In February of 2015, a group of Lake Forest Graduate School of Management students traveled to Bogotá, Colombia as part of a program aimed at instilling global mindsets and enriching global competencies. The students partnered with local, multi-national businesses to analyze a current challenge, worked with local resources to develop a solution, and finally, proposed and documented a workable solution. The result of that process is this white paper, which outlines the proposal for building and strengthening social entrepreneurship in Colombia that became the foundation for GHEO.
Value of the Experience
In addition to gaining perspective on the culture, business environment, political stability, and investment potential of Colombia, one of the most valuable lessons gained from the experience was a deep understanding of the Colombian government’s efforts to achieve shared prosperity and social equality. As a result, our unique social entrepreneurship program is designed to take advantage of the current business-friendly environment and tax structure, and to work hand-in-hand with an ecosystem of partners on the ground to increase the likelihood of a successful result.
World Bank data indicates that as of 2013, over 10% of Colombia’s population was in extreme poverty and another 35% was considered poor1. Studies suggest that the problem is likely attributable to high inequality in the country’s educational system.
- Only 37.2% of young Colombians continue their studies beyond high school
- A Colombian with a bachelor’s degree earns about 3.5 times more than one with only a high school diploma
- Approximately 17% of young Colombians are unemployed
- A Colombian with a Masters degree earns eight times more than one without2
But this democratic republic also has reasons to believe in a better future, including peace talks aimed at minimizing regional violence, and planned infrastructure investments of $26Bn over the next four years. Business-friendly economic policies, such as duty-free imports of raw materials, no VAT, free-trade zones and a relatively low income tax, have attracted many national firms, including over 200 U.S. companies that currently operate in Colombia.
What’s more, the younger population of Colombia displays a passion and energy for a better, more peaceful future. This cohort is fueling the growth of the middle class, which is expected to reach 46% of the population by 2025. At the start of 2015 the Colombian government launched a program of awarding scholarships to talented students from extremely impoverished areas. Some key statistics from the program are:
- In 2015, 9,676 students won scholarships
- Currently $65M USD is allocated for the program
- The Colombian government’s goal is to offer 40,000 scholarships by 2018
- To qualify, students must be from poor backgrounds and attain high scores on the national exam. The scholarship is worth $142,863 in USD per student3
The catch: If the student drops out, the tuition defaults to a government loan with interest. While the program is a great start, the tuition default clause including other social and financial challenges represent significant hurdles that keep students from achieving a higher education and fulfilling their potential.
By augmenting the existing government scholarship program, we can fill the gaps and help ensure students from poor rural areas of Colombia acquire the skills they need to succeed.
A Holistic Program for Success
We aim to offer a broad suite of targeted services offered over the long term to build sustainable equity for Colombian families and the economy. Our unique platform focuses on three areas that build on one another to effect maximum positive impact:
- English Tutoring
- Business Mentoring
- Global Corporate Internships
The GHEO program will use higher education to produce more global, corporate-ready talent that will drive more young Colombians to the middle class and create more mentors for generations that follow. Our recommendation will be evaluated in a potential pilot program, which includes providing services, programs and funding for seven Political Science students in the scholarship program at Pontificia Universidad Javeriana in Bogotá.
Our current estimate of total cost for the program is still being evaluated, but the support will go directly to the students for textbooks, transportation, and meals.4 The fundraising efforts will be generated around US corporations among other sources of funding that have a vested stake in Colombia.
The pilot program is strategically focused on one university and one department. It will be measured on a semester and yearly basis leading up to the student’s graduation in 2019. We are targeting the program launch for 2016, giving us ample time to handle all the logistics. Finally, our program will be closely linked to the government priorities of the Ministry of Education.
 Colombia Policy Notes, The World Bank. Pg. XXXVII
2 Javeriana Cost Analysis
3 Colombia’s Goal: More Success in Higher Education, More Opportunities for Youth, World Bank, Jan. 24th, 2013
4 Pontifica Universidad Javeriana Cost Analysis