RALEIGH-DURHAM, N.C.–Credit unions here got an unconventional lesson in entrepreneurship and capitalism as part of an effort to learn from markets outside the traditional CU experience. In this case, rural marketplaces in Ecuador.
Speaking to Filene’s big.bright.minds meeting, Dr. Rudi Colloredo-Manfeld, senior associate dean and professor of anthropology with the University of North Carolina at Chapel Hill, credit unions were given some insights on “artisan entrepreneurs in the developing world.”
The conventional wisdom around artisans is they are people dedicated to their craft, who are self-sufficient and who participate in a tradition. But years of study in Ecuador’s rural markets has proven that what being an artisan is really about, according to Colloredo-Manfeld, is innovation and risk competition; cultural commons and shared resources, and a winner-take-all inequality.
No Protection
“There is an enormous amount of innovation among artisans. They are reinventing constantly. The one thing they don’t have is any intellectual property protection,” said Colloredo-Manfeld. “It can be copied immediately by the people they compete with. The payoff structure is exactly like that of Hollywood, and it’s a bizarre outcome. The winner take all, the people at the top; they are part of the creative dynamic.”
In his work Colloredo-Manfeld watched years’ worth of “incremental changes in market stalls, where he said experimentation is going on all the time. For example, one shirt maker whose stall was next to a tablecloth maker started to sew pieces of tablecloth into the shirts.
“One thing I take away in 25 years of working with artisans is the pride they take in being business people,” Colloredo-Manfeld told the meeting.
But there are significant challenges. “They innovate, but don’t own the advantage of innovation,” he said.
Colloredo-Manfeld said it’s the emergence of creativity with individual producers in which the value of what everyone does depends on each other even as they try to earn from it individually. That is one “commons” to be found, with others including common products, shared places, innovation, heritage and responsibility.
Who’s Making Money?
One aspect of the Ecuadoran markets has components of both cooperative credit unions and the Darwinian capitalistic marketplace.
“While there is mutuality, there is not equality,” said Colloredo-Manfeld. “The inequality is very interesting. It is a winner-take-all economy. There are disproportionate gains for those on top of this economy. As this goes on there are people who are really annoyed at the people on top, who have to justify their position.”
A Mirror of Hollywood
In that way, he said, it’s much like a certain Tinsel Town.
“Why is a rural farming community the same way as Hollywood earns? A lot of people are good at making things, so it must be something more,” said Colloredo-Manfeld. “In part, it’s because people have heard of the market. The other way to lock this in, remember these markets are connected globally, one chance encounter can put you on the top. When on top, a few people start to make money, in some cases it’s like the lottery.
“People do not take this lying down,” Colloredo-Manfeld continued. “It is tedious to work so long and hard and watch someone do what you do and make all the money. They have these artisan associations; people try to reign in the people at the top. But most of the time the people at the top prevail.”
Questions & Answers
Later, during a Q&A, Filene’s George Hofheimer asked Colloredo-Manfeld about the strength of the “notion of place,” as it’s relevant to credit unions that are on average 18 times smaller than their banking competitors.
“When people are embracing a cultural identity as part of their economic work, part of that moment has to do with their aspirations,” answered Colloredo-Manfeld. “Part of that moment is trying to hand it down to the next generation. The question is does having place bring loyalty to your business? Place becomes a moment when you are defending boundaries.”