Great debate on scaling and institutionalizing the Igbo Apprenticeship Venture Capital System which I noted reduces inequality even though it makes it harder to build category-king winner-takes-all businesses. Yes, by constantly dividing your market share, and funding competitors, you may reduce inequality (a cultural desire) but you will never build global champions which work on absolute and complete market dominance where the trajectory is to own 100% of market share, if possible. That sharing principle is the heart of the success, and also the most deficient part of the Igbo Apprenticeship Venture Capital System within the context of modern free enterprise mechanisms.
Many have written and asked me why I noted in my Platform speech that the Igbo apprenticeship system is the best business framework in the world. Certainly, I did not have time to explain many elements of my hypothesis on stage.
Simply, under the Igbo apprenticeship system, you attain easily an efficient economic equilibrium where inequality is severely mitigated. Everything the world is complaining about inequality and the rich getting richer, the Igbo apprenticeship system handles optimally.
[Notice that I woke up to decide that going forward, I will write the Igbo Apprenticeship System as Igbo Apprenticeship Venture Capital System. That is a better description of what is happening therein. It is not just providing apprenticeship in skills; it is also giving capital, which is important].
The key point is that the VENTURE CAPITAL ecosystem which the Igbo apprenticeship system enables drives more people to accumulate capabilities and wealth, not just one individual, in a community. Largely, the master is running a venture capital fund and accelerator, transferring skills and capitals to young people. Those young people then emerge. You can reduce poverty within that construct but the master may not be a dominant capitalist locally or regionally.
Venture capital is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth.
For the modern form of capitalism, lack of capacity to grow big may affect the economies of scale, putting the players at the downstream side of markets. They will have lesser resources to fund innovation and advance the fixing of market frictions. A reform is needed in that space.
But in reality, this market is governed by a sharing principle. Every merchant, when you ask them, “How did you get started in global trade?” they say, “Well, when my master settled me.” And when I finally got it into my head to ask, “What is this ‘settling?’” it turns out that when you’ve done your apprenticeship with someone you work for, they are required — required — to set you up in business. That means paying your rent for two or three years and giving you a cash infusion so you can go out in the world and start trading. That’s locally generated venture capital. Right? And I can say with almost certainty that the Igbo apprenticeship system that governs Alaba International Market is the largest business incubator platform in the world.
Yes, that is why I want to see how it can be reformed to mirror the structure of FrieslandCampina (makers of Peak Milk – a Dutch cooperative-structured company) where many dairy farmers (in thousands) collectively own it, feed into the firm, and yet the firm is a global dairy powerhouse. Simply, there is an opportunity to have cooperatives within the Igbo apprenticeship venture capital system to help drive scale for innovating market efficiencies through scale.
A nice article. The Igbo Apprenticeship System is a unique and kind that deserves emulation. The advantages supersedes the demerits. What is needed is to institutionalised it with government/private sector participation for start-up capital. The use of local/PPP debt finance equity finance could be a profound achievement. The system had already removed/reduced hooliganism and joblessness in Igbo land. The critics without alternative solution to create jobs and wealth can misdirect the minds. Nigeria does not seem to be a country with perspective seeking ideas for its citizens hence hoping on them is a waste of time and energy. It may evoke sentiments that Nigeria is a branded a country without perspective, but this could be a story for another day. Precisely, regarding the Igbo Apprenticeship Scheme, I have the opinion that it should be improved and not discard nor apply the winner-takes-all businesses because the later can only create servitudes without end void of tapping hidden potentials by all-inclusive to wealth creation model.
The Igbo Apprenticeship System can be modified where necessary. The system to isn’t that bad as perceived by some quarters. Why do we even need to build the king winner-takes-all businesses? Looking at the reality on ground now? We should scale this one we have first and then when the need arises we’d cross that bridge. The real beauty I see in the system is that, it closes a wealth gap which is highly responsible for one of the challenges we face as a nation and in the world today. I would love to ask this, when will Nigeria and Africa at large begin to look inward for the answers she had to most of the problems it has with objectivity? We’d get it right someday. Thank you for sharing your thoughts always Prof. Ndubuisi Ekekwe