Ahead of an "unConference" on entrepreneurship hosted by Israel's the Technion, Global Network Perspectives spoke with faculty at several network schools about entrepreneurship in their countries and what it means to be an entrepreneur in a globalized society.
Updated September 9, 2016
India
Suresh Bhagavatula, chairperson, Entrepreneurial Ecosystem Development, NSRCEL, Indian Institute of Management Bangalore
How important a force is entrepreneurship in your country and what do you consider to be its primary driver?
Two of the significant outcomes of a vibrant entrepreneurial ecosystem is job and wealth creation. India requires both of these. According to Global Entrepreneurship Monitor (GEM) report, India has very high incidence of necessity based entrepreneurship compared to opportunity based entrepreneurship. However, this is changing rapidly, with cities like Bangalore, Delhi and Hyderabad becoming startup hubs, many youngsters are starting their own ventures. While it is important to have new startups be set up, it is more important for startups to have good teams.
What aspects of politics and culture in your country make it relatively easy or hard for entrepreneurs to start a business?
By nature, Indian do seem to be predisposed to entrepreneurship however, the laws related to starting and managing a venture are quite harsh. The current government has made startups a focus of its activities and is setting aside large pool of resources to enhance entrepreneurship and is also trying to make the laws easy to start and close companies. While we have seen companies raise money and scale to become unicorns, what we are yet to see are good exits.
How can the training of entrepreneurs benefit from international cross-collaboration, and what do you think your region can offer other schools across the Network?
It is extremely important to learn from other countries. In a globalized world, learnings are becoming portable across boundaries, success stories from one region can inspire startups from other regions. We here at IIMB have been working towards making our entrepreneurship syllabus very contemporary by using methods such as effectuation, lean, etc. We also can offer insights from an emerging economy that is keen on nurturing startups and create an enabling ecosystem.
United States
Kyle Jensen, Associate Dean and Shanna and Eric Bass ’05 Director of Entrepreneurship and Senior Lecturer, Yale School of Management
How important a force is entrepreneurship in your country and what do you consider to be its primary driver?
Entrepreneurship is, of course, important to the economy of the US in the sense that high growth companies are responsible for much of our net job growth. It is also important, individually, to our students, not one of whom would say that wish to be less entrepreneurial. They all want to be entrepreneurial, if not entrepreneurs. They might go into consulting, or finance, or public service---and they can be entrepreneurial in all of those endeavors.
What aspects of politics and culture in your country make it relatively easy or hard for entrepreneurs to start a business?
I think it is easy to become an entrepreneur in the US. And, many students are interested in doing so. If anything, we must discourage students---we must help those for whom entrepreneurship is not a wise choice discover that fact, knowing they might be ready later in life.
How can the training of entrepreneurs benefit from international cross-collaboration, and what do you think your region can offer other schools across the Network?
Our students can benefit enormously from the perspectives of entrepreneurs in the Global Network for Advanced Management. Many of our students come from abroad, many will go abroad, and it behooves them to understand the customers, strategies, markets, and regulations to be found internationally. Also, selfishly, the network benefits faculty like me because we get to see how others teach entrepreneurship and support the aspirations of their students.
Costa Rica
Ryan Schill, professor of marketing and entrepreneurship, INCAE Business School
How important a force is entrepreneurship in your country and what do you consider to be its primary driver?
Entrepreneurship and small business are important to Latin America. They constitute the major force of employment in many of the Latin American economies. Sixty percent of Latin American employees work for a business with five or less employees. We will see a lot of unique Latin American entrepreneurs who are on the rise with global technology businesses – especially since more funding and resources are being invested in the region. The problem in Latin American is that many firms start small and tend to stay small which harms our global competitiveness and otherwise slows our growth regionally.
Latin America has a very strong entrepreneurial mindset but it is also very much in a transition phase, preparing to create scalable and larger companies. Importantly, we have the mindset and over half the population considers entrepreneurship as a great career choice and personally I see a quarter of our MBA students (who represent many Latin American countries) who intend to start their own businesses. Another interesting fact is many Latin American countries have more entrepreneurs of necessity per capital than any other part of world according to Global Entrepreneur reports. Entrepreneurship is strong in the Latin American economy due to the fact that for many, it is seemingly their only option due to job scarcity.
What aspects of politics and culture in your country make it relatively easy or hard for entrepreneurs to start a business?
Many Latin American entrepreneurs work in what is classified as an informal economy. Informal economies are not just in Latin America but an economic culture, reality and environment of most of the world’s population. Generally, in informal markets governments do not have formal policies towards entrepreneurial activity and if they do, they usually get in the way of entrepreneurs or regulations hurt small business and startups. With government policy antiquated and not keeping pace, the informal economy thrives as systems of trade and exchange outside many of the state controlled money transactions – a place were money generated is usually not recorded or taxed.
This is sometimes viewed as a grey economy or an area unavailable for inclusion for country GDP computations. For some entrepreneurs, this could be seen as problematic - or to some, it may be seen as opportunistic by having access to the ultimate free market with low to no permits and nothing really official. This type of entrepreneurial culture can attract or dissuade some would be entrepreneurs. Many in formal economies such as in the US or EU would see this as illegal, but in Latin America there are varying shades and it is a legitimate reality for entrepreneurs to survive.
The good thing about the Latin American entrepreneurial environment is that there are a lot of opportunities in a growing market. With a growing middle class there is a market for everything and for everyone. If a business is disciplined, honest, kind, punctual to their clients and providers, entrepreneurial success is high - even in the informal Latin American economy.
How can the training of entrepreneurs benefit from international cross-collaboration, and what do you think your region can offer other schools across the Network?
The real beauty of entrepreneurship as a diverse international topic is that it has a common core and uniting force in that everyone working in it deals with a lot of uncertainty - no matter your economic environment or entrepreneurial ecosystem.
With the world ever smaller due to technology and with travel between becoming countries easier, we will do business in different cultural contexts at some point. The mark of a well-rounded and informed entrepreneur is reflected in his or her inclusive behavior within the global community. The true goal is not only being able to tolerate the differences of others but to know how to make a more productive entrepreneurial community. My dream is a truly global entrepreneurial ecosystem.
As a professor of entrepreneurship based in Latin America with access to some of the best Latin American minds, it would be a crime for me to only approach my precious classroom time by strictly adhering to a US centric method while teaching entrepreneurship in Latin America. Believe me, it would be much easier for my teaching prep if I could use all of the vast US cases and material patterned in the familiar start-up style and for formal economies. We have to constantly create materials and cannot entirely follow the standardized US-centric textbook approach to entrepreneurial educational success and progression. Honestly, teaching entrepreneurship tailored to the vast differences and nuances of Latin American markets is a major challenge, but it is well worth being at the coalface of this effort.
Mexico
José Ernesto Amorós, Professor in the ENTREPRENEURSHIP AND LEADERSHIP RESEARCH GROUP, EGADE Business School
How important a force is entrepreneurship in your country and what do you consider to be its primary driver?
Latin America and the Caribbean, along with Sub-Saharan Africa, have the highest rates of people involved in creating a new business, according to the Global Entrepreneurship Monitor (GEM) project. In its 2015 report, Mexico has a 21% rate of first-stage entrepreneurial activity, an indicator that measures the ratio of the adult population involved directly in the creation of a new business in the last 3.5 years. In other words one in every five Mexicans adults is consider an early-satge entrpreneur. This indicator has also grown in recent years, above the regional average.
However, not all of this “entrepreneurship activity” has or has had a direct impact on the country’s development. Even though there is a growing dynamism in the absolute number of new businesses created in Latin America, they have had very little impact on the economic growth of countries, due to their low level of innovation. The primary driver in the regional entrepreneurship activity should move from a self-employment, low value-added pattern to a high-growth transformational one.
What aspects of politics and culture in your country make it relatively easy or hard for entrepreneurs to start a business?
Two countries in Latin America stand out for their innovation and entrepreneurship indicators: Chile and Colombia. These countries have developed pro-entrepreneurial programs and policies that navigate the so-called “middle-situation trap,” which means that in an environment with poor institutional quality and less competitiveness, there is a high number of entrepreneurs, but they are not very innovative and create little employment. This could be the case in Mexico.
To free itself from the “middle-situation trap,” Mexico needs better policies and programs that balance the number of businesspeople, their ability to innovate, and their growth ambition. Innovative entrepreneurship, which includes greater technology development and its use, or disruptive business models (or a combination of the two) are more likely to succeed. So, the challenge is to transform this high number of entrepreneurs into more productive, innovative and growth-oriented new firms.
How can the training of entrepreneurs benefit from international cross-collaboration, and what do you think your region can offer other schools across the Network?
First, an ecosystem must be created that makes growth possible and not just encourages the creation of a large number of companies that have a small impact. This is how countries such as South Korea, Singapore, and Israel have managed, in relatively few years, to boost a very entrepreneurial, innovation-based business sector. Even though Mexico has improved in growth and competition markers, its entrepreneurs are the ones who must take on a more-relevant role and create competitive businesses. Quality should prevail over quantity, so that the country can become a true hotbed of innovative entrepreneurs.
In addition to informal networks, which are very important in Latin America as businesses emerge very close-connected to families, formal networks are needed to build an ecosystem that helps in the process of internationalization, provide additional resources and tools to be more innovative and competitive. In business schools we are working very close with new firm founders to create stronger ecosystems that develop innovation and technology capabilities, that are connected with large firms and also attract more investors, venture capital and seed capital.
Our EGADE Business School Entrepreneurship and Leadership Research Group collaborates with international academic partners from the Global Network for Advanced Management and other networks to understand how entrepreneurship ecosystems work in Latin America and help both policymakers and entrepreneurs understand what are the elements that interact in order to make more strong, efficient and attractive ecosystems.