is it a combination of any or all of these?

Single objectives could be achieved in single-staged implementation of a given project, however, certain combination of objectives have greater chances of success when implemented in multiple stages.

If the critical objective is singularly to create jobs, then programme managers should be open to integrating external (non-local) entrepreneurs in implementation where any suitable local entrepreneur is not found, and the enterprise might not be a required objective. However, a project requiring the creation of a local enterprise, development of local entrepreneurs and creation of local jobs in a single intervention project might have to be implemented in multiple stages. In stage 1, an external entrepreneur or enterprise or both might be integrated to create local jobs and develop appropriately selected potential entrepreneurs in a robust training, coaching and development programme. An experienced and skilled local work force and entrepreneur from the training programme could then be supported to build local enterprises in subsequent phases of the project. Resources available for such phased implementation might be a constraint.

Trying to achieve local job creation, local enterprise development and local entrepreneurs development where none of these existed, with a single intervention project, even in the presence of a lucrative market, appears almost certain to be an impossible trinity.

Contact:

Joshua Gogo (PhD)

joshuagogo@ldcsgroup.com

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