What are the Ingredients for Promoting Entrepreneurship? – Jean AbiNader

UK Report Examines What Conditions Help Grow New Businesses

Jean R. AbiNader, MATIC
January 22, 2015

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

In a rather lopsided view of the world of entrepreneurs, UK Trade & Investment (UKTI) engaged The Economist Intelligence Unit (EIU) to write “Helping entrepreneurs flourish: Rethinking the drivers of entrepreneurship.” According to the introduction, “This report investigates the complex issue of encouraging entrepreneurship, and in particular, the contribution that education and business can and should make towards achieving that goal.”

The EIU conducted two global surveys – one of entrepreneurs and the other of aspiring entrepreneurs ages 18-25. I call it lopsided because they went for the low-hanging fruit—only 10 percent of respondents were from the Middle East, North Africa, Africa, and Latin America, with the other 90 percent almost evenly divided among North America, Europe, and South Asia. Of course, there is great value in polling those whose experiences are reflected in their responses. On the other hand, guidance from that larger pool may not be based on the same challenges and environments encountered by start-ups in the MENA region and Africa, where driving employment is a national priority, if not a crisis in the making – witness the remnants of the Arab Spring.

I found the report useful most of the time in terms of the old rubric that defined testing at my university – compare, contrast, analyze – the directions given for many of my exams — and so I am applying that to the highlights of the report’s observations and recommendations.

Passion and Mentoring are Prime Movers

Regardless of national origins and level of education, there was a high degree of agreement among entrepreneurs and aspirants that “passion and determination are the most important attributes for entrepreneurial success.” Almost as important is the value of access to mentoring within ongoing businesses, providing much-needed work experience; and mentoring by external sources such as incubators, university programs, and accelerators. Mentoring has become so central a service to upcoming companies that there are “innumerable government-supported and private schemes to link those in need of advice with more established businesspeople.” These programs have a double benefit – providing insight for the mentee and broadening networks for existing companies that may become a source of innovation and employees.

In looking at the South however, the passion demonstrated by up-and-coming African and Arab entrepreneurs is scarcely matched by an institutional or organizational network of experienced hands to lend advice and experience. While much has improved in the last decade — witness the growth of mentor programs in Morocco and elsewhere — the sheer number of potential entrepreneurs in the region, estimated at perhaps 10 percent of the adult population, overwhelms the few initiatives to support a vibrant eco-system for business growth. In the South, there are few role models for the young to emulate, especially if their focus is on new technologies and media. What about those who feel passionate about agro-technology, eco-tourism, and improved rural health delivery?

Given the limited bandwidth, it can sometimes be burdensome for the same 30-50 established businesses in a country to be the go-to mentors for rising entrepreneurs on a continuing basis and concurrently run their own companies. Another issue in the South is that many “entrepreneurs” reside in the informal sector of the economy, which carries its own challenges and burdens inhibiting access to programs that could support them, not the least of which is an inadequate education.

Whether from the North or South, the bottom line is the same, “Finding better ways to educate potential entrepreneurs, both before they start out and in the early stages of their efforts, is therefore an important potential focus for creating an environment more conducive to successful start-ups.”

Education Remains The Key Variable

Those who have built and grown companies point out the value of education that goes beyond how to gather information to how to use it in complex environments. One is David Gorodyansky, CEO of AnchorFree, “It’s time to evolve education from just being information-driven to being experience-driven and personalized. If you are going to be an entrepreneur, it’s a lot more important to understand the world and different cultures, people and mindsets.” Regardless of their backgrounds, respondents to both surveys said that educational systems “need to give more support to potential entrepreneurs.”

Yet there is a challenge when comparing personal educational experiences vis-à-vis learning in the marketplace. Less than 20 percent in both groups think that strong academic skills are an important attribute for success. And in many ways, a formal secondary or tertiary institution may not be the most effective venue for enhancing the eco-system for entrepreneurs. “Of entrepreneurs surveyed, 81 per cent say that they acquired more entrepreneurial skills through work experience than education, and 70 percent say that having corporate experience before becoming an entrepreneur is preferable.”

It might make more sense, particularly in the South where access to quality education is often a function of socio-economic background, to instead provide discrete courses accessible to more learners that focus on skill sets required by entrepreneurs, such as financial planning, business plan development, navigating a regulatory environment, networking skills, issues related to registering a company, etc. These simple how-to business-focused components, when part of a robust environment for business start-ups, may provide the framework for partnerships between the government and the private sector that lead to accelerated job growth, key to domestic stability and building a strong middle class.

While it is challenging to stretch the insights in the report to specifically fit realities in Africa and the Middle East, the core issues are the same – how to craft an eco-system linking education, training, financing, an enabling regulatory environment, transparency, supportive institutions, and whatever else is needed to give passionate, focused, willing-to-learn risk takers real opportunities to create something of benefit to themselves, their colleagues, and their country. Perhaps, having less to start with, as in the South, may generate options that are beyond the imagination of others who do not face the same obstacles.



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