Unlocking Nepal’s Future Through Entrepreneurship

Towering mountains, majestic temples, and colorful cityscapes are all characteristics that I had expected for Nepal. I wasn’t disappointed. Driving into Kathmandu, the myriad of exotic colors, shapes, and smells truly ignited my senses and the sense of respect for tradition and gracious hospitality unsurpassed.

Something I didn’t expect was the sense of liveliness on the streets and the industriousness of the people. This is especially evident amid challenges in infrastructure, connectivity, and constraints such as the lack of electricity for up to 9 hours a day and a noticeable lack of quality roads. In spite of this, there were numerous shops selling all kinds of goods and services dotted around the city creating a palpable sense of entrepreneurship and energy.

23 year old Sushant Shrestha is one such innovator. He works in a clothing shop with a few of his friends in the lively commercial district of Thamal. While looking through their products, I was very impressed by the creativity and quality of their silk screen on shirts. They create exclusive and customizable designs to suit every type of customer and then embosses them on the spot. Adeptly running his fingers through the sewing machine, Sushant creates designs that are distinctly Nepalese, attractive, and of exceptional quality. With themes ranging from the Himalayas, Yaks, to Tibetan flags, I couldn’t help but to pick up a few for my friends and family.

Nepal faces a number of challenges in strengthening its development imperative including improving infrastructure and governance. However, with people like Sushant among others who are using their imaginations to create and deliver tangible value while improving their own livelihoods, I had a feeling that this creative energy would be key to unlocking the country’s future.

Comments

Thanks Joe

Amidst all the negative news coverage’s and disappointing events, I am so glad to read this optimistic take on Nepal. Thanks again. Though Nepal is very proud that it was never historically ruled by any foreign "superpowers"; but unfortunately during those periods Nepal never made any meaningful progress either, thanks largely to the autocratic "Rana Regime" followed by the inept "Panchayat System". When the British left India, they had already built universities, roads, bridges, courts, and other constitutional structures. When "Rana Regime" and "Panchayat" system were toppled, Nepal was left with debt; while the previous rulers and their families’ amassed big wealth, general public were living the lives of 19th centaury. There were absolutely no democratic infrastructures or democratic culture in existence. That very lack of democratic infrastructures and culture are niggling people like Sushant Shrestha. If he slightly succeeds, there will be lot of people around to pull his legs, a big crowd will line up for forceful “political” donations. He won’t feel the protection of law unless he can bribe the "law and order" to keep him and his business safe. Don't get me wrong, I did not (and will never) wish that Nepal too was ruled by British. My point was, for people like Sushant to succeed even further, there has to be democratic structures in place, like a very powerful and efficient High Court. Right now, Sushant leaves his home every morning for work, but by midday he might have to return back because some agitators are revolting on some petty issues. And if the agitators vandalize his business, there is no way he get's compensated for that. But, I whole heartedly support and wish good luck to the entrepreneurs like Sushant. It will require lot more people like him to unlock the current income scheme of Nepal: the foreign aid and remittance. BTW, I'm so jealous you were there in Kathmandu. It's been over two years that I was there. I wish I had your job, LOL :)

Ingenuity and the Small Business

Great, on-the-ground perspective Joe! I find the importance and capabilities of small business to drive a community forward towards progress tend to be left by the wayside with political leaders in the United States and elsewhere. We will see if US President Obama, in his recent State of the Union Address, will be able to help the small businesses in the US make a come back as he proposes to do with investments and tax credits. I am no expert on development, but from the tidbits I have collected from newspaper articles or interviews that it is often these entrepreneurs that can lead the charge. In developing nations or poorer areas of a nation, these incredibly creative and unique individuals have the ability to strengthen their community’s economic landscape. Microloan programs (which the author of this blog introduced me a few years ago) have created new opportunity and in many cases significantly increased an entire village’s standard of living. Not to mention the incredible repayment rates. In another instance, comedic news journalist, Jon Stewart, in October of 2009 interviewed William Kamkwamba on his program. William had successfully built a windmill from scrap pieces around his village to provide a source of electricity. These are the people we need to be finding, funding, and allowing to succeed. I agree with the first commenter that it is the “political donations,” or simply bribes and waste, that reduce a lot of the great work down by the entrepreneurs, like Sushant. Somehow the cycle of waste and corruption must be broken for these investments in local businesses to succeed. How to do that?...I leave up to the real experts in this field.

To Prajwol

Thanks so much for your encouragement and insightful comments and context on Nepal! I think Nepal has a great opportunity to remake and rejuvenate itself since the establishment of the new Democratic Republic. I also think they can benefit from the growth of both India and China and use resources and expertise from both neighbors in creating this new framework as well as constructing universities, roads, bridges, and courts, as you said. As for governance, differences should be set aside between different parties, that remains to be seen with the goal being a government that's effective and clean. Different factions will have to learn to unite and work together to achieve this common aspiration. The less obstacles (strikes, powercuts, corruption, rent seeking) for entrepreneurs like Sushant and everyone else, the more prosperous the country will be. I believe there's a lot of energy waiting to be unleashed, Nepalese overseas are very successful, what's holding them back at home? That being said, Kathmandu was fascinating and Nepal was absolutely gorgeous with awe inspiring geography and architecture. The Nepalese have a lot of to be proud of.

To Mike

Thanks for your perceptive comment and bringing context on an international level! I was quite pleased with seeing small businesses, shops, and restaurants lining most of the streets of Kathmandu, it was refreshing to see as economies of scale in the US has reached such a point that large corporations and chains dominate our economic landscape and small businesses are now seemingly (to me) at an inherent disadvantage to compete. I truly do believe small businesses and entrepreneurs can be the driving force for development in communities and this phenomena is just kicking off in much of developing world which is very exciting and will change innumerable lives in the future. As for accounted and unaccounted costs of doing business, it's a cycle that's difficult to break.

Entrepreneurs for Nepal

Dear Joe, I live in Nepal part of each year and have a fashion design business their with Nepali entrepreneur partners. My experience in Nepal is aligned with the perceptions your reflect in your post: a smart, industrious, innovative and creative vibe that creates a palpable sense of good energy. I also wanted to let you know about a 2000 member strong group, Entrepreneurs for Nepal, that meets the last Thursday of every month at a restaurant venue. Each month an entrepreneur in Nepal speaks to the group sharing their stories of success, failure, and lessons learned. These meetings also provide the youth of Nepal with an opportunity to network with the speaker, other mentors and each other during a social hour following the talk. Leaders of the group also provide one-on-one mentoring to young enterpreneurs launching their projects. The group has a website, http://e4nepal.com, and a Facebook fan page. While Nepal's constitution-writing is behind schedule and the government remains stagnant, groups like Entrepreneurs for Nepal are poised to lead Nepal's economic development by creating businesses, jobs and hope.

To Julie

Thanks for sharing your experiences and organization Julie! I noticed an entrepreneurial spirit from the expatriate community as well such as François Driard's dairy farm and marketing Nepali cheese. All your initiatives seem excellent, I would definitely like to learn more some of the experiences you have. Cheers, Joe

Entrepreneurship development

Entrepreneurship development must be massively supported , it utilize available manpower and resources that might have remain idle and put them into productive use.

Economic Development Tools

Great post. Small businesses and their products have been the reasons that developing countries have seen economic growth and prosperity. This is evident by the economic development past of China, US, Europe, and most other countries. More importantly, I think that if and when a better governance structure is in place in Nepal many opportunities exist for organizations to bolster economic development through small businesses. Mike gave microloans as an example and that will make significant differences. But, small companies that depend on infrastructure (such as telecommunications, internet, it services, etc), which I am assuming are not very common in Nepal could benefit from economic development tools such as an incubator. Incubators will allow reliable infrastructure and office space to be provided until the business is able to make an investment in their own field. I agree that I see a lot of potential for the entire South Asia area.

Entrepreneurship in Asia

I live in China and I'm truly amazed by the people's entrepreneurship skills around here. That's far from my french hometown, where people complain when they can't get a job. Here, they just start their own production or service, and that's great! I met the poorest entrepreneurs in the world, those who buy 0.01 USD worth material to make a 0.02 USD profit and yet they're really motivated! I really think there's a huge market for micro loans but as well individuals who would act as small investors in these countries, and if I had some spare time, I'd surely work on a model to bring these guys and western individual investors together! Why would we spend 5 USD for an Mocha latte when so much value can be created with the same amount of money? An international incubator would be great !

To Ania

Thanks so much for your comment. Encouraging a strong, vibrant entrepreneurial base allows for economic growth and self reliance for the individual reducing the burdens on social safety nets and cash transfer programs.

Supporting small enterpreneurs

Hi Joe, I want to add one comment thanking you for your reporting. Entrepreneurship should indeed be supported. They represent a very dynamic segment of the population and the economic base (de Mel and McKenzie recently estimated very high returns to capital for micro entrepreneurs in Sri Lanka!). I wonder why so many of these microentrepreneurs, however, do not grow their business. All developing countries have so many self-employed individuals, mostly on a very small scale, but rarely (compared to the sheer number of entrepreneurs) do they develop innovative ideas on a large scale. Issues of credit availability come to mind with the existence and usefulness of microfinance. But more must be at play (and microfinance is not a panacea -- see recent papers by Financial Access Researcher Dean Karlan and Jonathan Zinman, and JPAL researchers Banerjee and Duflo). I hope you're there to work on helping these microentrepreneurs!

Entrepreneurship is the most respectable work

Nepal as our very friendly neighboring country i would like to get connect there entrepreneurs & bring synergy within us. Also I am very pleased to know that WORLD BANK is showing very keen interest about young entrepreneurs. In March i am going to join Global Entrepreneur Congress (GEC) 2010 in Dubai. As i am founder of YELL (Young Entrepreneur & Leaders League) Bangladesh & working among young people to foster entrepreneurship here in Bangladesh. Hope we will get both WORLD BANK & Bangladesh Government Concern & help.

Alleviation of Poverty through Entrepreneurship

Dear all, Thanks for great discussion going on entrepreneurship .. ofcourse visit to Kathmandu and looking at Kathmandu based entrepreneur may have provided some insights ... Kathmandu is becoming one of the most costlier places along with high level of entrepreneurship ( mostly on tourist based, land/real estate, and import based trade). Entrepreneurship is a way of development in this era ..not only for Nepal but for all .. the main point to be discussed is to find competitive advantage of Nepal in sector of Enterprise. At present 80% of FNCCI (Federation of Nepalese Chamber and Commerce) deals with 10% of GDP of country. Thus huge amount in GDP is contributed by Small and micro entrepreneurs and farmers (so is the case with other country) I hope what u have found in Kathmandu (meeting an entrepreneur) ..that u will find in Delhi, dhaka or any other places. World Bank programs in Nepal along with Private sector development program of other are focusing on micro and small enterprises at rural areas . It simply is not working ..may be planning as u said is made by looking at Kathmandu or thinking Nepal as same as other places in the world. Lots of Dollars and Nepali Rupees is spent on that and everyone knows Nepal economy is stable thanks to REMITTANCE. and this is done without any DIRECT support. So thanks for bringing this issue in debate, but i strongly believe entrepreneurship in Nepal has to be looked upon differently. ( Import business is most profitable here so everybody talks value addition and nobody supports) . We Need Alternative mechanism including: Fair trade market, Eco tourism, Religious tourism , High level value addition of Medicinal and aromatic plants ... and so on .. Also, not getting more Private Sector who are ready to work with Community Based Entrepreneurs in Nepal, So need of Nepal is 1001 (will be enough) entrepreneurs who can cater to global and national market along with Social business partnership with community ( raw materials and semi value addition). Catch us at Enterprise associates of Nepal is facebook for discussion on enterprise development in Nepal .http://www.facebook.com/pages/Enterprise-Associates-of-Nepal/310782831848?ref=search&sid=1278974765.3463971913..1 for more discussion. Suhrid

To Lexy

Thank you for your comment Lexy. I think an business incubator for entrepreneurs would be excellent as there's so much value to be created. I think China has been successfully growing due to its entrepreneurs and solid SOE management.

To Sohael

Thanks so much for your comment and keep up the good work. I look forward to going to Bangladesh in the near future and seeing the dynamics of entrepreneurship there.

To Suhrid

Thank you so much for your comment and I apologize in the delay of my response. I agree that costs of doing business in Kathmandu may be higher than other places. The mountainous topography and geography are definitely impediments that will hopefully be overcome by investing in more infrastructure and fostering an innovative environment and overcoming the "rent-seeking" mentality and some have. Remittances do play a incredibly important role in Nepal's economy and it seems like this will continue, although not ideal, this is an equalizer for balance of payments. I also concur with you that imports are a dead end especially as neighboring China has almost unlimited capacity to flood Nepal's market. My perspective is that Nepal is very special and should definitely focus on it's unique identity and create high value alternative products as you suggested. I brought back all the natural soaps and papers I could get my hands on and I think there would be a a certain target group that would be very interested as well. I will be following the group on Facebook and hope to keep in touch. Best, Joe

Nepal Needs More Efforts from Private Sector

Government should be there for at policy level. but its the people that lift the nation. entrepreneurs and private sector should contribute more to the society and nation. thanks for bringing this story of a normal person. would like to see more such success stories.

Nepal & Entrepreneurship

Copied from http://www.myrepublica.com/portal/index.php?action=news_details&news_id=17175 Foreign aid, which covers about 40 percent of the government expenditure, is now in question vis-à-vis its impact on Nepal’s sustainable development. Despite billions of dollars provided by donors, the post-conflict development plan failed to fill the structural gaps between the rich and the poor through equitable redistribution of resources. More than 90 percent of resources are still under the control of the same dominant elite who managed aid during post-1951 development planning. ........... Advice. Please refer to above web site for illustrative approach" discussed in literal manner" & picturesque on the constraints of development in Nepal & it`s restricted resources & it`s impact on rural development. Ananta Paudel. Kathmandu,Nepal

great!

Great to see a blog supporting Nepali entrepreneurs. Thank u very much Joe for writing on this topic.actually the main problem with slow development of micro entrepreneurs is with lack of networking and misconception about the quality of their product. Some groups like e4nepal.com are doing very good work.but still the network is so huge and close.Lack of "lets grow together" attitude is the main obstacle in development in entrepreneurship in Nepal. Hope a day will come when all the entrepreneurs will unite for fighting poverty.

Nepal needs mechanism to inspire young entrepreneurship

Its inspiring to read the blog in Nepalese Entrepreneurship Development. There is tremendous opportunity for entrepreneurship development in Nepal. Alternatives with mission to create and support high-growth entrepreneurs and facilitating job-creation and economic growth in Nepal. Alternatives is social enterprise initiated in 2006, actively working in Pokhara, Kaski, Nepal, in entrepreneurship education,micro finance, enterprise development,job creation and activities for reducing youth unemployment. Alternatives conducts different youth entrepreneurship development programs raising local resources. Alternatives established Rural Youth Enterprise Development Center (RYEDC), which has been established in Taprang, remote village of Kaski as well as working to establish 43 RYEDC in Kaski, Nepal for economic uplift of youth in Nepal. Alternatives also organizing other different innovative programs for Enterprise Development as the Key to Economic Growth and expanding prosperity for poor. Alternatives has also recognized from CGIU Award-2009, USA, World Summit Youth Award-2009, Mexico and other many national awards for its innovative approaches to change the society through Entrepreneurship Development. For detail:www.alternativesnepal.org.np. The main problem of entrepreneurship development in Nepal is lack of mentor-ship for youth and entrepreneurship culture. If government and other organization invest to mentor as well as develop entrepreneurship culture in Nepal, entrepreneurship development is possible in Nepal. This eventually inspire Nepalese youths for job creation prosperous Nepal. Regards, Samundra Paudel, Founder/President, Alternatives

What we need.

I believe what we need in Nepal is to establish an eco-system of entrepreneurs that speeds up chances of success by credibly connecting entrepreneurs to results. It is one of the few paths left in this aid addicted place that deserves the attention of multi-lateral agencies like the World Bank. That eco-system could be for example a mixture of a broad entrepreneur network coupled with investment agencies coupled with strong mentor-ship programs for starting/scaling entrepreneurs by other entrepreneurs. Multi lateral agencies focus too much on projects. I urge you to focus more on the people. At any given day, I would bet on an entrepreneur rather than a cool idea or a cool project. At present, I don't see the World Bank focus much on this simple premise.. would love to hear your thoughts. Uj An Entrepreneur, Co-founder of Entrepreneurs for Nepal and a provoker at http://whynepal.com

thanks

Supporting entrepreneurs in Nepal

Joe, it was great to read your post and the comments by other readers. The rising entrepreneurial spirit is definitely a positive sign for the country. I came back to Nepal after a six year stay in the U.S. The reason for my return was the stream of positive news coming out of the country amid all the negativity. In August 2011, I set up Biruwa Ventures, a business incubator of sorts to help aspiring entrepreneurs start their ventures. We have set a shared office space from where entrepreneurs can quickly launch their businesses at a very minimal cost. We have also provided business services like legal and marketing support to start-up ventures along with mentoring through a partnership with Entrepreneurs for Nepal. In the past six months, we have worked with several entrepreneurs and have started seeing some results. In the coming months, we hope to increase our support for entrepreneurs and keep on spreading this positive message. Vidhan Rana Founding Partner Biruwa Ventures, Pvt. Ltd. http://www.biruwa.net/