Iqbal Quadir and Wilford Welch Speak on Social Entrepreneurship: The Engine of Economic Development
I
qbal Quadir, founder of Grameenphone, grew up in Bangladesh where many modern infrastructures such as power, education, and telecommunications were largely concentrated in the capital, Dhaka. Upon arriving in the US in 1976, he was struck by the number of universities outside the US capital. He became fascinated with how resources in rich countries are far more decentralized than in poor ones. Centralization, he asserted, leads to stagnation.
Speaking to an audience of Fletcher/Tufts students and alumni as a guest of the
International Business Global Speaker Series & The Charles Francis Adams Lecture Series, Quadir elaborated on how centralization of resources in cities reinforces poverty in other parts of poor countries. Megacities usually attract further urbanization, leaving rural areas barren and underserved. In some ways this unequal distribution of resources is the legacy of colonization. Current resource allocations are following the same pattern as foreign aid is delivered into central governments where it remains, funding government agencies and civil society.
Quadir felt that the situation could be improved if the poor made money and they mattered to the state: “Governments become responsive to citizens when citizens make economic contributions to governments.” In an effort to help poorer citizens make more significant economic contributions, Quadir networked with the celebrated Grameen Bank, partnering with them to sell cellular phones to microcredit recipients. He reasoned that communication increases productivity and their ability to pay for communications.. He was right. In Bangladesh in 1993, there was 1 phone for 500 people—all in cities, mainly Dhaka. Grameenphone now has 22 million cell phone subscribers, many outside of Dhaka. Other cell phone companies have also sprung up and the country now has 45 million phones—nearly 100 times the number of phones in 1993. Last year, Grameenphone contributed $300 million in taxes and fees to the government. Additionally, 250,000 women entrepreneurs make a living through the sale of cell phone services to their communities. Quadir has since founded
The Legatum Center for Development and Entrepreneurship at MIT to encourage “bottom up” entrepreneurship as the engine of economic development.
Quadir’s remarks were followed by an address from Wilford Welch, an internationally renowned author of Tactics of Hope: How Social Entrepreneurs are Changing the World, business consultant, and social activist. He highlighted Quadir’s work as the kind of social entrepreneurship that can stand up to today’s challenges of extreme poverty and environmental degradation. “If you think the government can get the job done for you on these issues,” he stated, “then you are wrong.” While acknowledging that the participation of institutions like the United Nations and the World Bank is critical to taking on these challenges, Welch noted that they lack the political will and creativity to spearhead the effort. Well-planned business, on the other hand, can be part of the solution instead of the problem. The private sector has better access to capital, talented labor, and distribution systems. They also have more incentive to tackle these issues as consumers are increasingly making purchasing decisions based on a company’s commitment to achieving a triple bottom line.
The most promising driving force for change that Welch sees lies in social entrepreneurship. Welch explained this term as the intersection of good business practices with public good. It is going beyond teaching a poor person to fish—it means revolutionizing the fishing industry. He cited countless examples where social entrepreneurs have transformed a market. Rugmark, for example, used social forces to solve the problem of rugs woven with child labor. It connected Western businesses to Asian producers to create significant change—and public good—in the rug industry. Another example is Kiva, a micro-lending institution that leverages the internet to connect individual donors to entrepreneurs in developing countries who need small loans. Successful social entrepreneurs thus devise solutions that are replicable, scalable, and provide an immediate result. Welch closed his remarks offering some tactics to social entrepreneurs who wish to bring hope for the future: think outside the box, be ready to take risks, and be willing to fail at least twice, as the courage to try again is what forges a leader.
Photographer: Matthew Herbert F'10
Watch a video of Wilford Welch's talk.
Watch a video of Iqbal Quadir's talk.