Shely

S. Wyatt Shely
Ms. Caruso
UWRT 1103-037
8 November 2015
Solutions for Poverty Reduction
Billions of people in todays society experience the debilitating effects of poverty: loss of
dignity, deprivation of basic necessities, and crippled ability to thrive in society. Although there
have been efforts to reduce the disheartening effects of this issue, the prevalence is still widely
noticeable across the globe, especially in underdeveloped countries. Poverty is a
multidimensional problem that requires a multidimensional solution. Solely focusing on
government methods for alleviating poverty is not a convincing approach. Instead, societies
must incorporate internal elements such as disruptive innovation and new venture creation
(Bruton 14). Increasing entrepreneurship and innovation is the most critical step for poverty
reduction within a society. In order to continue upon a path of poverty alleviation, education and
healthcare standards should also be enhanced.
There is a negative correlation between economic growth and poverty. As a society
experiences growth in their economy, the poverty rate is reduced. The most effective method to
grow an economy is to develop new businesses that not only provide an avenue for new jobs
and incomes, but also heighten healthy economic competition (Shirima 3). Impoverished
societies lack job opportunities that provide incomes to support their families. The key to
counter this unfortunate circumstance is to promote the power of entrepreneurship. Societies
whose institutions, politics and culture hinders entrepreneurship, do not experience the
increase in development of societies that do actively promote entrepreneurship development

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(Oghojafor 8). Different regions of China have exemplified undeniable proof of this theory
throughout the past few decades. In fact, this nation is noted for a poverty reduction of more
than 630 million people since the 1980s (Jacket *summary). By investigating countries that
have had incredibly drastic reductions in poverty, the international community might discover
promising processes to employ in different geographic regions.
Coinciding with the statements presented earlier, Chinas poverty was alleviated whilst
also experiencing economic growth, primarily from small business creation. Research
performed on over 700 manufacturing firms in the Yangzi region, has led to the notion that
entrepreneurs in the region, despite the strict Chinese government, created institutional
innovations that led them to start up and grow small, private manufacturing firms (Jacket
*summary). As these manufacturing firms began to grow, aspects characteristic of private
enterprise economies developed along with them. This new private enterprise economy spread
like wildfire throughout the rest of the country. The resulting economic growth, wealth
creation, and manufacturing jobs caused the establishment of China to acknowledge the
numerous benefits of utilizing a private enterprise economy (Jacket *summary). The innovative
entrepreneurs that founded manufacturing firms in the Yangzi region, serves as a symbolic
difference in job creation for China; a job creation that helped cause an incredible reduction in
poverty.
Through the investigation of a case study of the Chinese City of Yiwu, the causal
relationship between the increase of entrepreneurship and innovation, and the reduction of
poverty, can further be determined. In the 1980s, Yiwu was considered an example of
desperate poverty (Si 124). Throughout the past few decades, impoverished Yiwu inhabitants
began escaping poverty by their own efforts through innovative and entrepreneurial strategies

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that shed light on a progression of new business opportunities. Yiwus steps of poverty
alleviation as a result of entrepreneurship are summarized below:
(1) A shift from passive to active attitudes and behavior towards fighting poverty;
(2) Causal mutual interactions among the regions impoverished people and the
people they saw emerging from poverty; (3) The pursuit of small profits rather
than maximized profits; and (4) The creation of disruptive business models
conducive to poverty reduction by people acting both as consumers and
producers. (Si 130)
*The preceding stages depict Yiwus progression to become Chinas symbolic example of how
effective entrepreneurship is a favorable route toward poverty alleviation.
So far it seems as though entrepreneurship is the one and only key to poverty reduction.
Advocates of entrepreneurial approaches for poverty reduction skip over other components that
are instrumental for the war on poverty. Both education, considerably primary education, and
healthcare should have a position in the conversation of poverty reduction. Education gives
people the knowledge and tools to break the cycle of poverty (Burnett sec 1). By Burnetts
statement, it is clear that education should be treated with importance in order to reduce poverty.
Illiteracy tends to prevail in low-income countries where severe poverty is widespread (Burnett
sec 1). This shows the obvious need for education for impoverished populations. The 1989
Convention on the Rights of the Child, under the United Nations, recognizes the need for
primary education to be made compulsory and freely available to all (Burnett sec 2).
Providing decent education should be achieved by both developed and underdeveloped countries.
Poverty has global affects, and therefore calls for a global solution. Poorer countries need to
enact policies that will make school free, accessible, and safe for girls and boys, whereas rich

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countries must live up to promises repeatedly made, and still not fulfilled, to increase aid in
support of these policies (Burnett sec 11).
For my inquiry product, I decided to create a step by step plan to educate and empower
impoverished individuals on how to escape the shackles of poverty. The guide will go through
basic entrepreneurial education, and then lead them through a comprehensive, yet simple, step by
step method to create a mock business. This product is geared not only toward impoverished
individuals in the United States, but also to those in underdeveloped nations, such as those on the
African continent. The purpose is to provide a source of systematic entrepreneurial education, as
well as stimulate the creative thought process in order to come up with innovative ideas. Many
impoverished individuals are so beaten down, that they have lost the ability to think creatively.
They have also lost the confidence necessary to achieve a goal of creating a new business.
Reading my Poor Mans Guide to Escape Poverty will give the impoverished population the
confidence, education, and motivation necessary to take control of their lives by being an
entrepreneur.