In recent days, a major disruption in a longstanding and emblematic development agency has unsettled thousands, leaving projects in limbo and people adrift. The current turmoil at USAID will have profound impact in the developing world for the years to come. Yet, beyond the current confusion and chaos, one thing should become clear to leaders in developing countries: economic growth can’t depend on foreign aid. It has to come from within, through local leadership, entrepreneurial initiatives, and a clear vision for systemic change. This has always been true, but now, with the safety net abruptly removed, it has become painfully evident.
Entrepreneurship and Systemic Change
True progress and growth originate within communities, driven by individuals who understand their needs, have the vision and put the work in to transform their surroundings. Entrepreneurship has been the catalyst for progress and growth throughout history and across the world, driving economic activity, generating employment, and spurring innovation. Their success fuels a cycle of economic growth that can reduce dependency on external assistance and contribute to national stability.
Supporting entrepreneurs’ small and medium-sized enterprises (SMEs) is crucial to achieve this stability. Too often, entrepreneurs struggle to gain traction with their ideas because they lack key components of a functioning entrepreneurial ecosystem. Yet, when at least some pieces of the puzzle are in place, entrepreneurs use their ingenuity and resilience to fill the gaps. Given even a partial foundation, they innovate, collaborate, and adapt to create sustainable businesses that drive economic growth from within.
However, creating a functioning entrepreneurial ecosystem in developing countries, even if it is only partially functional, requires systemic change — fundamental shifts in policies, structures, and cultural attitudes that shape how economies function.
Achieving systemic change from within requires coordinated efforts at multiple levels—government policies that foster entrepreneurship, educational systems that equip individuals with the necessary skills, and business environments that encourage innovation. Local leaders and entrepreneurs must take an active role in shaping these structures, advocating for reforms that remove bureaucratic barriers and enhance market accessibility. Institutions within developing countries must work to establish legal frameworks that protect businesses, streamline regulatory processes, and facilitate access to funding mechanisms that support long-term economic growth.
That said, while change must be locally driven, external assistance—not traditional aid—remains essential. Programs and institutions that have a clear, long-term vision for fostering entrepreneurship can provide strategic support in the form of mentorship, investment, and infrastructure development. Unlike dependency-driven aid, this kind of assistance focuses on empowering local actors with the tools and knowledge they need to build self-sustaining economies. Efforts to promote systemic change have been made in countries like Honduras, but much more remains to be done. Systemic problems are not easy to solve and require persistence, consistency, experimentation, and a long-term vision.
Local leaders and entrepreneurs must take the lead in coordinating efforts to continue building resilient economic systems. They also must ensure that their values and goals are aligned with those providing support. Alignment with priorities and goals is fundamental for fostering long-lasting relationships, achieving systemic change, and driving economic growth that leads to stability. On their end, cooperation organizations should structure their support to complement these locally driven efforts, working with partners with whom they share objectives and a long-term vision.
