Photo Credit: Fikeveni Dlamini
By Fikeveni Dlamini
How can we utilize the ownership of ideas and products to create wealth and alleviate poverty?
We all need to make a living, and after working for “the man,” many of us start to dream of owning our own business. Often people start doing business in the form of a “side hustle” with the hopes of leaving their 8 to 5 job. Although people may start out their entrepreneurship journey because of disillusionment, the most successful entrepreneurs are those who start a business to deliver a product or service that people desperately need. After all, a company is simply a gathering of people, in order to deliver a product or a service. The success of the business is then determined by how efficiently the operation is run, and the level at which the surrounding community benefits from the activities of the enterprise. The creators of the enterprise, through their legitimate ownership of the company, earn their wealth when their business grows.
We need to teach our children about the power of ideas and their execution. We need to solidify the connection between ideas, their execution, the ownership of the enterprise that executes them, and the wealth that can be built through a company’s activities. Wealth is built when an individual or group, in most cases a family, creates a company that executes an idea. The enterprise does not exist simply to make money, but to solve a problem or improve the customer’s life. Equity is the instrument that enables the originators or implementers of an idea, to build wealth. We need to increase the number of small to medium sized enterprises in order to lift people out of poverty. If more families get into entrepreneurial activity, only then, can their communities improve. The wealth can also be passed down to the next generation, as long as the children learn from their parents. Countries that foster family-owned businesses improve socio-economically. Some of the largest and long-lasting enterprises are family-owned.
The developing world needs to build more companies that embrace the power of intellectual property. These companies need to increase the value of their activities by creating products, because you can only legitimately own what you create! Africa needs to move into refining its own raw materials in order to benefit its citizens. Nigeria, for example, exports crude oil then imports the refined final petroleum products. In doing so, they lose ownership, are not close to the end user, and in turn lessen profits. We do not need to quit importing refined products, but we can have agreements that give the developing world the power to refine its own products. The farmers, who are able, need to move towards packaging their own produce, and the packaging companies need to move towards growing the produce that they package. Increasing the value of your product is the best way to increase returns. Every country’s goal should be to export more than it imports. This is at the core of why we work. We are to contribute to others more than we receive from them, giving more than we receive, and producing more than we consume.
So what is the government’s role in all of this? The government is supposed to be the referee that makes sure that every enterprise plays according to the rules. The government should not play the game or pick winners and losers. The developing world is always crippled by the government who meddles in trade, instead of creating the environment for trade. The government should make laws that protect those who cannot protect themselves, and get out of the way of those who are capable. Governments, by their very nature, are slow, so if anything needs to be done quickly, they need not be involved. The government should focus on infrastructure development. It should have metrics or evaluation tools that help identify the needs of the people and then through the tax code or policy, provide the necessary incentives. A government should be in place, not to own, but rather to protect its citizens’ ownership. Starting a business should not be determined by your socio-economic background, it should be determined by your business acumen and the feasibility of your idea. The government should not prevent entrepreneurial activity by stifling the market. A well-regulated free-market system, where new players are welcome, is what most governments need to embrace. They need to make policies that enable, not ones that prevent.
Legitimate ownership is what we need to create wealth and alleviate poverty, not geopolitics. We need to create more companies, especially family-owned enterprises that produce goods that enrich society. Wealth creation is not a race, there are no groups that are left behind. The main problem is that there are too many people who are not taught about the true nature of things. We are not taught about the real reasons why the wealth gap exists and what we, as society, need to do about it. We can create wealth as long as we know how to create it. Politicians cannot help us achieve it, we have to build it on our own. We have to understand things like the pareto principle, in order to be happy for those who do extraordinary things. Let us stop holding back the productive citizens in our country, and embrace the greatness within each of us. We all have something to contribute, albeit in different ways. Talent has never been equally distributed, so we should not expect wealth to be distributed equally. Let us learn what we need to in order to build the companies that will make our society better. Let us create, so that we can own things in legitimate ways.
You can find more articles and views by the author from his blog here: https://fikeveni.blogspot.com