Agree these are market systems challenges. My contention is that the most effective way to shift those systems in low-income country settings is bottom-up, through pioneer firm building. Firms that employ people, pay taxes, and generate hard currency earnings have a seat at the political-economy table that external thinktanks and advocates structurally do not.

Philanthropic capital in this context should not be thought of as purely grants, but rather as highly patient and risk-tolerant investment funding that is comfortable incurring losses with pioneer firms in order to demonstrate new commercially viable industries that second-movers can then enter.

The African Continental Free Trade Area (AfCFTA) aims to create the proper common market with free mobility for people across the 55 African Union nations. Despite being signed by the vast majority of countries back in 2018, implementation has been extremely slow, in my view largely because political elites beholden to domestic business interests lack the ambition to bring it into existence. A functioning intra-African common market would also be complementary to, rather than a substitute for, building export industries that serve high-income countries. Given how high the upside is, I think it is worth investigating whether tractable advocacy approaches could meaningfully increase the probability of effective AfCFTA implementation.

There are African markets where long-distance inland transport costs significantly raise the cost of business and shrink the opportunity set. But in most markets this is not the binding constraint. I would not prioritize transport innovation when there are tractable opportunities inside existing export-focused business models.

Thanks for sharing, great read! The demand-side focus with named, identifiable buyers is exactly right. The problema vs problemática framing is also very useful: ecosystem-level change tends to follow from specific business transactions getting solved, not the other way around.

Thanks Toby.

My view on the three things outsiders are unusually well-placed to bring, roughly in order of how hard they are to substitute: 1) the ability to cultivate buyer demand in high-income markets, 2) the organizational norms required to run a firm at scale (hiring systems, quality control, non-kin trust, delegation), 3) access to patient risk capital.

The overall answer to "why don't locals just do this" is that these binding constraints are the things hardest to acquire from inside a low-productivity equilibrium. International buyer relationships and systems-building norms are both learned by doing. Effective pioneer firms should eventually function as transfer nodes where workers and managers carry the practices outward. Bangladesh's garment industry is the textbook case where a handful of Bangladeshis who previously worked at Korean garment company Daewoo seeded most of the early firms.

To answer your second question, local capacity development over time indeed becomes most of the focus. But in the earliest phase, when no domestic firm has yet demonstrated the model, the bottleneck is having any firm operating at international productivity standards at all. Outsiders (including diaspora, who often have the best of both sides) are over-represented at that stage because they have lower-cost access to the specific scarce inputs.

Thanks for the  very thorough write up! Excited to support Healthier Hen's launch into Kenya.