Who hasn’t heard of an African farmer with a few dozen chickens building her own business or of the rag picker who saves up for two years, buys a cart and doubles productivity. These are the part of the great mass of budding African entrepreneurs. They will be one of the primary drivers of growth and development in the developing world. Well maybe.
Most of the time these people are investing in a job rather than investing in a business. While this sounds like a bit of a fine grained distinction it is hugely important in understanding what people want from their work and how people’s lives can be improved.
When you invest in a job you have probably tried hard to find one already. When you invest in a business you are probably leaving a job to do so. This goes for the New York investment banker who throws it all away to start a juice bar as much as it does for the Tanzanian public servant who starts a cleaning supplies company. When you invest in a job you aren’t thinking of scaling up and hiring multiple people – you are thinking of your next meal. When you invest in a business you are already planning your expansion – you are thinking of your next move.
The entrepreneur is globally revered. And often rightly so. They create jobs and ideas and products; all things people need and want. But for the vast majority of people when it comes to choosing between working for themselves or working for a salary, ideally with a nice secure contract, people choose the salary. The same applies for the millions of African entrepreneurs.
Take the case of a local carpenter here in Kigoma. He fixed a friend’s table saw three times in a month, earning around $150 for his trouble (for a total of about 6 hours’ work). After the third repair he asked for a job as a full time carpenter for only $125/month (and a total of ~160 hours). He even threw in his repairman skills for free! Why? Because a job brings security. Security that he doesn’t need to worry about when the next customer with a ropey table saw will come along. Security that he will be insured under the national social security plans. Security to know that if a medical emergency strikes he won’t have to sell something to pay the bill.
There are of course entrepreneurs creating firms that will employ dozen, hundreds, even thousands of people. And then there are those that will employ only one. Those that are investing in a job. And they are legion. And they all would likely want a job in the company of the former.
For all the plaudits that we heap on entrepreneurs in Silicon Valley and beyond, I think we do the African kind a disservice if we believe that the road to the middle class lifestyle does not rest on the backs of hard working salary men and women. And the companies that create employment for many, not out of necessity for the one. This was how the middle class developed the world over. And it is most likely how it will develop in Africa.