Analysis: Local Connections are the Key to Success

Connie Duckworth says forging ties with locals is essential to the success of starting a business in a developing country

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Connie Duckworth knows what Janice Ashby has gone through in starting her business. In 2004, Duckworth started Arzu, a nonprofit that sells rugs made by women from the northern and eastern regions of Afghanistan. The organization is thriving today.

"It's very hard to just parachute into a developing country," Duckworth says. "There are so many cultural nuances and ethnic differences, so many things about a particular culture that wouldn't be readily apparent to someone who's not from there. Success or failure of projects or enterprises rests on creating solutions that work within that cultural context."

There are many challenges facing social entrepreneurs working in developing regions. First, there is usually little local government support—if any. The political disorder in Zimbabwe and the resulting inflation almost invalidates the salaries Ashby pays her workers, so she pays them on Fridays and encourages them to shop over the weekend as a hedge against ever-rising inflation.

Second, the challenge for most nonprofits, regardless of where they are based or where they function, is finding funding. Ashby pours profits from EcoAfrica back into the foundation so she can not only pay her workers but provide for extras.

Much like Duckworth, Janice Ashby has to deal with many obstacles that corporations working in developed nations don't have to deal with, such as lack of basics like water and electricity, and runaway inflation. Duckworth applauds Ashby for paying employees each Friday and encouraging them to spend their money while it retains the most value.

Such accommodations and ingenuity are required in places like Afghanistan and Zimbabwe. "If you have to get from point A to point B, you have to create a path through the bushes," says Coumba Touré, Sahel Country Director at Ashoka, a nonprofit that supports individual social entrepreneurs financially and professionally. "Anything that most people take for granted in a normal business—from the most basic thing like being able to come in to the office—you have to work for in these areas."

A Cultural Liaison

Ashby has many guides to help her forge this path. While still running operations out of a U.S.-style hotel in Harare, Ashby got in contact with a young Indian entrepreneur, Raj A. Joseph, who had started a skills-training program in 1998 to empower African youth in Zimbabwe and Mozambique. Joseph provided a model for skills training and introduced Ashby to the priest of St. Mary's. That parish would become Ashby's cultural liaison and connection to the local women. The priest also provided Ashby with the local mission station in Harare where Eco Africa is now based. Such a relationship—with an organization or entity more firmly grounded in the community—is essential for success, say Duckworth and Toure.

But as both Ashby and Duckworth found, setting up the basics for a social venture in developing countries is just the first step. "Like any other job, you need benefits or you can't get the job done," says Duckworth. She notes that by combining enterprise with philanthropy, Ashby has been able to provide not only jobs but much-needed benefits that help her workers.

Through a private donation, Eco Africa was able to supply two generators to the community; one in the mission and one where the working groups practice their craft in Chitungwiza. The generators power laptops and cell phones the women use to keep in touch with their families. Ashby hopes to raise enough funds to supply each woman with a solar-powered cooker.

Duckworth believes Ashby has gone about things the right way mostly because of the connections she has made with Zimbabwe locals. Entrepreneurs in developing countries, according to Duckworth, must build bridges across ethnic and cultural divides. Ashby's connections with the local women and cultural attachés such as the priest who gave Ashby her headquarters in Zimbabwe are invaluable relationships that will guide her to success, says Duckworth.

The fragility of less stable countries can magnify already great problems. Given the political upheaval and ensuing violence that erupted in Zimbabwe after June's controversial Presidential election, the women of the country are in more need than ever. It will take a number of social entrepreneurs to take similar business risks to make the country flourish. "I believe basic business skills are a prerequisite to finding any real solutions to these intractable world problems," says Duckworth. "The type of thinking that business can bring to the picture is a huge plus."