The phrase "marketplace literacy" refers to the skills, self-confidence, and awareness of rights that both entrepreneurs and consumers need to be competent in in a business setting. It's also the name of a program designed to provide those skills. The idea of providing training in marketplace literacy started in subsistence contexts in urban and rural South India. The rationale is simple: such literacy, along with access to markets and financial resources, can enable impoverished individuals to participate effectively in the marketplace.
Marketplace literacy itself can be viewed at three levels: the concrete level of vocational skills or a trade, the more abstract level of business know-how, and the level of understanding, or "know-why," about the marketplace. For instance, suppose a poor woman who knows how to cook (a vocational skill) starts a food shop. To run the business, she needs know-how — specifically, she needs to know how to set the menu and prices, choose a location, and promote her business. She also needs "know-why" — to understand why it's important to be customer oriented, why to choose one location and not some other, and, ultimately, why to go into this business and not something else.
Marketplace literacy education was developed to address a gap in available programs that focus on concrete vocational skills and, to a lesser extent, know-how, but leave participants ignorant about the basic nature of how the marketplace works. The program was designed for individuals who cannot read or write, but who possess social skills and oral native language skills. Using picture sortings and role-playing, the training provides a basic understanding of business exchanges, value chains, and the marketplace. It emphasizes consumption and entrepreneurship as two sides of the same coin, helping participants to know how to gauge value as consumers and how to deliver value as entrepreneurs. What started off as a face-to-face program is now being scaled up, using video-based approaches; the plan is to use it broadly in two South Indian states.
Would it be possible to tailor a program like this to the different institutional and individual circumstances of the United States, and by doing so accelerate the growth of micro-entrepreneurship during these difficult economic times? If so, it would be another example — likemicro-finance — of reverse innovation. It's worth thinking about how poor Americans could be empowered to experiment in the marketplace and create new opportunities, perhaps beyond what we can currently envision, in such arenas as energy conservation through retrofitting and urban gardening. Developing know-why through marketplace literacy may be what's needed to enable would-be micro-entrepreneurs to realize their creative potential and revitalize their communities.
Such reverse innovation would need to overcome plenty of pitfalls. In South India, where poverty is extreme, many people are network-rich but resource-poor. Near-constant one-to-one interactions provide a natural training ground for learning about the marketplace, gauging products, counting out money in transactions, and running small enterprises to survive. By contrast, low-income individuals in the United States often confront large chain stores, impersonal transactions, technology that computes for them, and product labels and store information that assume a certain level of numerical sophistication and marketplace literacy.
Thus, social networks might need to be created for marketplace literacy to develop. And, of course, enabling marketplace literacy will require understanding nuanced differences in poverty — in urban versus rural settings, in advanced versus transitional economies. But the potential offered by this kind of program demonstrates once again that we can learn from the most unlikely of places.