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The hustle economy and the opposite of idleness - lessons from Nairobi

In the slums of Nairobi, many young people deal with limited prospects for formal employment by engaging in the "hustle economy", livelihood strategies based on economic opportunism and diversification of income streams. Insights from the BoP Protocol project in Nairobi and the research of Dr. Tatiana Thieme.

Photo of Patrick Donohue
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In 2005, I was part of a Cornell and SC Johnson sponsored initiative in the Kibera slum of Nairobi, Kenya, where we worked with local youth groups to design and launch new businesses that could serve their communities. Our efforts eventually led to Community Cleaning Services, a social enterprise providing urban sanitation services and entrepreneurial opportunities for youth.  Our primary partners were youth groups that were part of the "Taka ni Pato" (Trash is Cash) program established by the community organization Carolina for Kibera.

Some of our early insights were around how youths (broadly defined as people between the ages of 18 and 35) approached the idea of formal employment and what they did to combat being "idle", which was seen as a precursor to crime and ruin.  

Our colleague Tatiana Thieme (University of Cambridge) went on to spend several years researching these groups for her dissertation and has published several in-depth articles on urban youth and the so-called hustle economy in Nairobi.

Tatiana's work is a great resource to gain a better understanding of the complexity of income generation for urban youth and their calculation between pursuing employment vs. practicing "livelihood strategies".

A couple of Tatiana's articles are listed below: 
   
Here are a few key takeaways from our work and Tatiana's articles:
 
  • Many youth practiced "livelihood strategies" instead of seeking more traditional employment: they felt more comfortable with having more diverse income streams and considered relying on a single income source (or full-time job) as potentially risky. It was also seen as a form of self-empowerment, consider this quote from an informant in Tatiana's research:

    "We looked at our parents, who toiled their backs doing daily employment for all their lives, and there was no change. When we were growing up, we had no role models. None of our parents who were employed were role models because they had no resources, no power....To make change you need resources. The only guys who had power were thieves, or gangsters, or land grabbers....So we believe that we deserve to be self- employed, because at least if we have our own business, then we are free."
  • A number of young people we met actively avoided being "idle", for example even if they didn't have school or work, they made sure to keep productive by meticulously shining their shoes or brushing dust from their clothes. Opportunities to be visibily productive were welcome.
  • Morever, even petty crime or "thuggery" could be seen as better than "wasting your youth" with substance abuse or other ways that showed you had given up and were just trying to avoid reality.
  • Most took pride in making it by "hustling", but were carefully elusive about their particular recipes for income.  They were were careful about looking like they were doing too well vs. their peers, not only for security reasons but also not to lose identification with the group.   

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Photo of Meena Kadri

Great insights, Patrick. This kind of nuanced understanding is vital so that we're not proposing solutions which lack local relevance.

Photo of Dean Strautins

Hi Patrick:

Boy oh boy do I agree with the need to hustle. I learnt to hustle when I lived in China for 3 years. I ended up being the only graduate out of 20 students with a General Managers job 10 to 20 years ahead of my peers. To this day I still talk with pride how my time in China taught me to hustle. I hustle so much that I have had to consciously stop myself from running between the various things I do as it makes others think there is some kind of emergency happening.

Active people are perfect for the Idea I will later be proposing.

Regards,

Dean

Photo of Patrick Donohue

Thanks Meena!

And I hear you, Dean, hustling is definitely not limited to Nairobi! A hustle mentality was evident in several other parts of the world we worked in, but it was most explicit in Nairobi.

You could also say that the hustle economy has become pretty mainstream in the U.S., although it perhaps better known as the "gig economy" here.

If you haven't seen it, there's a great investigative piece on Fast Company about the gig economy in the U.S.:

http://www.fastcompany.com/3027355/pixel-and-dimed-on-not-getting-by-in-the-gig-economy

That article makes the gig economy seem pretty unappealing, not only is the work low paying, it's highly unreliable , which is a distinction that I think is worth noting. As the youths engaging in the hustle economy were actually looking to reduce income risk, they probably wouldn't suffer extremely unreliable work unless they absolutely had to. But who would?

Instead the ideal situation would would probably involve some optimization of pay level, reliability, and income diversity. That's all speculation on my part though...

Patrick

Photo of Guy Viner

This fastcompany article is fantastic, patrick. Thanks for bringing it to light!

Photo of Dean Strautins

The internet distributes access to unlimited participants. Shares of a business have distributed ownership in to a few hands. The common theme is distribution but what causes sustainable value is a restriction on participants. AirBnb provides a good example of opening distrubution to anyone that wants to participate whilst creating value based on the location of the accommodation that means not everyone worldwide can provide accommodation in that location. Therefore, the restriction on participants is a value creating restriction and not an oppressive restriction.

It is the people globally that have excess cash that do funnel in to support the fewer people that provide accommodation and this is what makes the AirBnB business model a success. The big difference between the value of AirBnb and Walmart is the lack of a sustainable multiplier effect from Walmart. The Walmart value is based on sending money out of communities whereas the AirBnb value is based on sending money in to communities. The many of the world send money in to a smaller community for the AirBnb business model, but the many of a location send money out of the community for the WalMart business model. Walmart is sucking money out of the community and preventing the multiplier effect whilst AirBnB is feeding money in to a community to enhance the multiplier effect.

Shareholders argue that they are owed a return on investment because they buy the risk in a business. But we know that the growth in share value is most often removed from the reality of the business and most shareholders are speculators using the sharemarked to gamble. Businesses gain the most gamblers by focusing on the quantitative numbers that ignores the qualitative impacts of the business on the community in which the business operates.

So what needs to be done is to make the qualitative impact of a business on a community a consideration in determining the value of a share in that business. When a business contributes less to the local community then the multiplier effect is lower and the share value of that business should be lower. This is because when there is lower community contribution from that business then the risk to that business goes higher and the corresponding share value decreases. Then there becomes motivation for that business to contribute more to the local economy/community.

Because shoppers have not been able to see the community effect of how they spend money then they have not had this in mind when spending money. It is what Michael Porter calls the Shared Value. When people have a choice to have their money stay longer circulating in the local economy thus increasing the multiplier effect then they will see more value in that as opposed to an option that sends their spent money directly out of the local economy.

Sure not all local economies can supply all things or is there a cost effective choice. So there needs to be a starting point that more broadly over a larger geographic area of suppliers introduces the qualitative impact of those suppliers. Then the people that have the time and money can reward those businesses that supply in a manner that benefits that local economy. This is what happens now with AirBnb. The poor people are not traveling to New York. The richer people are the early adopters with the time and money to start influencing the market.

So how do we enable more early adopters so there becomes a critical mass large enough to bring about how businesses are measured?

Because I believe I have the answer to this I make these such disections of the existing problem examples as part of my contribution towards the idea I will present in the Idea stage of this challenge. If you think I am wrong then please tell me why so I can improve the solution.

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