Chris and Anita started off talking about Chris’s overall interests in understanding inclusive economic growth.

Chris’s focus on small and medium firms relates to the ways in which they can support people who seek meaningful work and personal growth.  He remarked on the inspiring ways in which resilient ecosystems and communities emerge in these settings, and what we can learn through understanding them better.

The kinds of misconduct that Chris has observed relates to the ways that debt and competition can drive entrepreneurship – particularly in LMICs – into cutting corners through behaviours such as speeding, dumping, and cheating on quality.

His most recent work has been on minibuses in South Africa, which are incredibly important to the functioning of the economy.   About a quarter of the population uses these minibuses each day, and more than 80% of the population takes a minibus sometime during the course of a year.  These minibuses are critical for getting people to work, and they are driven by entrepreneurs who are deeply committed to that purpose as well as responsive to the incentives that they face.

What are these incentives?

There are several types.   One is the debt that entrepreneurs must carry to purchase and service vehicles.  The interest payments on this debt create pressure to earn revenue.   Chris finds that relieving this pressure through reductions in interest rates most affects a “middle group” of entrepreneurs that are neither chronic speeders nor chronic conformists.   Tweaking is most effective in reducing speed among the middle group.

Is the minibus system designed the right way?   Chris thinks that, while we’d love for Johannesburg to have a public transport system akin to that of London, we’re likely to have the minibus system for quite a long time.  If you want to get people to work, you need to meet them on their terms.   And improving the system is good for everyone:  The drivers, the lenders, and the public.

What are the risks?

About 50% of minibus entrepreneurs fail.   Routes become oversubscribed.  The Associations that do the lending and dispatch the drivers vary in how well they optimize.   Repossession of vehicles is common.   Conflict and intimidation can drive entrepreneurs away.

In the end, the benefits outweigh the costs and risks in Chris’s view.   They create a foundation for building cooperation, community, and economic activity.

What are we learning more broadly from the field of strategy?

Chris sees a number of themes:  The duality of resilience and competition.  The seeking of profit without maximizing it to the detriment of communities.   The collaboration and adaptability of entrepreneurs to the inevitable problems that arise from equipment failure, excessive competition, and other problems.    His future work is on the tradeoffs between these different issues

What makes Chris optimistic?

Chris is constantly impressed by human ingenuity and resilience.  People find ways to persist and carry on even in the most difficult circumstances.