Growing the Wealth of the Poor - World Resources Institute

3. CONNECTIONCONNECTING RURAL ENTERPRISES:NETWORKS AND ASSOCIATIONSConnection: Links to Learning,Support, and CommercialNetworks and AssociationsOWNERSHIPCAPACITYCONNECTIONHorizontal links to other ruralproducers to gain access toinformation, improve efficiency,and connect to marketsVertical links to government andthe private sector to build politicalsupport, deal with bureaucraticobstacles, and connect to technicaland financial supportTHIS SECTION: CONNECTIONIn this section, we explore the formal and informal networks and associationsthat ecosystem-based enterprises must rely on to gain information,connect to markets and technology, and organize themselves for politicalinfluence. Such networks are part of the essential architecture of scalingup, providing the means for local organizations to share experiences,expand their skills and influence beyond their usual sphere, and sustainthemselves in a globalized world. This section:■ Defines networks and associations and their role in helping ruralenterprises to learn and grow, particularly with relation to the poor.■ Examines the role of formal associations such as cooperatives andconsortia in helping small rural enterprises pool resources andachieve economies of scale.CAPACITY■ Looks at the importance of learning networks that facilitate informalinformation exchange and foster group learning.WHAT ARE NETWORKS AND ASSOCIATIONS?Networks are dynamic and lasting connections among individuals,groups, and enterprises—a form of structured social capital. They canbe informal like learning networks or support groups or can be moreformalized, with rules and written charters, such as cooperatives,unions, trade groups, or federations. These more formalized networks wecall associations.■ Describes the power of federations to magnify the voice of smallproducers and engage policymakers.■ Discusses the difficulty of starting and maintaining associations andfederations and the problems of keeping them accessible to the poorand free of government manipulation.If they are to prosper—or even survive—rural enterprises mustbe connected to learning, support, and commercial networks.Such networks help compensate for the isolation and lack ofmarket power that rural businesses typically suffer, and they helplink the diverse array of local organizations to achieve commongoals (Best et al. 2005:21–22). As mentioned in the last section,linkages and networks are principal tools in sustaining and scalingup nature-based businesses. Networks link rural producers ininformation exchanges, in cooperative production and marketingefforts, in product and process research, in financing schemes,and in efforts to achieve political influence.Networks also help build and extend social capital, creating“institutional spaces” in which the poor can interact and liaise withother groups. They help legitimize and strengthen informal institutionssuch as savings groups or women’s groups, allowing themto institutionalize their processes, solidify their contacts, and thusenter the mainstream of recognized organizations.There are many kinds of networks. Some, like learningnetworks, are informal and often amorphous. Others are morestructured and take the form of cooperatives, trade groups,producer organizations, unions, enterprise networks, and federations.Here we will refer to these structured organizations generallyas associations. Such associations often have written charters orrules and many—but not all—are legally recognized entities.Associations are essentially networks that have been institutionalizedto pursue specific kinds of collective action.The Power of AssociationAssociations help small enterprises do collectively what they areunable to accomplish alone. Although the spectrum of theirinterests is wide, their activities tend to fall into a limited numberof categories. These include: creating opportunities to invest inlocal production; reducing the influence of go-betweens oragents; extending market reach; improving access to credit; facilitatinglearning networks; and building new opportunities toengage the political process.95