Entrepreneurs or Employees?

Parag Gupta
Founder, Waste Ventures

This is a blog post by Waste Ventures staff member Linus Kendall, as Waste Ventures grows more and more of the post on our blog will be coming from other contributors on the team.

This experimental model, being worked on by our amazing Summer Fellows Rachana, is looking to give more ownership and incentive to the waste pickers, while at the same time lowering the influence and power of government and municipalities in waste picking operations. It’s an exciting development process and hopefully in later blog posts we can share more details and results.

For now, I want to follow-up on Parag’s post from a couple of weeks back by asking how much entrepreneurship it is possible or advisable for us to inject into our programming?

Clearly, the idea that with some capital or support anyone from the BoP can or want to be an entrepreneur is false – micro finance has shown us that. It is also clear from several failures in micro franchising that the amount of time required in "business education" needed for franchises to be profitable for the BoP entrepreneur can make the entire schemes loose profitability. If you’ve lived hand-to-mouth all your life – managing cash flows over one month or more can be a very difficult thing (looking at the challenges people – who have received a lot more financial education – in the US or Europe has with credit cards it should be evident how hard this is). Furthermore, is it realistic and ethical to expose people in the poorest segments of society to levels of risk that only a small percentage of richer people in places with much stronger social welfare & protection would take? When you’ve barely got enough for one meal a day, you’ll take whatever means of earning a living that you can, meaning that if the micro franchise doesn’t give immediate returns you’ll quickly quit or drastically reduce your time spent.

On the flip side, waste pickers (in India at least) are used to work independently or in loose collaboration with others. They have some degree of experience with the markets – knowing that prices for plastic and other recyclables will fluctuate by time and and might have the experience that it can be possible to get better prices by shopping around with different kabadis (small scale recyclers). They might never have had fixed employment, so working for yourself and your family is an engrained habit. Because of this, when we have implemented our intervention we have seen that many waste pickers will even deny employement because of the restriction in their individual working freedom it brings.

This leads us to believe that there might be an opportunity for a hybrid between being an employee and an entrepreneur. We hope that by providing a safe base salary but with the ability for the waste picker to operate independently as well as regulate their own work and additional earnings we can use elements of micro entrepreneurship and franchising to achieve an even better system.