Can innovation among micro-entrepreneurs in South Africa teach global corporations a lesson? Rajesh Chandy, Stephen Anderson-Macdonald and Bilal Zia reckon so.

Mass poverty is a huge world problem, typically addressed through multibillion aid programmes. But a grassroots research project in South Africa’s impoverished townships suggests another, sustainable solution. It isn’t the first study into the impact of skills training on microentrepreneurs in developing countries. But prior initiatives have tended to show that any benefits are small or short-lived. This project is remarkable because it is the first to demonstrate the opposite. “You can solve many of the problems of poverty and growth in the world by doing better business,” says LBS’s Rajesh Chandy, one of the three academics who devised the project. “Microentrepreneurs represent the most common type of business in the world. Yet we tend to ignore them – even though they are hiding in plain sight. If we can help them transform their business lives, then we will probably also transform the lives of their communities, given the prevalence of these kinds of businesses.” Not only that, but the lessons learnt that will inform policy in emerging economies such as those in southern Africa could also be applied in developed markets. “By studying the lives of business people many thousands of miles away, we might even learn a bit about ourselves,” says Chandy.

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London Business School Review
March 30, 2016