Research[1] shows family businesses contribute over 70% of global GDP. This means entrepreneurial families are one of the greatest forces for growth and positive change on the planet. At Babson’s Institute for Family Entrepreneurship, we are working with families to understand how they can create economic and social value, simultaneously. For a lot of entrepreneurial families, like the Zamora family, the value of their business is not only about economics, but also the long term social impact the business has on the community.
Rodrigo Zamora, a Babson College alumni and second generation in his family business LAFISE, put it this way, “Governments come and go, and they’re only in power for a few years before they change. It’s difficult for them to put resources into intangible, long-term commitments like education, because they won’t be able to see results quickly. The quality of education in a country is usually seen as the responsibility of the government, but the private sector, especially family businesses, are here to stay for the long haul and I’m convinced that we can and should do more to improve the quality of education.”
Founded in 1985, LAFISE is a financial services and industrial conglomerate with operations in 12 countries throughout Latin America and the Caribbean. Ten years ago, the family started the Zamora-Teran Foundation, with a goal to radically improve education for children in the region because they see that lack of education is at the root of almost all of the social and economic distress in their communities.
“57% of the children in Latin America cannot read a simple sentence at 10 years old. We decided to help kids improve their literacy skills. We have introduced innovation labs, robotics, programming, literacy and mathematics, and have reached over 70,000 underprivileged children in Latin America,” explained Diego Zamora, the youngest sibling in the second generation. In 2009, the Zamora Teran Foundation began implementing the One Laptop Per Child program and has since become a global reference for introducing technology and connectivity in primary-grade public schools in developing countries.
During the Covid-19 pandemic, the family found new opportunities to help even more children than they could before.
“160 million students in Latin America are at home right now. The crisis has caused us to think bigger and with a greater sense of urgency. With remote learning being an immediate need, we see this as an opportunity to help improve the education of even more children and with better quality control,” added Marcela Zamora, the oldest sibling in the second generation.
For the Zamora’s, the pledge to effect social change is not only skin-deep, but it is a long-term commitment both for their family as well as their business. “We measure results for social responsibility as part of our Board meetings. We believe having such measurements are essential to always look for improvements,” said Roberto Zamora, another sibling.
In addition to helping children, the Zamora family sees their responsibility as extending to taking proactive actions to reactivate the economy in these desperate times. Rodrigo noted that in some areas in the region, over 40% of people have incomes of less than $2.00 per day, and that the social problems that exist in our communities are an urgent matter that needs to be addressed in a consistent and coherent manner by all sectors including governments, civil society, and private sector. He explained, “The one question we keep asking ourselves is how we, in the private sector, can do things differently to help contain an ever-growing social problem. Apart from our continuous commitment in education, as a financial group we feel that right now the financial system is going to play an important role ing re-activating these economies. At LAFISE, we are willing and ready to work together with multilateral organizations, international finance institutions, and local agencies in order to have a proactive role in this regard.”
LAFISE is rapidly deploying a fintech mentality to inject liquidity in the economy. In one example, they have created a digital platform in collaboration with large enterprises to release money tied up in the supply chain. In another example, LAFISE has created a phone app that allows people who work outside their home country and typically send critical funds home to their families through regular visits to a physical bank location to now do this fully electronically.
Rather than just advocating policy for change and relying on government aid to address the crisis, the Zamora family is setting an example for how enterprising families can use entrepreneurship to create pathways for people to generate economic prosperity and help their families and their communities.
Published by Lori Union on LinkedIn
[1][1] According to a Family Firm Institute research, 70-90% of global GDP comes from family businesses.
