Billions (The new capital)
Capital; is the engine that powers the market economy .The principal part of the economic whole.
For Adam Smith economic specialisation - the division of Labour and the subsequent exchange of products in the market — was the source of increasing productivity and therefore the wealth of nations . Famously defined as “the stock of assets accumulated for productive purposes.
For accumulated assets to become active capital and put additional production in motion they must be fixed and realised in some particular subject “which lasts for some time at least after that labour is past.
The French economist Jean Babtiste Say, believed that capital is always immaterial by nature since it is not matter which make capital but the value of that matter, value has nothing corporeal about it.
Herein lies the Dichotomy between rich and poor the difference between apple the most valuable company in the world and the Congo the richest country in the world in terms of mineral resources.
In the 21st century the value of a company lies to a great deal on the ideas behind it Google has famously and successfully demonstrated this with its “don’t be evil” motto, Facebook gave us “move fast break things” both companies were able to attract and motivate the most valuable form of capital human capital by invoking this culture in their employees they were able to build great things and amass and incredible amount of value.
Other forms of capital available include social capital Thomas Sander defines it as “the collective value of all social networks (who people know), and the inclinations that arise from these networks to do things for each other (norms of reciprocity).”
Cultural capital is a term developed and popularised by late-twentieth-century French sociologist Pierre Bourdieu. …Cultural capital is the accumulation of knowledge, behaviours, and skills that one can tap into to demonstrate one’s cultural competence.
The ability to fix these human and surreal value is best demonstrated by the creation of a company with fixed assets land, trademarks, patents, stocks. Which fulfil the eighteenth century requirements of the definition of capital while allowing the twenty-first century idea to rise unfettered and fulfil its potentials as a harbinger of change to society.
The ability to articulate an idea clearly is the real value of a modern day CEO it’s the reason while airbnb is more valuable than the Hilton group and Uber more valuable than Ford motors
African companies are for a large part still stuck in an outdated sense of what a company is our stock markets are filled with companies typical of a 19th century platform at a time when due to our exploding population we need 21st century companies able to scale fast and affect the life's of billions.
In Nigeria the FMDQ OTC Securities Exchange platform meant to deal with small to medium cap companies has a minimum share capital requirement of N500million for a nation with a minimum wage of N17,000 /month this is obviously a problem . At the bottom of this pyramid you have the esusu or ajo social groups used traditionally by traders to extract social capital where groups come together to raise capital through monthly contributions a layer of technology has been added to this by the banks such as Diamond banks esusu account and Access banks ajo account . Crowd funding is banned in Nigeria and private equity / angel investors do not exist at a level to access genuinely small to medium cap companies the parameters and information required for due diligence can be opaque in this system, the cost of compliance prohibitive.
Entrepreneurs who wish to bootstrap their way to success in Africa would have to think out of the box they have to develop their own capital outside normal constructs and develop new ways to fix this capital.
Investors in time will attune their ears to hearing the entrepreneurial sirens the best and the brightest companies this days are driven by culture and purpose and are not tied to fixed assets.
To unleash its potential and empower a generation Africa with its disenfranchised population who have been robbed by the colonial governments of their minerals and land, traditional stores of capital. And have had this robbery enshrined by present day governments through laws like the 1978 Land use act in Nigeria. Africa will have to develop a new way to rapidly capitalise companies allowing those who would seek to change the life’s of billions access to the capital to do so, and in so doing create our billionaire class of capitalists.
“The best way to predict the future is to create it”. Abraham Lincoln
PoPbeachclub is a social enterprise interested in networking mentoring and entrepreneurship we tackle everyday problems in education and plastic by leveraging on our fixed assets and human capital to find novel solutions to capital creation.