Entrepreneurs In Kenya and India
Media and Resources
Michael Kremer, Ph.D
Michael Kremer is the Gates Professor of Developing Societies in the Department of Economics at Harvard University and Senior Fellow at the Brookings Institution. He is a Fellow of the American Academy of Arts and Sciences, a recipient of a MacArthur Fellowship and a Presidential Faculty Fellowship, and was named a Young Global Leader by the World Economic Forum. Kremer’s recent research examines education and health in developing countries, immigration, and globalization. He and Rachel Glennerster have recently published Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases.
About the Project
Throughout the developing world, the small family owned business is the ubiquitous form of free enterprise. While these businesses abound, relative to comparable firms in more developed countries very few grow. Economists traditionally think of all businesses as making perfectly rational decisions and fully exploiting all available profit opportunities. However, experience suggests significant departures from this ideal model – some entrepreneurs take better advantage of opportunities around them. In this multi-country project we seek to understand who these individuals are, what in their environment contributes to their development as entrepreneurs, and social, institutional and personal barriers to further growth.
The project seeks to answer questions like the following: To what extent do firms deviate from the efficient ideal? Why do these deviations occur? How important are hard economic factors, training, opportunities to develop specific values, and personality traits? How does personality affect the extent to which growth opportunities are left on the table? Does greater future orientation, lower risk aversion, or openness to new ideas lead to better outcomes? To facilitate the detailed analysis that is crucial to better understand these issues, the project focuses on a single sector. The project focuses on retail because the industry has a similar structure across much of the developing world, accounts for more than 10% of employment in many developing countries and provides a route out of poverty for many. To investigate the extent to which these findings generalize across contexts the study will include two countries, India and Kenya, since most of those subsisting on less than a dollar a day live in South Asia and Africa.
Innovations for Poverty Action
Innovations for Poverty Action is a nonprofit research organization concerned with identifying programs that work to help lift people out of poverty. Founded in 2002 initially under the name Development Innovations, Innovations for Poverty Action (IPA) employs randomized controlled trials (RCTs), along with other research techniques, to measure the impact of specific interventions across many sectors, including microfinance, education, health, governance, agricultural, charitable giving and community development.
Entrepreneurs create products, services and jobs. They expand economies, improve people's lives, provide employment (high and rising wages) and bring about competition. A competitive environment, in turn, gives rise to efficiency, meritocracy and further innovations and entrepreneurial drive.
The potent combination of entrepreneurship and technological innovation can forge an environment that is conducive to further enterprise, involving even government policy in supporting entrepreneurship and innovation.
