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Entrepreneurial Capitalism – Skills Acquisition, Community Empowerment and Microfinance

Entrepreneurial Capitalism – Skills Acquisition, Community Empowerment and Microfinance

What is the strategic link among abundant resources, human development and economic development? What is the critical and strategic connection between human capital and economic progress? Why does income inequality persist in spite of significant economic growth? What are some sure paths to social mobility? What are some sure paths to the middle class-the most critical stabilizing force in all societies? Some answers to these nagging policy questions loom large and inform current debates on prudent policy options to cope with the intractable problem of high unemployment of graduates from institutions of higher learning in developing nations in general and in Sub-Saharan Africa in particular.

A meta-analysis of extant academic literature suggests income inequality is persistent in both developed and developing nations in spite of demonstrable and significant economic growth. There are many theoretical, structural and empirical reasons for the widening gap between return to capital and labor on one hand, and compensation to management and workers on the other. For example, capital tends to be more productive, more mobile and receive very favorable tax treatment than labor in many jurisdictions.

Further, global competition, innovation, slower productivity growth, and marginal rate of technical substitution may be depressing wages even in developed nations. Moreover, the benefits of globalization continue to accrue more unevenly to highly skilled labor than to low skilled labor. Finally, periods of economic growth tend correlate with increasing income inequality because different economic sectors as well as individuals do not grow at the same pace.

As we have already explained in many publications on this topic, human capital analysis deals with acquired capabilities which are developed through formal and informal education at school and at home, and through on the job training, experience, and mobility and longevity in the labor market. Please note that nations as well as individuals are portfolios of distinctive competencies that derive from resources and capabilities. Many nations in the developing nations have plenty of resources but lack capabilities-the ability to put them to productive uses.

Clearly, mere possession of resources alone is a necessary but not a sufficient condition for economic development. Functional human capital that manifests in enhanced productivity and innovation is the critical and strategic link between resources and economic development. A preliminary analysis of macroeconomic data indicates that the problem of economic stagnation is not peculiar to developing nations nor confined there. Indeed, for many years in developing nations such as Nigeria, significant percentage of all graduates from institutions of higher learning are underemployed, have contract jobs with no employment benefits or no jobs at all even after the National Service and certification.

Many labor market experts and social observers are apt to point to the glaring lack of requisite knowledge and employable skills in high demand. While this may be true, lack of functional education that leads to employment is only part of the problem. There is significant and gathering empirical evidence suggesting that many of the employed university graduates in Nigeria go without pay or regular compensation for extended periods of time and still others are on contract employment with meager income and no employment benefits or guaranteed ongoing employment.

Before you postulate that skills acquisition is neither a panacea nor the fastest way to employment, please note that employable knowledge and skills are necessary but not sufficient condition for social mobility. This explains in part why many graduates from Colleges of Education and Technical Colleges in very high demand in tightening labor markets do not fare significantly better than those from Liberal Arts or even Business and Engineering Schools.

Therefore, the purpose of Skills Acquisition projects adopted by the Okwelle Skills Acquisition Center (OSAC) is to help graduates and entrepreneurs take effective steps toward functional education, knowledge and skills acquisition, self-employment, self-reliance and financial independence. As sure paths to the middle class and upward social mobility, any knowledge and skills acquisition project must focus on producing entrepreneurs-a crop of graduates with burning desire for self-employment, self-reliance and financial independence. The graduates must not only have requisite knowledge and skills of their specific trade but must be entrepreneurs who are business savvy with demonstrable grasp of business management knowledge and skills. Please note that all entrepreneurs are business owners but not all business owners are entrepreneurs.

Entrepreneurs are special breed of business owners that assume every risk in pursuit of profit and financial freedom. Without the entrepreneurial class other factors of production-land, labor and capital including technology remain dormant and are classified in our profession-financial engineering as non-performing assets. As some experts aptly put it, once you decide to work for yourself you never go back working for someone else. Generally, people do not plan to fail, they simply fail to plan. Additionally, freedom whether spiritual, economic or political is indivisible and must be pursued relentlessly. The passionate drive toward financial freedom is the critical difference that sets entrepreneurs apart.

The Okwelle Skills Acquisition Center Model:

The concept of Skills Acquisition as a vehicle for community empowerment and development is not new. The concepts, principles and challenges are well established in the relevant academic literature. Please see a textbook on same topic for a complete historical sketch on Skills Acquisition principles that informed many Trade schools and Technical colleges, Apprenticeship programs, etc before the Nigerian Civil War. The Okwelle Skills Acquisition Center (OSAC) concept is focused on practical and technology-oriented programs of study.

The OSAC predominantly will offer vocation and career-focused, accredited certificate programs to students drawn from the Niger Delta Region with Imo State as hub and magnet for industries. The Okwelle Skills Acquisition Center will fully integrate functional skills and micro-financing to make the vision of self-employment, self-reliance and financial freedom a reality for our graduates. The Private Public Partnership (PPP Model)-OSAC key strategy is well established and proven. When the relationship with the Niger Delta Development Commission (NDDC) is fully formalized, the OSAC intends to leverage our network with global institutions, articulation agreements with institutions of higher learning in United States, Okigwe in diaspora and friends of Okigwe to execute our mission and attain our strategic objectives.

And because our associates live in the target communities, they bring contextual familiarity to community-based issues. This allows OSAC to avoid policies, analyses and programs which are not tethered to reality. OSAC will seek creative collaboration and strategic partnerships by engaging with global institutions such as the World Bank, IMF, USAID and other Civil Society Organizations (CSOs) with common mission and NDDC through information sharing, dialogue, and consultation at global, national and state levels. Knowledge is OSAC strategic weapon.

Some Operational Guidance:

Many new ventures fail. Therefore, a critical objective of effective skills acquisition projects is to help new entrepreneurs minimize the failure rate of new ventures. Entrepreneurs must have a strong grasp of business fundamentals such as effective management of people, process and products. Additionally, entrepreneurs who undertake new business ventures should proceed with a known probability of success. The OSAC project will integrate microfinance, knowledge and skills acquisition with the 3Ms of successful small business venture (Money, Management and Marketing).

As you know, many non-business majors such as architects, dentists, pediatricians, and lawyers, etc go through university without taking requisite business courses. However, upon graduation they become small business owners of private practice. These deficiencies are then made up in a hurry through on the job training or hiring business managers. However, without a working knowledge of the fundamentals of business enterprise, small business owners become totally dependent on business managers. Agency problem arises when the interests of business owners are divergent from the interests of business managers whether they full-time employees or outside help. Agency problem aside, small business owners must understand what the numbers mean to provide effective leadership, oversight and control. Therefore, the OSAC curricula will include the role of appropriate business systems and functional areas of business anchored on sound management principles and current industry best practices.

A preliminary review of failed small businesses indicates a common pattern: Lack of attention to the 3Ms of business enterprise: Money, management and marketing. Additionally, many small businesses ignore the business entity concept: The activities of a business should be recorded separately from the activities of the owners. Indeed, the personal activities of a small business owner should be separate and distinct from the activities of the business entity. Many small businesses get into trouble for failure to draw this distinction, particularly with respect to cash flows and uses of cash derived from business operations.

Proposed Programs of Study

There will be seven programs of study at OSAC: The School of Information Technology, the School of Drafting and Design, the School of Electronics Technology, the School of Business Technology, the School of Agricultural Technology, the School of Health Technology and the School of Nursing. The OSAC will impart skills and knowledge that our graduates can use to pursue employment opportunities in today’s world.

The OSAC programs of study will blend traditional academic content with applied learning concepts, with a significant portion devoted to practical study in a lab environment. Advisory Councils will comprise of representatives of local businesses and employers that will help each OSAC program periodically assess and update curricula-learning modules, equipment and laboratory design.

Some Strategic Objectives

(1) Beyond the development of human capacity and the building of a continually growing pool of trained workforce, the OSAC will encourage the culture of self-employment and self-reliance for employment and job creation. The ultimate aim of the OSAC will be to encourage the continuous upgrading of our domestic productive processes and capacities and innovation-the adoption of new ways of doing things.

(2) OSAC envisions Financial Literacy seminars under the rubric of Business Technology program that will afford our communities access to income-generating workshops, empowering and reinforcing their self-reliance. Okwelle Skills Acquisition Center with integrated Microfinance programs will provide access to credit, adequate training and cultivating in our graduates the importance of saving and investment.

(3) OSAC plans to provide tools and training to increase farming production at the local level. The Niger Delta Region in general and old Okigwe-Otanzu Otanchara in particular have the natural endowment and the requisite human capital to become the food basket of the South-East. OSAC will encourage community farms where they can implement new techniques and fully mechanized agriculture and industrial food processing.