MIT LIFT Lab
Lifting the Lives of the Bottom Billion
The MIT Low Income Firms Transformation (LIFT) Lab, led by Dr. Josué C. Velázquez Martínez from the MIT Center for Transportation and Logistics, is a research lab founded in 2022 with the goal of alleviating poverty in developing countries and LIFTing the lives of the bottom billion.
We provide low-income and vulnerable populations with opportunities for growth via supporting the survival of micro and small enterprises (MSEs) through applied research, enhancing their supply chain management (SCM) capabilities.
The MIT LIFT Lab grew out of the MIT GeneSys project, which began in 2016 with the aim of contributing to small business growth specifically in developing countries.
“Micro-firms often get the worst purchasing deals. Owners without credit cards and with limited cash often buy in smaller amounts at much higher prices.”
– Josué Velázquez Martínez, MIT LIFT Lab Director | MIT News
In this new phase, we prioritize supporting Latin American and Caribbean micro-retailers and micro-restaurants (also known as nanostores) by enhancing their supply chain management, business skills, and addressing technology adoption challenges for digitalization in the region.
Companies with fewer than 10 employees worldwide
Employees in Latin America and the Caribbean working in MSEs
Mortality rate of MSEs within the first 5 years of establishment
In developing regions, Micro and Small Enterprises (MSEs) are a crucial component of the economy. MSEs are the source of income to millions of families and the source of goods and services to the bottom billion. In Latin America and the Caribbean, MSEs represent 99% of the companies, contributing to 47% of the employment in the region (ECLAC, 2020).
However, MSEs struggle to survive. The mortality rate of MSEs in developing countries is estimated to be over 30% annually during their first five years of operations (McKenzie, D., & Paffhausen, A., 2018). This is mainly explained by their productivity gap with respect to larger firms. For example, large Mexican companies have exhibited significant productivity growth (almost 6%) while the productivity of micro, small, and medium sized companies have decreased almost 7% annually (Remes, J. ,2014).
Moreover, since the outbreak of the COVID-19 pandemic, the economic damage continues to mount across all countries, with a severe impact in Latin America and the Caribbean. It is estimated that the economic crisis derived from the pandemic has affected more than 60% of the MSEs across the globe, causing the definite closure of ~2.7 million MSEs in Latin America (CEPAL, 2021).
Therefore, the primary goal at MIT LIFT Lab is to contribute to the survival and growth of Micro and Small Enterprises (MSEs) by improving their supply chain management (SCM) capabilities.
Our Research Approach
Our research employs a combination of descriptive and inferential statistical analysis, along with standard methods and advanced machine learning techniques. These initiatives are based on empirical research that utilizes real data obtained from nanostores, including large-scale analyses and field interventions. To ensure the quality and impact of our analysis, we rely on primary data collected through immersion, shadowing, and observation. This approach significantly enhances the validity of our findings.
Our objective is therefore to develop a comprehensive model-based theory that is firmly grounded in both the data and the context of the communities we work with. This enables us to generate insights that can be applied in the future, even as conditions evolve and change.
The MIT LIFT Lab extends across ten countries in Latin America. We have strengthened our collaboration with 20+ partner universities in Mexico, Guatemala, Colombia, Ecuador, Peru, Chile, Brazil, Uruguay, Bolivia, and Argentina.
Each year, hundreds of students, faculty members, and research collaborators collect primary data on the field and provide practical recommendations to the MSEs based on our methodology.