Excerpts from a paper: “Old Socks for Start-Ups: How Second-Hand Clothes Markets Exemplify Undervalued Entrepreneurship in Poorer Nations and Consumption-Dependent Growth.” The paper discusses the promise of entrepreneurship, the ambition of entrepreneurs throughout the globe, and the reality of the global second-hand clothes trade.
When I was in Tanzania leading a study-abroad program, a lot of things fascinated me about the culture, people, demographics, and landscape. But nothing intrigued me more than the Second-Hand Clothes (SHC) markets, otherwise known in East Africa as Mitumba markets. In short, the used clothes that North Americans and Europeans donate to Goodwill, the Salvation Army, or Humana go through a rigorous sorting and grading process across 6 continents, until some subset of the original donations end up in lesser-industrialized countries. Here, they are sold off in bundles, shipped to cities and rural markets alike, and sold individually to buyers seeking higher-quality clothes at less expensive prices. The sight of a group of people sorting through a pile of used clothes in a busy market is fascinating to the core.
I was so intrigued by this phenomenon that, upon returning to the U.S., I began looking into this trade. Initially, I thought it might be some Western-derived contraption to push junk off onto the global citizenry in the name of profiteering and economic efficiency. After looking into it, a large body of research seemed to argue that this was beneficial to citizens in Sub-Saharan Africa, Asia, and even Japan for both economic and sociological reasons. In the end, however, I became dismayed. It was not because of some fear of domination by Western culture or an economic paradigm forced upon poor nations by the global monetary regimes. Instead, I became dismayed because the research showed that so many thought this was a tremendous way for entrepreneurs in poorer countries to gain access to an income-generating product at a low cost. While this may be true, it seriously undersells the ambition and capabilities of citizens in these countries. In my travels in East Africa and many other places, I have been overly impressed with the drive and ideas of the people I meet, as I was often asked to make a small contribution, as well. Hustle or not, they are entrepreneurs at heart, fueled by a potent combination of necessity and laissez-faire drive.
No matter the cause, by the end of my fieldwork in Tanzania, I was convinced to the core that the entrepreneurial capabilities of much of the world’s population are under-appreciated and straight out ignored. Moreover, past international development efforts, or heralded markets such as the second-hand clothes trade, do not represent their true potential. In any case, I was motivated to research and write the attached issue paper, which we are releasing now.