Last week, Technoserve CEO Bruce McNamer visited DCFR to speak about alleviating poverty through private business. In existence since 1968, Technoserve has a business model that connects local entrepreneurs in emerging and developing countries to the global economy.
McNamer says, “Our approach is novel. Our programs are initiatives that many organizations have not attempted to tackle. This particular approach to poverty is fundamentally about markets, opportunities and entrepreneurship.” Ninety-five percent of Technoserve’s employees are ‘on-the-ground’ locals, working in South America, Africa and certain Asian countries.
In a budget-constrained era, the first budget item cut is development assistance. The U.S. government funds about 25% of Technoserve’s activities; otherwise, it is donor-funded. “Even in what are really tough times, many companies are still making pretty good money,” cites McNamer. “Profits are up for many firms. There is an increasing trend within corporations and large multinationals, in spite of the economy, toward more participation in the types of programs that Technoserve facilitates and executes.
Part of the challenge for development in some very poor countries is their inability to access the global economy. “Part of our job is to connect these entrepreneurs of the various countries to the global economy,” states McNamer. “Many of the emerging economies in which we work have weathered the financial crisis better than developed countries. In fact, you do see continued growth in countries such as Ethiopia, Tanzania, and Mozambique, growing at 6, 7, or 8% a year.” With the financial crisis however, another trend has emerged, a global spike in commodity prices. “This has both good and bad effects for the populations we work with,” McNamer explains. “Even very poor, subsistence farmers purchase food, and this negatively affects them. However, the growing global market for food ultimately will benefit the type of clients we work with. It will represent an opportunity for them to sell to global markets with products, either raw or finished, or value-added products on a scale that hasn’t before been possible. ”
Their approach to private sector development is focused in a more grassroots way. McNamer concludes, “We are focused on the private sector and at the enterprise level of a particular segment of the economy, such as agri-business. With a hands-on approach, we are thinking about the scalability of our activities and how many people can be helped. It has to start with one enterprise, one entrepreneur. We start building the sector from that point—one business at a time; one farm at a time; one co-op at a time, with aspirations of sector-wide impact.”
McNamer believes the development “market” as organized today is an inefficient one for allocating resources. Comparable metrics are hard to come by among and between organization types, he remarks. Technoserve performs rigorous business analysis of its impact however.