Could small business be a solution to poverty in some of the world's poorest nations? Central Michigan University international business faculty member Mike Pisani has been awarded a Fulbright Scholars award to research the possibility.
Pisani is interested in workers in the "informal economy" — people who provide goods or services but whose incomes are not reported or recorded by the government.
"In an area where people use bicycles as the primary mode of transportation, for example, it could be someone who does bicycle repair. It could be someone who sells homemade foods, or used clothing, from their home," he said.
In most developing nations, that kind of individual- or family-owned business represents roughly one-half of the country's overall economic activity and employs a large percentage of the population.
That sort of entrepreneurship is at the heart of Pisani's greatest passion: empowering others to improve their lives.
"Most of these microbusinesses are born out of necessity: People need to feed their families," Pisani said.
For example, in areas where farming is the primary occupation, Pisani said men who had been injured during the decades-spanning Nicaraguan wars often struggled to find a way to earn a living. If they couldn't farm, they couldn't work and often were excluded from the community.
In one such case, Pisani helped a group of men with disabilities turn their carpentry cooperative into an income-producing small business, enabling them to re-engage with neighbors and provide work with dignity.
Understanding the informal economy
Pisani's interest in small-scale entrepreneurship and informal economies began on his first trip to Teotecacinte, Nicaragua, more than 20 years ago. Through a sister-city partnership, Pisani worked with nongovernmental organizations focused on rural community development.
He worked with individuals and small groups in rural communities to identify business opportunities, teach basic business concepts and language, and develop partnerships and informal networks to support small business.
Now, he's heading back to the Central American country to teach and conduct research at the Universidad Catolica Redemptoris Mater in Managua, Nicaragua.
Pisani's Fulbright research will focus on "tienditas," or small stores, that are primarily women-owned and operated from the home. In rural areas and on the outskirts of urban areas, these small shops are often the only place to purchase needed supplies and provide a way for women to earn money to support their families. He and his Nicaraguan students will study the socio-economic impact of these small stores on the female owners and the surrounding community.
His goal is to provide data that will be used to drive policy decisions about poverty reduction, support for entrepreneurship and empowering women in business.
Pisani has co-authored nearly 100 scholarly journal articles and book chapters on international business, cross-border economics, entrepreneurship and microfinance with an emphasis on the U.S.-Mexico border and Central America. His most recent co-authored book, "Batos, Bolillos, Pochos and Pelados: Class and Culture on the South Texas Border," explores issues of cultural assimilation, education, social inequality and entrepreneurship in Latino South Texas.
About the Fulbright
The Fulbright Program is an educational program sponsored by the U.S. government and designed to build greater cultural understanding between countries and to encourage an open exchange of ideas. Scholars are chosen based on academic merit and leadership potential. As part of their award, they agree to teach or conduct research, or both, in their selected country.
The Fulbright Program awarded close to 800 U.S. scholar awards this year in addition to nearly 2,000 student awards and close to 1,000 visiting scholar awards. Additionally, Fulbright provides 4,000 awards for foreign scholars and students visiting the U.S. Since the program's inception in 1946, more than 380,000 people from more than 160 countries have participated in the educational exchange.