In November of 2018, I had the opportunity to visit Morocco for a few days with my friends. We lived in traditional riads in Marrakech and Fez and explored the intricate streets of their Medinas. We also drove three days through the Atlas Mountains and deserts where we rode camels during the day and slept under the stars at night. It was a truly breathtaking experience. However, what lingered in my mind after the trip wasn’t the striking red of the mountains or the mouth-watering tagines, but rather the country’s state of development.
Morocco is one of the wealthiest and most stable countries in Africa with the 5th highest Gross Domestic Product by Purchasing Power Parity in 2019. Even so, as soon as we left major cities like Marrakech and Fez, the lack of infrastructure and resources in rural villages was evident. The cities, though clearly more developed, bore striking similarity to what I remembered China to be 10 years ago.
A professor once told me that an easy way to evaluate where a country is in terms of development is to look at their main mode of transportation. Over a decade ago, China’s streets were riddled with mopeds and motorcycles. This is a common feature of a developing country as its citizens are seeking more efficient yet still affordable modes of independent transportation. Once a country increases its wealth, many of these moped riders are now able to afford cars and we slowly see a transition into car-filled streets, which is what we are familiar with here in Canada and other developed countries.
This was exactly what I witnessed in Moroccan cities. Swaths of mopeds and motorcycles filled the streets, with cars largely used by tourists or the wealthy members of the local community. Noticing this similarity, I wondered:
- What Morocco will be like in 10 years?
- What still needs to be done to bridge the huge gap between the rural and urban regions?
- Can Morocco replicate a similar level of growth and development as China?
Models of Driving Economic Growth
In the past decade, any talk of the economic growth in developing countries has inevitably included China and the success of its authoritarian regime to drive high economic growth for years. This form of economic development is from the top down, with government policies and programs that invest and encourage growth in key industries driving overall country growth. While state-driven development has been the norm since the beginning of civilization, non-traditional forms of development like grassroots development are playing an increasingly important role in the development of local economies.
Grassroots development is described by the Inter-American Foundation as
“the process by which disadvantaged people organize themselves to improve the social, cultural and economic well-being of their families, communities and societies.”
Social entrepreneurship is a prominent form of grassroots development as individuals and small groups of people seek to identify value creation opportunities that can also drive social change in marginalized communities. The promise of social entrepreneurship is lofty but it’s also what makes social entrepreneurship a hot topic among businesses, on university campuses, and in developing countries.
Not all activities or programs that benefit community development can count as social entrepreneurship. There is a strict distinction between social entrepreneurship and other activities such as social activism, and social service. The ventures created by social entrepreneurs must generate a “new and sustained” equilibrium environment while the other activities either take indirect action or promote improvements within the existing equilibrium. When this new business or community equilibrium is created, it will generate a chain of actions to continue to create value and benefit the intended community.
This is why social entrepreneurship is so powerful and must be included in the development toolbox of all countries. Let’s take a look at a case study of how social entrepreneurship transformed the Argan Oil industry in Morocco.
Case Study: Argan Oil Cooperatives in Morocco
In rural Morocco, cooperatives, a form of social enterprise, play a huge role in empowering local economies. During the same trip to Morocco, I visited an argan oil’s cooperative ran by Morocco’s native Berber women. The visit included a short demonstration of how Berber women manually extracted argan oil from argan fruit, followed by the opportunity to purchase a number of argan products created by the cooperative.
Since argan oil became an important export of Morocco in the past two decades, droves of foreign investors have come to Morocco and built modern cold-pressing plants to cheaply extract argan oil in huge quantities for the international market. Prior to this, argan oil was only manufactured by hand by Berber women and thus was too labour intensive and expensive to export outside of Morocco. With the influx of foreign-owned plants in the 2000s, the craft of these women and their involvement in the argan oil production process was reduced to being the mere provider of raw argan kernels. And although these foreign plants were using all local resources to create their products, barely any of the profits made its way back to the community, resulting in the harsh exploitation of Moroccan resources and Berber women’s livelihood.
Mother of Argan Oil in Morocco
This changed when Moroccan professor and argan oil expert Zoubida Charrouf got involved. Zoubida Charrouf first studied the argan tree for her thesis and learnt of the threat the tree faced due to deforestation and desertification. She recognized that in order to ensure the survival of this indigenous species, it needed to have economic and social value to the country. She set out to prove the scientific benefits of argan oil and mobilized Berber women of the South where the trees grew to work in cooperatives and produce the oil. Though she initially faced heavy opposition from men in the community who believed women should stay home and not be involved in earning a living, the outlook changed after she successfully established the first 16 women cooperative in 1996.
A New Equilibrium
With her continued commitment to empowering women through cooperatives along with the funding of European NGOs and the Moroccan government, the cooperatives were slowly able to compete with the foreign-owned factories with their own mechanical presses. Families that harvested the argan fruit were able to bring the raw resources to any cooperative and receive compensation. Women at the cooperatives were finally making a living wage that they could use to achieve financial independence and also to support their families. The creation of an internationally recognized organic certification for the argan forest and argan oil also helped to elevate the status of the product and protect the cooperatives from foreign encroachment.
Though factory-produced argan oil can be sold at half the price of those produced at cooperatives, many foreign companies like L’Oreal have opted to only buy argan oil from cooperatives. As demand for this “miracle” beauty and cosmetic ingredient continues to increase, women from cooperatives and advocates such as Zoubida Charrouf are demanding higher wages and benefits.
Profits from the argan oil industry is now the major source of income for 6% of Morocco’s rural community
Profits from the argan oil industry is now the major source of income for 6% of Morocco’s rural community, a significant improvement from reaping nearly no benefits when the previous equilibrium dominated by foreign investors was in place. These cooperatives not only give Berber women a place to work, many also have education programs that are teaching Berber how to read and write. The ripple effects of the argan oil cooperatives are enormous and show the powerful impact of social entrepreneurship in developing countries when done right.
New Problems, New Solutions
In the 21st century, government policies and programs are neither sufficient nor efficient enough to keep up with the rapidly developing needs of countries and economies. This gap must be filled by businesses and entrepreneurs who are willing and dare to challenge old solutions for new problems. Take internet connectivity in developing countries for example. The last step in Industry 4.0 is the development of digital infrastructure, yet putting in place broadband or fibre network infrastructure is costly and time consuming. In order to tackle this problem, social enterprises such as Project Loon, an Alphabet subsidiary, have found creative ways to provide internet connection through using stratospheric balloons to create wireless networks over the region. This means that rural regions can be connected to the internet in mere months of launching these balloons, and the overall cost is also much cheaper.
This is only one example of the use of new and innovative solutions by social entrepreneurs to solve new challenges that we face around the world today. The innovation and lean business models of social enterprises make social entrepreneurship a dark horse in economic development. Though these efforts may seem local and small at first, successful social enterprises create huge ripple effects that impact economic development.
Social Entrepreneurship is a powerful movement that is spreading across the globe and can take many different forms. We’ve picked three different social enterprises each making waves in their own communities:
Touch Nature - Kolkata India
Touch Nature is a social enterprise based in Kolkata, India that produces handmade natural beauty and aromatherapy products. Located in one of the largest red-light districts in India, Touch Nature is committed to giving women previously involved in the sex trade an opportunity for a new beginning. The social enterprise employs women previously involved in the trade as well as single mothers to produce high quality soap and aromatherapy products. The company provides training and mentorship to help these often marginalized women make a living for themselves and their families without having to rely on the sex trade.
Building A Generation Innovation - Rwanda
Building A Generation or BAG is a Rwanda-based ed-tech startup that aims to increase the employability of higher-education graduates. The startup uses a gamified online platform to provide learning resources and market relevant exercises to better equip graduates for the job market. The founders decided to start BAG when they found out that over 70% of graduates in East Africa are employed in their first year post-graduation. Since the company’s founding in 2017, BAG has connected over 8000 students with learning experiences and virtual internships, and helped over 550 students get placed in jobs.
Solar Sister - Rural Africa
Solar Sister is a social enterprise based in Africa that invests in clean energy solutions for women’s enterprises in off-grid communities. Over 600 million people in sub-Saharan Africa lack access to energy and women disproportionately bear the burden and harmful effects of this reality. Solar Sister’s approach to help eradicate poverty in these regions is to empower local women entrepreneurs and help them build sustainable businesses. In rural areas, access to energy is associated with a 59% increase in wages. So far, Solar Sister has helped over 1200 entrepreneurs and is partnered with the likes of Global Sustainable Energy for All, U.N. Women, and Women in Solar Energy to further expand their mission.