Empowering the poor through entrepreneurship

Heather Waugh, Contributor, Jakarta

David Bussau concedes it is difficult to explain the concept of "social entrepreneurship", or even that it is something you have decide to dedicate your life to.

And, he adds, what is even more incredible is that you cannot suppress the entrepreneurial spirit. "If it's in a person's DNA, they will find some way to exercise that extraordinary gift."

A millionaire by the time he was 35, New Zealand-born Bussau was fortunate to acquire at a relatively young age what he calls "the economics of enough", or the means to survive for the rest of his life.

He has turned his entrepreneurial skills to empowering people in poor and devastated areas to expand their own small enterprise through providing small business loans, training, mentoring and financial services.

A cofounder of global organization Opportunity International, and a recipient of an Ernst & Young Entrepreneur of the Year Award 2003 (Australia), Bussau has been helping people rebuild their lives and livelihoods for more than 30 years.

Opportunity International has developed into a market leader in enterprise development and more than 2,500 million loans, with a repayment rate of 97 percent, impacting over 20 million people, have been granted around the world since 2000. Women account for 87 percent of all clients.

His own life changed in 1974 when Cyclone Tracy flattened Darwin, Australia, and he participated in the rebuilding of that city.

From Darwin, he and his family went to Indonesia to assist an earthquake-devastated village; to Nicaragua, where he helped fishermen rebuild their livelihoods after a tsunami; to the Philippines where communities were displaced following the eruption of Mt Pinatubo; and back to Bali following the October 2002 bomb blast to help restart microbusinesses.

The organization currently has more than 50,000 small business clients across Indonesia.

Earlier this year, he began to target post-tsunami enterprise programs and training of up to 10,000 poor entrepreneurs in Aceh.

Assistance has been channeled through businesses as diverse as door and window frame manufacturers, paper recycling and other practical and clearly identifiable needs in the region.

A relatively new concept in Indonesia, social entrepreneurship is not philanthropy. Bussau believes passionately in wealth creation as a mission strategy, rather than the typical non- governmental organization approach of "wealth redistribution".

Financial viability is essential. "If there's no financial viability," he says, "then it's not really entrepreneurship. If you're subsidizing an economic activity (or person) to the extent of 60 percent, then that's charity. There's nothing wrong with charity, but it just doesn't come under the category of social entrepreneurship.

"The difference in the way we operate and others operate is simple: We don't give money to the poor, we loan affordable capital and train people and when that loan is repaid, we loan it out again and again, making a donor gift an ongoing charitable investment."

To be financially viable, there has to be a demand for the product in the market place resulting in client satisfaction. "There are many philanthropists who give away their wealth, but that doesn't mean they are social entrepreneurs," he adds.

Entrepreneurs create opportunities, new environments, products and add value, says Bussau. "Above all, they equip and empower others to release their full potential. And if you ask me what a real entrepreneur is, I think it's someone who empowers others to realize their full potential.

"To do that, you need to serve people, something that is best served by purely commercial concerns that leave the spirit of entrepreneurship intact."

The real entrepreneur is also a leader. "Real leaders are thermostats. They set the temperature. But they're not thermometers. A lot of businesspeople are thermometers: they read the temperature, they read the environment and then they start up a business.

"A real entrepreneur is a leader and a thermostat and who then determines what the temperature's going to be." (By predicting and preempting market needs and trends.)

The United Nations, which has designated 2005 as the International Year of Microcredit, considers microfinance to be one of the key means by which its Millennium Development Goals can be achieved.

Those include the need to combat poverty, hunger, disease, illiteracy, environmental degradation and discrimination against women.

Voted by the Bulletin as one of Australia's "10 Most Creative Minds", David Bussau teaches in three universities in the U.S. and at Oxford, UK. Not surprisingly, one of the subjects he teaches is social entrepreneurship.

Typical student questions, he says, are focused on theories and role models."My own theory is that real entrepreneurs just go and do it. They put the theory around the activity after the event."

Can entrepreneurs fail before they succeed? "Yes, he says, "part of the process is failing."