Tuesday, March 6, 2007

Peter Bamkole's MISFIT Framework

The mission statement of this blog is to examine the effects of innovation in developing economies. It's ended up becoming very focused on India, mostly because of my own background and experience. I will attempt to remedy this as much as I can and provide a broader perspective. I plan to bring in guest bloggers from Brazil, South Africa and China in the coming months. But let's start with Nigeria.

The Nigerian government has recognized the importance of entrepreneurship in their economic development, and has made its study required for all university students. Leaving aside the irony of government mandated entrepreneurship, it is a worthy cause. To promote entrepreneurship in Nigeria, the government set up an organization called Enterprise Development Services, funded by, among others, the World Bank and HP Nigeria.

Peter Bamkole, General Manager, Enterprise Development Services, was in the US recently, and spoke about the challenges of setting up the conditions to support entrepreneurship and innovation in Nigeria. It's very interesting reading, particularly his method of analyzing the conditions that negatively affect entrepreneurship. He calls it the "MISFIT" framework. It's an acronym that expands to:

  • M – Market. How do you provide people access to markets and an understanding of the requirements of that market? For example, how is a small business owner in Nigeria to tackle the US market? Where does she get information about regulations, for example?
  • I – Infrastructure. Lack of predictable and stable power supply; high transportation costs.
  • S – Support Services. Support organizations that provide mentorship and guidance to entrepreneurs are too few and far between to provide the level of service needed.
  • F – Finance. Lack of risk capital available to entrepreneurs. Some of this is also due to entrenched mindset of debt vs equity, since that was the only option for a long time.
  • I – Information. As Mr. Bamkole puts it: "lack of access to information significantly reduces the motivation to venture. In the USA and other developed countries, information abounds. This in no small way helps entrepreneurs make “informed” decisions when venturing. They can research the sector/industry they are about to venture into and the best strategy to adopt, etc. Where there is no access to information, it's like venturing in the dark."
  • T – Technology. The entrepreneur lacks access to the tools to drive efficiency and productivity gains.
The interview is worth reading and/or listening to, and the MISFIT framework applies to all developing economies to one degree or another. Good luck to you Mr. Bamkole!