Global Entrepreneurship Week: Focus on Lowering Poverty Rates

The Kauffman Foundation of Entrepreneurship is sponsoring Global Entrepreneurship Week, November 12-18. Described as a movement to "inspire people everywhere to embrace entrepreneurship", last year's event involved 123 countries and over 7 million people. The event is meant to give entrepreneurs a boost in starting and growing businesses, and call attention to the role entrepreneurship plays in helping to grow economies globally.

According to Stephen Slivinski, Senior Economist at the Goldwater Institute, entrepreneurship is key to lowering poverty rates. While his report focuses on solely on the US, the findings of his study are intriguing, as he ponders global consequences:

The power of entrepreneurship is often most striking in developing countries. Studies that have focused on poor countries find that growing levels of
entrepreneurship are important to a country’s development and to lowering of the poverty rate.The authors of one of these studies conclude that entrepreneurial activity is “crucial to help millions of poor people who live in undeveloped nations” and that “entrepreneurship is not only relevant for [developing economies], but also necessary.” In the United States, studies have noted that large shares of entrepreneurs are centered in industries that rely on low-wage workers—often the type of workers who find themselves below the poverty line—making thosepotential workers the most likely new hires for an entrepreneur.

Slivinski cites the real world case of Sharon, a divorced mother of two, struggling to meet her family's needs working fast-food jobs. Her dream was to open her own business, a hot dog cart. As she made this happen, her life went from hand-to-mouth existence to substantial stability:

...her last year working at a fast food restaurant, Sharon barely made enough money to pay rent. However,in 1999, “the cart’s first partial year of operation, the business grossed $60,000. After paying the business-related expenses, the family ended up with $20,000 inincome, elevating them above the poverty threshold for the first time since Sharon had divorced eleven years earlier.” By the end of 2000, she grossed more than $90,000. That income allowed Sharon and her family to pay household expenses and have about $6,000 left over to re-invest in her business.

Sharon's story mirrors Eva Muraya's, a Kenyan entrepreneur who shared her story with PovertyCure.

 

Entrepreneurs are essential to economic growth. The businesses they build also strengthen families, create jobs and fulfill needs. Global Entrepreneurship Week is one way to draw attention to not only the need to support entrepreneurs, but to applaud the foundational work they do in our global economy.




Nov 152012
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