The New Idea

In Peru where most workers operate in the informal sector and where economic power continues to accrue to a few national and multinational businesses, Juan Infante has designed and launched an urban revitalization effort to revitalize the Gamarra, one of Lima's oldest small business districts. Instead of adopting a protectionist stance and trying to isolate the district from outside influences, Juan works to convince both the government and the business community that they should seek advanced training and make investments that will increase productivity and improve their marketing.

Through the Gamarra revitalization effort, he has established on-the-job training for employees and helped connect entrepreneurs with major textile exporters. Working with local business leaders, Juan has developed direct access to top government ministers and established links to Peru's largest industrial association. Today, the Gamarra is an important producer of garments. It has also become a vibrant cultural center, attracting major art exhibits and musical talent, and is one of Lima's primary fashion spots. In July 1999 alone, one million people visited the Gamarra.

The Problem

Peru's economic transformation of the past decade–based on the neo-liberal development model adopted by many Latin American countries–has brought soaring annual growth rates but has also left many small and medium-sized businesses unprepared for the increasingly competitive global marketplace. Most of Peru's entrepreneurs, small business owners, and workers operate in the highly fragmented informal sector, which receives little or no assistance from government agencies.

The Gamarra can be seen as a representative sample of the changes that the Peruvian economy is undergoing. The business district is almost thirty years old and has been a magnet for migrants, who come with few resources to fulfill their dreams. Starting with makeshift stalls, over the years these entrepreneurs have built small shops and even niche export-import businesses. The Gamarra business district represents 60 percent of Peru's textile market; fourteen thousand small businesses employ more than sixty thousand people. To sustain and strengthen this rich tradition of small businesses, the entrepreneurs need coordinated efforts from government and large businesses to help them adapt and survive in the global economy.

The Strategy

Juan began by gaining the trust of entrepreneurs and publishing the Gamarra Revista, a monthly magazine dedicated to small-business development in Peru. The magazine served both as a forum to disseminate training and best practices, and as a tool to pressure local and national politicians to bring government resources to bear in the district. Juan and his organization, Innovaciones Gamarra, led a year's strikes and marches to pressure the government to make good on its promises of investments in the Gamarra. In three years, the area went from a dangerous, garbage-strewn section of Lima to a safe, brightly lit, colorful shopping district. The Gamarra's streets have been repaved, and federal tax and export-promotion agency offices have opened. Realizing that attracting new investment and clientele to the district required more than clean shops and safe streets, Juan produced a series of cultural events featuring the hippest new artists and musicians to help launch the district's reopening.

Juan has established himself as a small-business expert through media appearances and speaking engagements, a weekly program in Radio Programas del Perú, the most listened to station in Peru, and articles published in various newspapers. He plans to capitalize on his recognition to secure government commitments for additional resources to stimulate small-business development. He wants to publicize the Gamarra experience in a book or series of articles, and hopes to develop case studies as models for other business districts. In addition to the textile industry, he believes that agriculture, tourism, and construction are ripe for development. He will keep building bridges to local and national government agencies, as well as to large businesses that can benefit from small and medium-sized enterprises as suppliers and distributors of their products.

Juan dreams of one day starting the first Latin American institute dedicated to the promotion and growth of small and medium-sized enterprises. He believes that his model–part organizing, part political pressure, part capacity building, and part public relations–can help change the economic future of Peru and much of Latin America.

The Person

While studying sociology at university, Juan traveled throughout Peru and worked as a volunteer in low-income communities, where he trained entrepreneurs and helped them to organize more efficiently. His travels enabled him to see how woefully unprepared and unskilled small-business entrepreneurs are in Peru and how little opportunity they have to obtain training and information. After several years as a consultant for a citizen organization training entrepreneurs, Juan realized that most leaders in general and this organization in particular were uninterested in developing strategies to address the plight of small businesses in the poorest districts of Lima. He set off on his own to start the Gamarra Revista and the district's revitalization effort. In May 1999, Juan was one of only three Peruvians recognized as "Latin American Leaders for the New Millennium" by Time magazine.