Developing
countries that create an institutional environment that is favourable to
economic and technological change tend to benefit most from the effects of
international trade liberalization.1 In contrast, countries that primarily focus on
protecting vulnerable economic sectors with public sector subsidies tend to
crowd out private sector investment.2
The public in affluent countries sees economic
and technological change primarily as a threat rather than an opportunity,
especially when it comes to social and environmental problems. As a
consequence, policymakers in these countries tend to focus on shielding the
poor from economic and technological change while refraining from promoting
economic and social change through growth-oriented entrepreneurship.3
This has left a gap in competence among major donor agencies on how best to
facilitate inclusive technology transfer and assist local entrepreneurship in
promoting home-grown, sustainable growth in the developing world.
The Doha Ministerial
Declaration made technical assistance and capacity building a key component of
the development dimension of trade and set up a WTO work programme on Aid for
Trade at the Sixth Ministerial Conference in Hong Kong in December 2005. Aid
for Trade had the potential to enhance entrepreneurial infrastructure in poor
countries. However, the task force formed to make Aid for Trade operational
failed to come up with a clear vision. Instead, it restricts itself to
monitoring existing development assistance activities, thereby largely relying
on donor agency self-evaluation.4
The principal-agent
problem in development assistance reflects the fact that donor agencies in
affluent countries (the agent) primarily seek to please donors and taxpayers in
their home countries (the principal) rather than developing country recipients.5
The taxpayer-influenced preference for protecting the vulnerable then leads to
the design of development projects that aim to protect existing economic
structures rather than facilitate economic change. All this prevents
growth-oriented entrepreneurship, especially in least developed countries
(LDCs) that desperately need it but are also highly dependent on foreign aid.6
Trade Negotiators should therefore seek the broadening of the definition of Aid
for Trade in order to properly address the principal-agent problem and focus
more on the true needs of the poor beneficiaries rather than the public
preferences in affluent countries.
Aid for Trade must
better connect to private-sector organizations, using web-based applications to
assist local entrepreneurs. In this context, e-mentoring has become a promising
tool to bring tacit knowledge and investment to growth-oriented entrepreneurs,
facilitating more private-sector involvement. E-mentors from all over the world
could assist a growing, young and educated generation of entrepreneurs in the
developing world by providing expertise and supportive e-infrastructure.7
One innovative
programme originates from the African Technology Development Forum (ATDF). The
ATDF has designed a Matchmaking Platform (http://match.atdforum.org) to match
local entrepreneurs with mentors who can represent potential problem-solvers,
investors and business partners, or act in this capacity themselves, or both.
E-expertise and support make up for lack of experience (tacit knowledge),
create a supportive business network and enhance access to funding. Mentors are
supported by mediating institutions on the ground.8
Mentoring
organizations have expressed great interest in ATDF’s e-mentoring initiative.
The Matchmaking Platform allows properly registered mentors to contact
promising entrepreneurs directly and vice versa. Once there is a mutual
interest to collaborate, entrepreneurship coaching institutions in developing
countries and mentoring institutions in developed countries become active
meditators on the ground and thus help ensure the quality and success of such
joint projects initiated with private actors via an e-platform.
Even though many
entrepreneurs and mentors have already registered, operations are expected to
start in May 2011 when the United Nations Conference on Trade and Development,
the World Trade Institute and ITC meet with the Swiss Secretariat of Economic
Affairs to discuss funding over the next three years.
1Juma, C. (2011). The New Harvest: Agricultural
Innovation
in Africa. New York: Oxford University Press.
2Aerni, P. (2009). ‘What is Sustainable
Agriculture? Empirical Evidence of Diverging Views in Switzerland and New
Zealand’. Ecological Economics 68(6): 1872-1882.
3Aerni, P. & T. Bernauer, (2006).
‘Stakeholder attitudes towards GMOs in the Philippines, Mexico and South
Africa: The issue of public trust’. World Development 34(3): 557-575.
4OECD/WTO (2009). Aid for Trade at a Glance
2009: Maintaining Momentum. Paris/Geneva.
5Aerni, P. (2006). ‘The Principal-Agent Problem
in International Development Assistance and its Impact on Local
Entrepreneurship in Africa: Time for New Approaches’. ATDF Journal 3(2): 27-33.
6Ibid.
7Hamilton, B.A. and T.A. Scandura (2003).
‘E-Mentoring: implications for organizational learning and development in a
wired world’. Organizational Dynamics 31: 388-402.
8 Aerni,
P. and D. Rüegger (forthcoming). ‘Making Use of E-mentoring to support
Innovative Entrepreneurs in Africa’. In Thomas Cottier and Mira Burri: Trade in
the Digital Age. New York: Cambridge University.