Global Entrepreneurship for Shared Prosperity

More than any previous generation, Americans of today are presented with arresting, vivid images of harsh poverty and perpetual conflict in the developing nations.

Yet this week –- Global Entrepreneurship Week -– is a good occasion to remind ourselves that what fills the screens of our televisions, computers, and laptops each day is not the sum of how those in poorer nations see themselves, nor where they are headed.

On balance, they are more optimistic those in richer countries about the future.

On balance, they are more likely than others to believe in meritocracy: the idea that getting a good education and working hard are the most important factors in getting ahead in life.

And on balance, they believe strongly that the freedom to compete in the marketplace leads to a better standard of living.

These are attributes of stable nations and, by extension, stable economic partners. People tend to stay, consume, invest and thrive in places where they believe their children will have a better life than they or their parents have had.

Yet sustaining that belief requires work at many levels to generate economic growth, new businesses and new jobs.

That is why the United States’ development agencies takes a multi-faceted approach to supporting entrepreneurship.

Start-ups and young ventures are a powerful driver of jobs in economies. But such enterprises need a level playing field to allow them to fairly compete with established companies, some of whom have crony connections with their governments.

That is one of the reasons why U.S. government development agencies such as the Millennium Challenge Corporation fund effective anti-corruption initiatives in Africa and elsewhere.

Many who live in remote areas with “informal” economies -- regions that afford little or no legal protections, regulations, or financial infrastructure--nonetheless have the resourcefulness and drive to become entrepreneurs.

That is one of the reasons why development agencies such as the U.S. Agency for International Development have been supporting effective “mobile money” programs for more than a decade. Today, USAID supports hundreds of thousands of small-scale entrepreneurs whose businesses send, receive and store money on their mobile telephones.

My agency, the Overseas Private Investment Corporation (OPIC), is the U.S. government’s development finance institution. OPIC has provided more than $900 million in financing to microenterprises through some 180 institutions across dozens of developing nations.

OPIC works with U.S. and local institutions to provide financial services to micro-enterprises and low-income households that have traditionally been marginalized because of ethnicity, gender or political instability.

In some regions, such as the Middle East, the rate of entrepreneurship among women is as low as four percent. That is tragic loss of talent that denies entire economies of robust, diversified economic growth in the years ahead.

At a time when roughly 60 million refugees -- many of whom owned or operated not micro-enterprises but small and medium enterprises in their countries of origin -- are trying to rebuild their lives and livelihoods around the world, OPIC is partnering to provide small businesses with loan guaranties through local financial institutions in countries such as Turkey, Lebanon, Jordan, and Egypt.

As they grow, young enterprises often face the so-called “valley of death” -- the stretch during which they have proven their business model and refined their managerial expertise but lack the funding to grow.

For such cases, OPIC has developed working capital loans and lines of credit, and we are pioneering a program to provide growth capital of $1 million to $5 million loans to enterprises companies in impact sectors such as primary education, sanitation, and health care.

Supporting enterprises in developing countries requires partnerships, and everything OPIC does is in partnership with the private sector. We partner to find innovative ideas, draw on funding outside our own budgets, and diversify risk when initiatives are forging into new territory. We require risk-sharing and co-investment with our private sector partners in all our projects.

Despite the headlines that dominate the news each day, across Africa, Asia, and the Middle East we see the indomitable spirit of optimism and enterprise of millions of young men and women. They are hopeful, and they believe they can succeed in a free and fair market.

Americans do more than marvel at that spirit. We support it.

About the Author: Elizabeth Littlefield serves as President and CEO of the Overseas Private Investment Corporation, the U.S. government’s development finance agency. 

For more information:

Development Innovation Ventures grantee Off-Grid: Electric's entrepreneurs are lighting up Tanzania through more reliable, affordable, and sustainable electrical service [USAID Photo]
November 19, 2015

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