How Tech Can Make Entrepreneurship Safe for the Poor

What is the future of learning? That will depend on where you live and how old you are. In high-income countries for school-aged youth, it might come in the form of adaptive, digital content or interactive virtual environments. But in low-income countries and especially for people who are already beyond the usual school age, the future of learning will be customized differently.

People living in poverty have acute needs that should be addressed first before many of the topics in traditional curricula. And while it has become popular to confer financial literacy and to teach business skills, it is critically important to enable vulnerable populations to learn entrepreneurial skills in a way that does not expose them to greater risk.

Establishing secure communities of learning amongst vulnerable populations opens the door for more abstract or subject-focused learning later on.

We may, therefore, see more rapid social and financial impact by prioritizing simpler innovation, instead of rushing tablets stuffed with smart programs into the hands of every person on Earth. Such technology-first education initiatives in low-income countries may be putting the cart before the horse.

In countries, like Ethiopia, for example, with a population of 80 million or Nigeria with nearly three times that number: What’s the best educational strategy for the tens of millions of people (youth and adults alike) stuck spending most of their time in search of a subsistence income?

Some (like those participating in the XPrize Foundation’s ongoing education challenge) are focused on bringing the in-school experience of personalized learning onto low-cost tablets and smartphones: hoping that disadvantaged people will spend their time and electricity working through literacy and numeracy software.

While such applications will have a place in the future, there are more transformational approaches to poverty alleviation and better contexts within which to learn vital skills.

A few years ago, a development economist named Courtenay Cabot Venton was tasked with researching the effectiveness of a self-help group (SHG) model being implemented by Tearfund in Ethiopia and inspired by similar groups in India. She found that “for every dollar spent on the program, benefits ranging between $58 and $173 are generated.”

These cost-benefit results are remarkable and practically unheard of in international development programs, and her study kindled interest with development agencies and among the strategists at my company, Code Innovation. We proposed to her that using mobile technologies could help to scale this initiative much faster. Along with One Hen, we are testing our assumptions in both Ethiopia and Tanzania, funded by DFID, the UK’s development organization.

At its core, the savings and credit groups are an educational initiative that focuses more on the innovative organization of group learning than any particular technology.

shutterstock_246580681The program brings together 15-20 people on a weekly basis to save tiny amounts of money. During weekly meetings, these groups work through a curriculum that introduces them to financial concepts, business skills, teamwork strategies, conflict resolution and more.  But over and above the financial and entrepreneurial benefits of belonging to such a support network are the social ties that develop and positively impact group members’ resilience to stress and shocks that might otherwise plunge their families into even deeper poverty and moneylender debt.

As their collective savings increase, members of the group begin to experiment with different income generating activities. Sometimes groups make purchases together in bulk to diminish their cost of living or to sell together to increase the group’s collective capital. Generally, members create and grow small businesses of their own: trading goods, making handicrafts, providing services and more. These groups can last for more than a decade and lift whole families, even whole communities out of poverty.

To begin with, groups only require one individual who is literate and numerate: but inclusive protocols ensure that these core skills gradually spread to other members.

The concept may sound familiar.

Microfinance similarly works with groups of people, lending money and encouraging entrepreneurship and group support to raise living standards. However, savings and credit groups differ fundamentally from standard microfinance projects because they only make loans to one another and are not encouraged to seek external capital. This cuts down on predation and builds solidarity. The groups effectively de-risk entrepreneurialism, which is a big deal.

When members of savings groups default, they are not met with lenders eager to seize their collateral. Instead, they get extra social and business support from the group to help them profit and pay their loans back, with an interest rate that is variable and determined by the consensus of the group.

While many feel like entrepreneurial skills are the best possible asset an individual can have in these times of accelerating technological change, a growing number of voices question the ethics of teaching entrepreneurialism to the poor when such a large percentage of new businesses fail.

Indeed, there are heart-breaking stories of micro-finance gone wrong: poor people falling deeper into debt on account of their miscalculations.

The core innovation of savings and credit groups is embedding the educational experience both within a practical, economic reality and within a dependable, self-supporting group of peers. Initiatives that de-risk business creation, that build community, and effectively transfer complex educational concepts ought to have a central place in the future of education.

And then fast-paced technologies have a place to work their magic.

Efforts like this one are likely to get a considerable boost from the emerging wave of social technologies that facilitate consensus building, collaborative management of finances or delegative democracy. Look for organizations, like the Swarm Collective, to figure out how the blockchain can be used to bring integrity and low-cost transactions to businesses that operate across international borders as a next step in this progression of world-changing tech.

When people are truly vulnerable and disadvantaged and we seek to boost their abilities in an individualistic way, we miss an incredible opportunity to create network effects and exemplary pockets of resilience. While there’s nothing wrong with getting excited about new virtual science labs or learning analytics, it’s important to remember that the future of learning can be much more transformational and connected than an upgraded version of what we have now.  


Nathaniel Calhoun focuses on the intersection of last mile development work challenges, mobile education for poverty alleviation and ecological design. Follow Nathaniel on Twitter @codeinnovation.

Image Credit: paul prescott /

Nathaniel Calhoun
Nathaniel Calhoun
Nathaniel Calhoun helps guide Singularity University’s approach to changemaking and impact as a founding member of its Global Grand Challenge Faculty. He moderates Executive Programs for SU and is the Director of Global Grand Challenges for SU’s 10-week Global Solutions Program. Nathaniel closely tracks innovations in governance technologies, emerging decentralized and cooperative business models as well as the highly disruptive trend of platform cooperatives. He specializes in helping businesses and governments to understand how to leverage and prepare for the growth of these and related trends. Nathaniel is actively creating and implementing digital technologies at a global scale to help alleviate poverty and to drive business literacy and digital and financial services in Sub-Saharan Africa and South East Asia. He does this work through CODE Innovation, a consulting company he founded in 2007 to help development work organizations like UNICEF and DfID to use web and mobile technologies more effectively in their education programming. Code Innovation has received a grant from the Bill & Melinda Gates Foundation to further develop their Self Help Group digital platform. This project is scaling its user base by 9000% in 2017. Nathaniel has two decades of experience in the field of education, training, facilitation, moderation and teaching. He takes particular interest in the threat of technological unemployment and in the differing forecasts and solutions that humanity is offering around this issue. After living and working in Africa for nearly a decade, Nathaniel enjoys helping organizations to think through their strategies with new and emerging markets.
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