Diaspora Matters

ZBIN Continues to cover Diaspora Strategies and to date we have given you the importance of this important sector. We have covered the benefits that can accrue to a country that implements a successful Diaspora Strategy. Below we look at Diaspora Networks

Some diasporas are vast and global. For example, there are an estimated 70 million in the Irish diaspora, 25 million non-resident Indians and 60 million overseas Chinese, including significant numbers in nearly all countries. They create a web of cross-border connections.39 Some countries have cast the net wide in terms of engaging diaspora members and have developed global diaspora networks. The global networks may be just country-specific or they may be specialized global networks for particular professions in the diaspora. As noted by Ancien, Boyle and Kitchin, ‘Global knowledge networks are transnational networks linking global regions with the homeland, including trade missions, business forums, philanthropy, mentoring, advice and access to decision makers.’

Kutznetsov has set out several important points to consider when establishing global diaspora networks:

1. It is essential that there is a formal framework in place to maintain relationships and make sure that ideas are followed through.

2.However, if you formalise a network too much, you can kill it off. That has also been a common mistake of many developing countries – they try to put together a program that is very formal and it kills all the spirit of entrepreneurship and intrinsic motivation. People will only get involved in a network like this if they want to, not because someone tells them to.

Organizations should avoid launching a network in a blaze of publicity with a big conference before it has been tried and produced some successes. Rather, a conference should be a way of celebrating credibility through showcasing proven successes.

3. Furthermore, he suggests that successful diaspora networks combine the following three main features:

Networks bring together people with strong intrinsic motivation.

Members play both direct roles (implementing projects in the home country) and indirect roles (serving as bridges and antennae for the development of projects in the home country).

Successful initiatives move from discussions on how to get involved with the home country to transactions (tangible outcomes).

Examples of leading global networks include Advance Australia, GlobalScots, ChileGlobal, The Ireland Funds and KEA New Zealand. For further information on these networks please see the section entitled ‘Learn from others: Diaspora organizations share their stories.’ Other examples of global diaspora networks include: NLBorrels which is a global network of Dutch expatriate professionals and entrepreneurs, dedicated to facilitating social interaction, career advancement and exchange of information of interest to the Dutch community living abroad. It currently has 5,500 members in the US and an additional 6,500 members in 81 countries worldwide;43 International Council of Russian Compatriots (ICRC) was founded at the end of 2002 and its main aim is to consolidate the Russian diaspora and to attract the intellectual, economic and financial resources of Russian compatriots who are living abroad;44 Organization of the Swiss Abroad (OSA) represents Swiss expatriates’ interests in Switzerland and is supported by 750 Swiss expatriate associations  and Swiss institutions all over the world.

Every year, several hundred Swiss living all over the world meet at the OSA’s Congress of the Swiss Abroad; and Nigerians in the Diaspora Organisation (NIDO) which is a non-profit organization with its current focus is on professional networking, social advocacy, education, healthcare, technological and economic empowerment, as well as skills and cultural exchange projects in Canada and Nigeria. NIDO is recognized by the Nigerian government as the umbrella organization for all Nigerians around the world and as the vanguard of Nigeria in the international community, promoting the country’s image abroad. NIDO also assists in promoting Nigeria as an investment destination in Africa.
Regional diaspora networks Given the amount of resources and time needed to establish a successful global diaspora network, some organizations have decided to focus on connecting with diaspora members in particular regions.

The benefit of regional diaspora networks is that they allow for a more personalized and focused engagement with diaspora members within a smaller geographical framework. Regional diaspora networks can also act as a catalyst to creating global diaspora networks by building on the success of the regional network. The ‘Ireland Reaching Out Project’ (www.irelandxo.org) is an example of how local areas can develop their own targeted diaspora initiatives and is based on a simple idea – instead of waiting for people of Irish descent to come to Ireland to trace their roots, local Irish regions go the other way. At town land, village and parish level, local Irish communities identify who left their neighborhoods and trace them and their descendants worldwide and engage with them and invite them to become part of an extended ‘virtual community’ with their place of ancestral origin. Part of this program is an annual ‘Week of Welcomes’ which is held in each parish or community in which these newly identified people are invited to return.

Over time the objective of this program, which was founded by returned Irish emigrant, Mike Feerick in 2011, is to systematically identify and unify members of the diaspora, based on their ancestral origins and engage them in terms of them being advisors, investors and promoters of Irish products. Other examples of regional diaspora networks include: BayBrazil which fosters communication and entrepreneurship among professionals in the San Francisco Bay area who work with or wish to develop connections with Brazil; The Lansdowne Club in Sydney, Australia which has over 2,000 members made up of business professionals who are Irish and living in Australia and Australians who have business interests in Ireland. It is now a vibrant and active business network which has spread to other cities in Australia and New Zealand and runs a series of events annually with their St. Patrick’s Day lunch now the largest of its kind in the world and is attended by the Prime Minister of Australia and other leading political and business leaders; Uhollanzi Kenya Association which is the only registered Kenyan diaspora association in the Netherlands. Its goals are to support and promote the welfare of Kenyans in the Netherlands in collaboration with local authorities and partners as well as to enhance Kenyan migrants’ capacity to meaningfully give back to their country of origin; and United Haitians in the United Kingdom network is made up of a group of Haitians, Haitian descendants, and friends of Haiti, living in the United Kingdom. Its main goal is to make a positive contribution in the development of Haiti and to keep the Haitian culture alive in the United Kingdom. They financially support worthwhile non-governmental and sustainable educational projects throughout Haiti with an emphasis on children’s school fees, uniforms and supplies.

City diaspora networks

A number of organizations around the world are now focusing on connecting with their diaspora members and, moreover, affinity diaspora members by launching city diaspora networks. Indeed, the affinity diaspora is an important segment of the diaspora to engage in building such networks, as so many people move to cities to work or study for certain periods or take repeated city breaks. Take the United States, for example, while many people have an affinity to the country as a result of spending time there, typically, it is with a particular city that people identity as their place of affinity. New Orleans is a great example of this and the power of the affinity diaspora network in connecting with the city. These ‘affinity diaspora’ are people, for whom, as the song goes ‘know what it means to miss New Orleans’ and return to the city for one season, reason or another and ‘let the good times roll.’ The other New Orleans diaspora refers to the population evacuated or forced to flee from New Orleans, Louisiana, by the effects of Hurricane Katrina in the late summer of 2005. Drawing from these two different diasporas (a displaced one within its own country and a large affinity diaspora)

New Orleans is an interesting case study on attracting and engaging diaspora populations. Famous playwright, Tennessee Williams himself could be considered an affinity diaspora member of New Orleans, (Mississippi born, Missouri raised and later lifetime traveler) he considered New Orleans his ‘spiritual home’ and was a resident of the city many times throughout his life. It is here that he is honored by an annual literary festival which brings Williams and literary fans from around the country and world to celebrate. These same ‘friends’ of the city and festival were much of the affinity diaspora who have contributed to a continued festival and its subsequent successes (particularly after 2005). The cultural branding of New Orleans has been responsible in no small part for the success of its rebuilding. Programs geared at drawing the affinity diaspora into the city (whether in support for events or to invest) have been invaluable during the five years of rebuilding and reshaping the city. The New Orleans Football team (The Saints) also provide a diaspora meeting point and especially at games in Atlanta and Houston (where many New Orleaneans resettled) have become a time of both cheering the team but also the city itself. Specific festivals such as Essence, Decadence, VooDoo, French Quarter and the New Orleans Jazz and Heritage Festivals (to name a few) all annually re-engage the affinity diasporas’ interest and economy. Furthermore, people are often extremely proud of the particular area that they are from within a country, and city diaspora networks allow them to connect directly with that area. An example of such a network is the ‘Friends of Belfast City’ network. This is an initiative, started in 1998, which promotes partnerships between Belfast and North America, primarily in the areas of business and investment. With almost 600 members from the areas of business, law, academia and government, including individuals from organizations such as Liberty Mutual Insurance, Lehman Brothers, McKinsey & Company, Harvard University and Columbia University, the Friends of Belfast network offers a range of contacts for Belfast organizations working in the US and Canada.

Women and diaspora networks

Female migrants represent a significant portion of total migration, making up 49 per cent of the total in 2010.47 As a result, women’s diaspora networks are increasingly being created as a way of uniting women from the homeland with other women from the diaspora. ‘All over the world there is an important and wide-spread presence of migrant women’s networks … These networks are very active in supporting women, in promoting their needs, their rights, and in simply bringing women together. These are more formal and institutionalised types of networks.’

An example of a women’s diaspora network is the Turkish Women’s International Network which is a global networking platform for women with family, cultural or professional ties to Turkey. The vision of the network is to build a global community of professional Turkish women to cross-pollinate ideas, inspiration and connections; start a mentorship program to mentor younger Turkish women in university programs across the globe; and launch the Turkish WIN ‘Angels and Advisors’ program to connect entrepreneurs to a capital and advice network. The founder of TurkishWIN,

Melek Pulatkonak, states that the motivation for establishing the network was because, ‘As a professional Turkish woman living abroad, I feel the need to connect to a platform where I can network, celebrate the successes of trailblazers, learn from experts in their fields and tap into the power of a large trust network within my community. I know many strong, successful and amazing Turkish women. I am confident there are hundreds or thousands whom I do not know. As an entrepreneur, I decided to do something about it and launched TurkishWIN.’ Examples of women’s diaspora networks include Swedish Women’s Educational Association, Indus Women Leaders, Diaspora African Women’s Network (DAWN) and the Filipina Women’s Network (FWN).

Next generation diaspora networks Countries and diaspora organizations are increasingly realising how important it is to attract the next generation of disapora leadership. Furthermore, younger members of the diaspora are leveraging networks with their diasporic peers as a way of building professional contacts. As a result,next generation diaspora networks are gaining increasing prominence. Examples of next generation diaspora networks include NEPOMAK (World Organization for Young Overseas Cypriots), The Ireland Funds Global Young Leaders Program and the Young Barbadian Professionals Society (YBPS). Members of the Young Barbadian Professionals Society were either born in Barbados or have Barbadian ancestry. YBPS is comprised of a group of individuals with diverse professional and social interests. Its identity is not only based on the professions and education of its members but is deeply rooted in their respect and love for the Barbadian and Caribbean heritage. The YBPS mission is to garner the intellectual capital of its members to further advance positive transformations in the global Barbadian and Caribbean communities, through the society’s economic development, education, and philanthropic programs.

Alumni diaspora networks

The business of international education, or export education as it is referred to in technical economic parlance, represents a major opportunity for countries to develop a network of affinity scholarly/alumni networks. Demand for education beyond boundaries has increased by 40 per cent over the past decade and is forecast to reach 6 million by 2020.49 In 1995, 90,000 US students went to college overseas; in 2007, 250,000 US students went to college overseas.50 In 2008, there were 300,000 international students in UK universities, paying more than £3.6 billion in fees. Britain attracts more students from abroad than any country outside the US.51 The US State Alumni is an example of a diaspora network seeking to engage international students who pursued studies in the US. Furthermore, scholarly networks are being established by diaspora members from the same home country who are studying abroad. These are important networks for countries to consider developing, as increasing numbers of graduates are emigrating. Through these networks graduates can still engage with the university and indeed the home country. Take for example, the alumni of the Indian Institute of Technology which is a group of 15 autonomous engineering and technology oriented institutes of higher education, established and declared as Institutes of National Importance by the Parliament of India. According to a recent study, the alumni of the seven Indian Institutes of Technology (IITs), now in senior positions in industry and government across the world, have a total budgetary responsibility of $885 billion.

Credit: Diaspora Toolkit

As you stated above, there are more networks on Diaspora Associations, we hope to cover more. We will also review the existing Zimbo networks, key strengths and weaknesses and the way forward.

So the Diaspora Remittance market is worth a billion dollars per year? Big guys in the market include Western Union, Mukuru and a host of other players, Econet is a recent entry into the lucrative market.

Now to our question: Is there room for more entrants in the field of money transfers? The answer from ZBIN is YES there is room for more entrance in the  sector-one needs to look at the concept of Peer to Peer Money Transfers. A better option that reduces transfer costs drastically. So how does Peer to Peer P2P work?

We are therefore encouraging our members to do more research on the area especially the setting up and registrations of P2P Money Transfer Service Companies. More information on this topic to be shared in our online newsletter.

So we have covered Kids Business, we also brought you information on Online Forex Trading-how to join our group. We covered Diaspora Investment matters as well. What remains outstanding is the interviews with 2 sisters on the forum-one based in Germany and another one in Kenya. We are hoping to finalise them and share their stories next weekend.

Important Changes

We are slowly building a team that will manage the group. Iam proud that some of the best brains from the ZBIN Community will be providing leadership to the group as trustees, registration of the group is at an advanced stage, Ms Tariro Kutadza will be leading the registration process. We will follow the OECD Principles of Corporate Governance and in the leadership position allocation and operations of the group. The good thing about our group is that we have been in existence for a long period of time; we have a strong and active membership and have representation in Zimbabwe and the Diaspora.

The following members will be part of the board:

1. Ms Martha Tholanah (Hre )-NGO field background
2. Mr Polite Ndlovu (Plumtree )-Business Management background
3. Ms Tariro Kutadza (Hre )-NGO field background
4. Mrs Rudo  Chaza Mataranyika (UK) -Medical field background
5. Mr C Chamakanda (US ) –Accounting background, CGMA
6. Mrs Laureen Munodaani Mushati (US )-Medical field background
7. Ms Hannah Tarindwa (Namibia ) –Business Management background
8. Mr Tavaziva Machigidi (UK )-Accounting background, CA
9. Ms Nyasha Gono (Hre ) –Accounting background, pending, CGMA membership
10. Ms Clara Mapfumo (Hre)-Engineering background
11. Mr Kiva Chiputu (Tete) –Transport and logistics background
12. Rodwell Mawoneke (Cape Town)-Entrepreneurship background

We believe that we have a strong team in place that is made up of locals and diasporans; it is also gender sensitive with 60% female board representation. We have a diverse team with different professional backgrounds. We have included the youth with Ms Nyasha Gono representing the young voice on the board. World Award winner in the HIV and Aids field, Ms Martha Tholanah will lead the board of trustees. Mr Polite Ndlovu from Plumtree will be our interim CEO. We will give you more updates once we have finalised our registration.

Spokesperson for the Group

Ms Tariro Kutadza is going to be our interim spokesperson for group and will be developing materials to market the group; she will manage our twitter account, Youtube media, newspaper articles and our website. Do expect Munemo to slowly handover to Ms Kutadza in the coming few weeks.

Mozambique Trip

A lot of members have been inquiring about the next Mozambique trip and the answer is that its still on. After the Tete trip, the next one is to Beira or Chimoio-we are not looking for many members to join since this is our first tour to this place. We will update you in the coming weeks.

Diaspora Reception

Thank you to everyone who registered and special mention goes to Loveness from USA who donated funds for hosting this event. Its on this week in Queensdale, Harare and we are looking forward to a fruitful event.

ZBIN Wishes you

So this holiday I have all my kids at home, they have done well academically especially my first born who came top in five  out of eight subjects, unbelievable stuff from my first born who is at a top high school in town where competition to get form one places was stiff with every kid required to have four points. We have a trophy and certificates to show for the academic prowess. I also have my second born who quickly adjusted to the new school we transferred her to; she came top in a surprise Maths subject, all along I had known her  as a writer, a better writer than me because she produced a novel when she was in grade 5.  I only started writing when I was in form 3 writing articles for publishing to the Sunday Mail Magazine and also editing the school unofficial tabloid. My third kid also surprised me with a top notch performance at the HICC where she was leading a school dance. This one is also promising to be a poet!

So here iam with brilliant kids and am wondering what they will be doing this holiday, we cannot afford to visit this holiday-money too tight to mention and worries of school fees next year are obvious. Now being business minded iam tinkering with the idea of developing their business skills at a young age. How about 2 or 3 projects where they will all put their efforts together and produce a business plan and implement it?

My story as a kid

I must say I was born an entrepreneur, being an innovative youngster together with my friends we never ran out of money. I remember with my friend Robert selling tomatoes and onions, we sometimes ventured into selling sweets. Our biggest and most successful project was going to the Warren Park Dumpsite where we picked some new small bandages. We sold the bandages in all schools in Warren Park and beyond-the project went viral. Looking at it back I get uncomfortable that we were involved in an unethical business project. The discarded bandages posed a serious health hazard to other kids who were our clients. As excited kids we sold the bandages to all kids in the suburb and few knew where we sourced them.

My primary school teacher Mr Kamudzandu also realised the entrepreneurial skills and gave me milk and maputi to sell to other students during break time-I was one of the best marketers at the school!

Fast Forward to Adulthood

Somewhere along the way I lost the entrepreneurial skills. I went to college and studied finance and then got a job immediately after college and have been working in various sectors with my key strength being in risk management. I only wonder what would have happened had someone noticed this talent and nurtured it? What if the local university had a program where they identified students with entrepreneurial talent and nurtured them? Your guess is as good as mine.

Why Entrepreneurship is Important for Kids

Looking at my history, I believe I wasted my entrepreneurial talent maybe on a good side the fact that I write and offer free business information to others compensates for that? What if at college we had a Prof in the mould of Mr Kamudzandu who could identify business talent and nurture it?

I firmly believe that kids should learn about business from an early stage, they do not need to be forced though; they don’t need to be pressured to be successful. Every holiday should involve fun, relaxation and some business project. They need to learn from an early stage how to manage business, basic financial literacy, how the world works etc.

The sad part is that few schools are covering the business side of education-I doubt whether universities have improved too. My late Prof Mutiti tried to bring some business here and there but it was strictly commercial law from him, other lecturers stuck to their subjects and never veered off radar to talk about entrepreneurship. Maybe there was no need for that because their mandate was to produce learned graduates who can become successful employees?

So the benefits of developing, identifying and nurturing the spirit of entrepreneurship at an early age for kids are plenty and include the following:

Risk taking skills -Developing self esteem-Decision making skills

Leadership skills-Global thinking-Trouble shooting skills

Finances and money awareness-Creative Innovation

Kids should undertake various projects at an early stage and discover their niche and this should be done in a friendly environment where failure is not frowned upon. There is need for fun games and business learning. Business tours for kids and interaction with some of the leading business people in the country.

I believe this is where guidance starts career! Career guidance should not start at high school or college level. By the time your child reaches form 2 you should both be knowing their key strengths and weaknesses.

So what is ZBIN Doing?

We are already late in the holiday but we will share a lot of information on business and the kids. We will share a couple of resources such as videos and articles. We hope to be prepared next term and invite teachers from the forum to register and deliver business classes for the young ones. Other countries have developed system in place to nurture business talent for youngsters and in Southern Africa we need not be left behind.

Kids Starting a Business

Did you know that you can earn a living from online forex trading? Yes you can earn a living if you are willing to work hard. You have to be willing to put in a lot of time in studying and researching. Online Forex Trading is not a get rich quick scheme, you have to put in a lot of hours in studying and mastering the Trading techniques. You need a lot of patience before benefiting from it.

ZBIN has two groups of traders; the first one is for new members who are learning the basics and the other one is for professional traders. Our mistake in the past has been that of adding anyone to our group without verifying whether they have basic knowledge of Online Forex Trading. This resulted  in the addition of many people who were  constantly asking about the basic of Online Forex Trading resulting in less progress of the group.

What is ZBIN Offering?

1. We are not offering anyone instant riches
2. We are offering free resources
3. We will not allow trading on behalf of anyone
4. No fees contributions

So you can join and assess whether this field is for you or not. Before joining make sure that you know the basics, our professional tutors will then help you with additional group resources.

New Requirements to Join ZBIN Online Forex Trading

As from January 2017, we are going to be requiring new recruits to do the following:

1. You must visit the website www.babypips.com and learn about Online Forex Trading. You must be able to show that you understand the basics. This website has a lot of free resources and you can study on your own
2. You must open a demo Online Forex Trading Account and show proof that you understand the basics.

So invest a few hours during weekends to understand the basics, to have knowledge of how to operate demo accounts before sending a request to join ZBIN Online Forex Trading Group.

After joining expect more help from the group in terms of extra resources such as videos, books and audios on online forex trading. All of these resources are available free of charge. We encourage members to spend a lot of time in demo account operations before they go live. The motto from ZBIN is Practice, Practice and more Practice…you need more practice before going live as this is a high risk field.

Advantage of joining ZBIN

So there are a lot of Online Forex Trading on Watsapp but the problem is that the majority of them are operated by dubious characters who are promising members of the public instant high returns. Some trade on behalf of people with no knowledge of online forex trading and results of such practices are predictable…the schemes often fail leading to huge losses for people who would have invested.

As ZBIN we have a brand to protect and are therefore only assisting members with trading skills through free resources. We have a strong policy on members doing their own trading, no one should trade on behalf of another. Anyone found to be trading on behalf of others is ejected from the group.

So we have a lot of free resources and you can learn from others before trying out on your own.

Next ZBIN Online Forex Trading Class

If you are interested in joining then contact our  CEO of the Online Forex Trading Group, Ryan Gambinga and he can be contacted on +263772 627 916 . Get in touch with him by sending a WhatsApp message to join. As explained earlier, do not join our group without basic knowledge. Our groups consist of Zimbabweans, Malawians, Zambians and South Africans.

Wishing you the best

I have in my inbox an inquiry from a ZBIN member who is based in Australia. He is looking for partners with established businesses in Zimbabwe. He would like to know about the nature of the business, profitability and proposed ownership structure.

Response to him

One of the reasons why we established this group is to unlock business opportunities that exist the Diaspora and Locals. ZBIN realised that a lot of our brothers and sisters in foreign land are still interested in Zimbabwe and the majority of them would like to invest back home. What is currently is an institute that spearheads investment in Zimbabwe by the Diaspora.

Notable investment institutes that exist include the Zimbabwe Investment Authority, however this looks mainly looks at high value Direct Foreign Investment and does not specifically target the Diaspora. We also have another institute specifically set tap into the Diaspora Community, Homelink, however there is little action from an institute with the potential to facilitate direct investment of more than USD100m per year from the Diaspora.

So in the absence of no one taking the Diaspora Community seriously in terms of investment, in came Zimbabwe Business Ideas and Network. We have seen the potential and are going to showcase to relevant authorities and especially governments in Southern Africa that its possible to bring development through Diaspora engagement. We are going to showcase that its possible to bring immense benefits to home countries through engagement and partnerships between the Diaspora and Locals.

ZBIN Strategy

Connecting the Diaspora and locals is not an easy process. Connecting people who do not know each other and involve huge sums of money is risky business, extremely risky. Chances that someone can just disappear with investors’ money are extremely high. We have seen in the past what happened to institutions such as ENG and other financial institutions in the past, we have seen a lot of Diasporans being duped by relatives back home when building homes in Zimbabwe. We need not remind you of the recent collapse of MMM do we? There are a lot of dishonest people and schemes around and ZBIN has covered some of them in recent times.

Trust

We essentially have a problem of trust when we talk of relations between the Diaspora and locals. With trust issues come RISK and therefore we have started the following processes:

1. Registration of ZBIN members with businesses back home, putting them into our database
2. Ensuring that our members formalise their businesses
3. Enabling members to enjoy economies of scale through working as a group
4. Access to markets by members
5. Access to finance from local financial institutions

I will explain more in future about the strategies we are implementing for the group to ensure that members have formally registered businesses that can show potential before we encourage the Diaspora to invest. As a group we are going to have vetting and follow up mechanisms so as to reduce risk.

One needs to already have a business running, complying with all local legal and operational laws. You need to show that you have accessed loans from local financial institutions and handled them well. You need to show that you have a market for your business; you need to show the profitability of your business.

Conclusion

A lot of our members continue to inquire about investment like the brother from Australia, we do have various inquiries from USA, New Zealand and UK but we are encouraging members to hold on for a while whilst we put formal mechanisms in place. We are going to have test runs where locals partner amongst themselves and produce good results. The key word here is PROOF, locals should show that you are organised, you are ethical, you must be successful in a difficult environment.

You must show that you have a history of accessing funds from banks and other partners and servicing them before we talk of you partnering with any Diasporan! We will therefore be putting in place mechanisms to facilitate a sustainable and successful business partnership between locals and the Diaspora. When are we going to have the first case study? We have set a target of March 2017 and every two weeks we will be giving you an update on progress made.

1 Speech The first words by humans were spoken by Africans. ”Using statistical methods to estimate the time required to achieve the current spread and diversity in modern languages today, Johanna Nichols — a linguist at the University of California, Berkeley — argues that vocal language must have arisen in our species at least 100,000 years ago. Using phonemic diversity, a more recent analysis offers directly linguistic support for a similar date. Estimates of this kind are independently supported by genetic, archaeological, palaeontological and much other evidence suggesting that language probably emerged somewhere in sub-Saharan Africa during the Middle Stone Age, roughly contemporaneous with the speciation of Homo sapiens.”

2 Writing In 1999, Archaeology Magazine reported that the earliest Egyptian hieroglyphs date back to 3400 BCE which “…challenge the commonly held belief that early logographs, pictographic symbols representing a specific place, object, or quantity, first evolved into more complex phonetic symbols in Mesopotamia.” Who were these original Egyptians? The Greek historian Herodotus.. described the Colchians of the Black Sea shores as “Egyptians by race” and pointed out they had “black skins and kinky hair.” Apollodorus, the Greek philosopher, described Egypt as “the country of the black-footed ones” and the Latin historian Ammianus Marcellinus said “the men of Egypt are mostly brown or black with a skinny desiccated look.” In his book ‘Egypt’, British scholar Sir E.A. Wallis Budge says: “The prehistoric native of Egypt, both in the old and in the new Stone Ages, was African and there is every reason for saying that the earliest settlers came from the South.” He further states: “There are many things in the manners and customs and religions of the historic Egyptians that suggests that the original home of their prehistoric ancestors was in a country in the neighborhood of Uganda and Punt [present day Somalia].” ”Greek historian Diodorus Siculus devoted an entire chapter of his world history, the Bibliotheke Historica, or Library of History (Book 3), to the Kushites [“Aithiopians”] of Meroe. Here he repeats the story of their great piety, their high favor with the gods, and adds the fascinating legend that they were.. the founders of Egyptian civilization, invented writing, and had given the Egyptians their religion and culture.” (1st century B.C., Diodorus Siculus of Sicily, Greek historian and contemporary of Caesar Augustus, Universal History Book III. 2. 4-3. 3) To summarise: “Ancient Egypt was a Negro civilisation. The history of Black Africa will remain suspended in the air and cannot be written correctly until African historians connect it with the history of Egypt. The African historian who evades the problem of Egypt is neither modest nor objective nor unruffled. He is ignorant, cowardly and neurotic. The ancient Egyptians were Negroes. The moral fruit of their civilisation is to be counted among the assets of the Black world.” – Cheikh Anta Diop, The African Origin of Civilisation.

3 Medicine ”The earliest known surgery was performed in Egypt around 2750 BC…. The Ebers papyrus (1550 BC) is full of incantations and foul applications meant to turn away disease-causing demons, and also includes 877 prescriptions. It may also contain the earliest documented awareness of tumors.. Homer (800 BC) remarked in the Odyssey: “In Egypt, the men are more skilled in medicine than any of human kind” and “the Egyptians were skilled in medicine more than any other art”. The Greek historian Herodotus visited Egypt around 440 BC and wrote extensively of his observations of their medicinal practices. Pliny the Elder also wrote favourably of them in historical review. Hippocrates (the “father of medicine”, Herophilos, Erasistratus and later Galen studied at the temple of Amenhotep, and acknowledged the contribution of ancient Egyptian medicine to Greek medicine.

4 Architecture The African empire of Egypt developed a vast array of diverse structures and great architectural monuments along the Nile, among the largest and most famous of which are the Great

Pyramid of Giza and the Great Sphinx of Giza The pyramids, which were built in the Fourth Dynasty, testify to the power of the pharaonic religion and state. They were built to serve both as grave sites and also as a way to make their names last forever. The size and simple design show the high skill level of Egyptian design and engineering on a large scale. The Great Pyramid of Giza, which was probably completed c. 2580 BC, is the oldest and largest of the pyramids, and is the only surviving monument of the Seven Wonders of the Ancient World. The pyramid of Khafre is believed to have been completed around 2532 BC, at the end of Khafre’s reign.

5 Mathematics The invention of mathematics is placed firmly in African PRE-HISTORY ”The oldest known possibly mathematical object is the Lebombo bone, discovered in the Lebombo mountains of Swaziland and dated to approximately 35,000 BC. It consists of 29 distinct notches cut into a baboon’s fibula. Also prehistoric artifacts discovered in Africa and France, dated between 35,000 and 20,000 years old [respectively], suggest early attempts to quantify time. The Ishango bone, found near the headwaters of the Nile river (northeastern Congo), may be as much as 20,000 years old and consists of a series of tally marks carved in three columns running the length of the bone. Common interpretations are that the Ishango bone shows either the earliest known demonstration of sequences of prime numbers or a six month lunar calendar. Also, Predynastic Egyptians of the 5th millennium BC pictorially represented geometric designs. ”Numeral systems have been many and diverse, with the first known written numerals created by Egyptians in Middle Kingdom texts such as the Rhind Mathematical Papyrus. The earliest uses of mathematics were in trading, land measurement, painting and weaving patterns and the recording of time. More complex mathematics did not appear until around 3000 BC, when the Egyptians and Babylonians began using arithmetic, algebra and geometry for taxation and other financial calculations, for building and construction, and for astronomy”

6 Mining of minerals The oldest known mine on archaeological record is the “Lion Cave” in Swaziland, which radiocarbon dating shows to be about 43,000 years old. Much later on, the Africans of Egypt mined malachite….Quarries for turquoise and copper were also found at “Wadi Hamamat, Tura, Aswan and various other Nubian sites”..The gold mines of Nubia were among the largest and most extensive in the world, and are described by the Greek author Diodorus Siculus. He mentions that fire-setting was one method used to break down the hard rock holding the gold. One of the complexes is shown in one of earliest known maps. They crushed the ore and ground it to a fine powder before washing the powder for the gold dust.

7 Iron Smelting Iron smelting is a form of extractive metallurgy; its main use is to produce a metal from its ore. This includes production of silver, iron, copper and other base metals from their ores. Smelting uses heat and a chemical reducing agent to decompose the ore, driving off other elements as gasses or slag and leaving just the metal behind. Early iron smelting: ”Where and how iron smelting was discovered is widely debated, and remains uncertain due to the significant lack of production finds.. [but] there is a further possibility of iron smelting and working in West Africa by 1200 BC. In addition, very early instances of carbon steel were found to be in production around 2000 years before the present in northwest Tanzania, based on complex preheating principles. These discoveries are significant for the history of metallurgy.”

8 Religion Greek historian Diodorus Siculus. From his own statements we learn that he traveled in Egypt around 60 BC. His travels in Egypt probably took him as far south as the first Cataract.He wrote about the ”Ethiopians” south of Egypt. “They further write that it was among them that people were first taught to honor the gods and offer sacrifices and arrange processions and festivals and perform other things by which people honor the divine. For this reason their piety is famous among all men, and the sacrifices among the Aithiopians are believed to be particularly pleasing to the divinity,”

9 Laws Stephanus of Byzantium, who is said to represent the opinions of the most ancient Greeks, says: “Ethiopia was the first established country on the earth, and the Ethiopians were the first who introduced the worship of the Gods and who established laws.” Quoted by John D. Baldwin, Prehistoric Nations, p. 62.

10 International Trade In 1825, Arnold Hermann Heeren (1760-1842), Professor of History and Politics in the University of Gottengen and one of the ablest of the early exponents of the economic interpretation of history, published, in the fourth and revised edition of his great work Ideen Uber Die Politik, Den Verkehr Und Den Handel Der Vornehmsten Volker Der Alten Weld, a lengthy essay on the history, culture, and commerce of the ancient Ethiopians, which had profound influence on contemporary writers in the conclusion that it was among these ancient Black people of Africa and Asia that international trade was first developed. He thinks that as a by-product of these international contacts there was an exchange of ideas and cultural practices that laid the foundations of the earliest civilizations of the ancient world. Heeren in his researches says: “From the remotest times to the present, the Ethiopians [ancient name for blacks south of the Sahara] have been one of the most celebrated, and yet the most mysterious of nations. In the earliest traditions of nearly all the..civilized nations of antiquity, the name of this distant people is found. The annals of the Egyptian priests are full of them, and the nations of inner Asia, on the Euphrates and Tigris, have interwoven the fictions of the Ethiopians with their traditions of the wars and conquests of their heroes; and, at a period equally remote, they glimmer in Greek mythology. When the Greeks scarcely knew Italy and Sicily by name, the Ethiopians were celebrated in the verses of their poets, and when the faint gleam of tradition and fable gives way to the clear light of history, the lustre of the Ethiopians is not diminished.”

11 Philosophy Philosophy is the study of general and fundamental problems, such as those connected with reality, existence, knowledge, values, reason, mind, and language. Philosophy is distinguished from other ways of addressing such problems by its critical, generally systematic approach and its reliance on rational argument. Philosophy in Africa has a rich and varied history, dating from pre-dynastic Egypt, continuing through the birth of Christianity and Islam. Arguably central to the ancients was the conception of “ma’at”, which roughly translated refers to “justice”, “truth”, or simply “that which is right”. One of the earliest works of political philosophy was the Maxims of Ptah-Hotep, which were taught to Egyptian schoolboys for centuries…Ancient Egyptian philosophers made extremely important contributions to Hellenistic philosophy, Christian philosophy, and Islamic philosophy. ”Ancient Egyptian philosophy has been credited by the ancient Greeks as being the beginning of philosophy”.

12 Art The oldest art objects in the world—a series of tiny, drilled snail shells about 75,000 years old—were discovered in a South African cave.
 

Though the term “family business” may call to mind visions of local mom-and-pop firms, family-controlled companies play a huge role on the global stage. Not only do they include sprawling corporations like Walmart and Tata Group, but they account for more than 30% of all companies with sales in excess of $1 billion. And over the long term, their financial performance exceeds that of traditional public companies, according to a new study by BCG and École Polytechnique.

Family-controlled companies surpass their peers because they focus on resilience, not short-term results. During economic booms, this approach leads them to forgo some opportunities (and hence do slightly worse than their counterparts), but it puts them in a position of strength during downturns, when they shine. The researchers identified seven specific ways in which family-run businesses build their resilience:

They’re frugal in good times and bad.

1. They set a high bar for capital expenditures.
2. They carry little debt.
3. They acquire fewer (and smaller) companies.
4. They’re more diversified.
5. They’re more international.
6. They retain talent better than their competitors do.

Though these practices come more naturally to executives who feel an obligation to be stewards for the next generation, executives at any corporation can adopt them. Indeed, the researchers uncovered a number of nonfamily-controlled companies that mimicked the behaviors of family firms and saw very similar patterns of performance.

To many, the phrase “family business” connotes a small or midsized company with a local focus and a familiar set of problems, such as squabbles over succession. While plenty of mom-and-pop firms certainly fit that description, it doesn’t reflect the powerful role that family-controlled enterprises play in the world economy. Not only do they include sprawling corporations such as Walmart, Samsung, Tata Group, and Porsche, but they account for more than 30% of all companies with sales in excess of $1 billion, according to the Boston Consulting Group’s analysis.

Conventional wisdom holds that the unique ownership structure of family businesses gives them a long-term orientation that traditional public firms often lack. But beyond that, little is known about exactly what makes family businesses different. Some studies suggest that, on average, they outperform other businesses over the long term—but other studies prove the opposite.

To settle that question, we and Sophie Mignon, an associate researcher at the Center for Management and Economic Research at École Polytechnique, compiled a list of 149 publicly traded, family-controlled businesses with revenues of more than $1 billion. They were based in the United States, Canada, France, Spain, Portugal, Italy, and Mexico. In each business a family owned a significant percentage, though not necessarily a majority, of the stock, and family members were actively involved both on the board and in management. We then created a comparison group of companies from the same countries and sectors, which were similar in size but not family controlled. (We didn’t look at Asian companies because so many of them are family controlled that it’s difficult to find a suitable comparison group.) Then we did a rigorous analysis of the ways in which those two sets of companies were managed differently and how that affected performance.

Our results show that during good economic times, family-run companies don’t earn as much money as companies with a more dispersed ownership structure. But when the economy slumps, family firms far outshine their peers. And when we looked across business cycles from 1997 to 2009, we found that the average long-term financial performance was higher for family businesses than for nonfamily businesses in every country we examined.

The Long-Term View of Family-Business Performance

Though family-run companies slightly lag their peer group when the economy booms, they weather recessions far better.

The simple conclusion we reached is that family businesses focus on resilience more than performance. They forgo the excess returns available during good times in order to increase their odds of survival during bad times. A CEO of a family-controlled firm may have financial incentives similar to those of chief executives of nonfamily firms, but the familial obligation he or she feels will lead to very different strategic choices. Executives of family businesses often invest with a 10- or 20-year horizon, concentrating on what they can do now to benefit the next generation. They also tend to manage their downside more than their upside, in contrast with most CEOs, who try to make their mark through outperformance.

At a time when executives of every company are encouraged to manage for the long term, we believe that well-run family businesses can serve as role models. In fact, in our research we were able to identify several companies with dispersed ownership whose strategies mimicked those of family firms. Those companies also exhibited a similar performance pattern: below their peers during upturns but leading the pack in times of crisis. (See the sidebar “It Operates Like a Family Business—but It’s Not.”)

It Operates Like a Family Business—but It’s Not

 It makes sense that family-controlled companies would focus on resilience instead of performance, but why can’t other companies mimic that strategy?

In fact, some do. Consider Nestlé. It follows most of the golden rules of family firms. It slightly underperformed its three major competitors during the economic expansions of 1997–1999 and 2003–2007—but consistently outperformed them in periods of financial stress and crisis. Its leverage is lower: Debt accounts for 35% of its capitalization, versus an average of 47% among its competitors. Nestlé relies less on acquisitions: Annually, newly acquired businesses account for an average of 3.9% of its revenues, versus an average of 7.8% for its competitors. Nestlé is also the most diversified of the world’s four food giants, in terms of both geography (67% of its sales come from outside its home region, compared with 56% for its competitors) and product lines (which range from pet food to beverages, and from confectionary to pharmaceuticals).

Nestlé is not a unique example. Essilor, the world leader in optical lenses, is another nonfamily firm that mimics these behaviors. It has a culture of cost consciousness, maintains a very low level of debt, and has little staff turnover. Essilor is highly international—and has made many small acquisitions close to the core rather than pursuing big deals. Like Nestlé, it has weathered the recent downturn exceptionally well. In the United States, Johnson & Johnson isn’t a family-owned business, but it acts like one, with a low debt-to-equity ratio, a product line that allows its PR people to tout it as “the most diversified global health care company,” and a skepticism toward the large transformational mergers that other pharma players routinely attempt.

For years managers have been advised to “think like an owner.” The rules of family business show how to translate that thinking into actual strategies. What Nestlé and other nonfamily companies prove is that it’s possible to benefit from these rules regardless of ownership structure.

So how do family-run firms manage for resiliency? We’ve identified seven differences in their approach:

1: They’re frugal in good times and bad.

After years of studying family businesses, we believe it’s possible to identify one just by walking into the lobby of its headquarters. Unlike many multinationals, most of these firms don’t have luxurious offices. As the CEO at one global family-controlled commodity group told us, “The easiest money to earn is the money we haven’t spent.” While countless corporations use stock grants and options to turn managers into shareholders and minimize the classic principal-agent conflict, family firms seem imbued with the sense that the company’s money is the family’s money, and as a result they simply do a better job of keeping their expenses under control. If you examine company finances over the last economic cycle, you’ll see that family-run enterprises entered the recession with leaner cost structures, and consequently they were less likely to have to do major layoffs.

2: They keep the bar high for capital expenditures.

Family-controlled firms are especially judicious when it comes to capex. “We have a simple rule,” one owner-CEO at a family firm told us. “We do not spend more than we earn.” This sounds like simple good sense, but the reality is, you never hear those words uttered by corporate executives who are not owners. The owner-CEO added: “We make roughly €450 million of free cash flow every year, so we try to spend no more than €400 million per year, and we keep the balance for rainy days.”

At most family firms, capex investments have a double hurdle to clear: First a project must provide a good return on its own merits; then it’s judged against other potential projects, to keep spending under the company’s self-imposed limit. Because they’re more stringent, family businesses tend to invest only in very strong projects. So they miss some opportunities (hence their underperformance) during periods of expansion, but in times of crisis their exposure will be limited because they’ve avoided borderline projects that may turn into cash black holes.

3: They carry little debt.

In modern corporate finance a judicious amount of debt is considered a good thing because financial leverage maximizes value creation. Family-controlled firms, however, associate debt with fragility and risk. Debt means having less room to manoeuvre if a setback occurs—and it means being beholden to a nonfamily investor. The firms we studied were much less leveraged than the comparison group; from 2001 to 2009, debt accounted for 37% of their capital, on average, but for 47% of the nonfamily firms’ capital. As a result, the family-run companies didn’t need to make big sacrifices to meet financing demands during the recession. “People think we are rich and courageous,” one executive from a family firm told us, “but in fact we are cowardly—we leave most of the cash in the company to avoid giving away too much power to our banks.”

4: They acquire fewer (and smaller) companies.

Of all the plays a manager can make, a sparkly transformational acquisition may be the hardest to resist. It carries high risks but can pay large rewards. Many family businesses we studied eschewed these deals. They favored smaller acquisitions close to the core of their existing business or deals that involved simple geographic expansion. There were significant exceptions to this rule—when the family was convinced that its traditional sector faced structural change or disruption or when managers felt that not participating in industry consolidation might endanger the firm’s long-term survival. But generally, family companies aren’t energetic deal makers. On average, we found, they made acquisitions worth just 2% of revenues each year, while nonfamily businesses made acquisitions worth 3.7%—nearly twice as much. Family businesses prefer organic growth and will often pursue partnerships or joint ventures instead of acquisitions. As the HR director of a leading family-owned luxury goods company described it: “We don’t like big acquisitions—they represent too much integration risk, you may get the timing wrong and invest just before a downturn, and more importantly, you may alter the culture and fabric of the corporation.”

5: Many show a surprising level of diversification.

Plenty of family-controlled companies—such as Michelin and Walmart—remain focused on a core business. But despite a generation’s worth of financial wisdom that diversification is better done by individual investors than at a corporate level, we found a large number of family businesses—such as Cargill, Koch Industries, Tata, and LG—that were far more diversified than the average corporation. In our study 46% of family businesses were highly diversified, but only 20% of the comparison group were. Some family firms had expanded into new lines of business organically; others had acquired small entities in new fields and built on them. The CEOs we spoke with say that as recessions have become deeper and more frequent, diversification has become a key way to protect the family wealth. If one sector suffers a downturn, businesses in other sectors can generate funds that allow a company to invest for the future while its competitors are pulling back.

6: They are more international.

Family-controlled companies have been ambitious about their overseas expansion. They generate more sales abroad than other businesses do; on average 49% of their revenues come from outside their home region, versus 45% of revenues at nonfamily businesses. But family businesses usually achieve foreign growth organically or through small local acquisitions—without big cash outlays. And they are very patient once they enter a new market. “We accepted that we’d lose money in the U.S. for 20 years, but without this persistence we would not be the global leader today,” says one executive from a family-run global consumer products company.

7: They retain talent better than their competitors do.

Retention at the family-run businesses we studied was better, on average, than at the comparison companies; only 9% of the workforce (versus 11% at nonfamily firms) turned over annually.

The leaders of family companies extol the benefits of longer employee tenures: higher trust, familiarity with coworkers’ behaviors and decision making, a stronger culture. These businesses have a lot in common with what the academics Karlene Roberts and Karl Weick call “high-reliability organizations,” in which long-serving teams of specialists develop efficient team dynamics and a collective mind-set that helps them achieve goals. Says the CEO of one $10 billion diversified group: “We don’t have the smartest guys out there, but they know their job like nobody else, and when a problem hits they can act immediately as a team—one that has been there before.”

Interestingly, family businesses generally don’t rely on financial incentives to increase retention. Instead, they focus on creating a culture of commitment and purpose, avoiding layoffs during downturns, promoting from within, and investing in people. In our study we found that they spent far more on training: €885 a year per employee on average, versus an average of €336 at nonfamily firms.Examine these seven principles, and it becomes clear how coherent and synergistic they are: Adhering to one of them often makes it easier to follow the next. Frugality and low debt help reduce the need for layoffs, thus improving retention. International expansion provides a natural diversification of risks. Fewer acquisitions mean less debt. Money saved through frugality is invested wisely if the company keeps a high bar on capital expenditures. Instead of working in isolation, these principles reinforce one another nicely.

When we talk with executives at family-controlled firms, they speak derisively about competitors who “bet the farm” or “swing for the fences.” They talk about what keeps them up at night. Though they realize they are missing opportunities by being overly prudent, they hope to generate superior returns over time as business cycles turn from good to bad.

It’s evident that those cycles are speeding up. If that trend continues, the resilience-focused strategy of family-owned companies may become more attractive to all companies. In a global economy that seems to shift from crisis to crisis with alarming frequency, accepting a lower return in good times to ensure survival in bad times may be a trade-off that managers are thrilled to make.

Credit: Harvard Business Review.