The importance of entrepreneurship in building a vibrant economy is not a recent revelation. It is the creation of new businesses, however small they are, which will give a new momentum to growth and employment generation not only in developing countries but in developed nations as well. Policy makers also need to reorient their key
The importance of entrepreneurship in building a vibrant economy is not a recent revelation. It is the creation of new businesses, however small they are, which will give a new momentum to growth and employment generation not only in developing countries but in developed nations as well. Policy makers also need to reorient their key priorities.
While current account deficit, public debt, GDP and the regular economic ratios are all very important, focus should also be given to creating avenues of self-employment and encouraging citizens to embrace entrepreneurship as a viable career option. Entrepreneurs are the main engines of growth of any healthy economy. They act as important catalysts of change and growth by seeding innovation and creating new business models and industries. They also generate jobs, support local communities and build prosperous societies.
It is meaningless to say that countries are becoming stronger economically and deficits are starting to come down when millions of people around the world remain locked out of job market making true sustainable economic recovery a distant dream. Creating a suitable business ecosystem has become very crucial. Governments across the world have actively embarked on policies in this regard. While these policies may vary depending on the peculiar condition of each country, there are certain common factors which could be applicable to every country or society.
The following is a framework which will be useful in devising localised policies.
ACCESS TO FINANCE
The traditional financial infrastructure of many countries finds it difficult to allocate funds to a new entrepreneur. The regular process of seeking collateral and giving securitised loans may not be the right mode here. While a mature ecosystem will have angels, venture capital investors and more established private equity players, new ecosystems need to have government-run institutions and government-funded programmes to encourage startup entrepreneurs.
ACCESS TO MARKETS
While finances remain a top concern for many, access to markets is yet another core need. New entrepreneurs seldom have market or sector connect. The best link is sector-specific industry bodies, which can be incentivised for ‘introducing’ new businesses and creating a roadmap for synergising them with existing players.
EDUCATION AND MENTORING
Capital and other support without mentorship is a lost effort. It is essential to provide financial literacy to prospective entrepreneurs along with mentorship and funding support.
Focused and clear tax and business incentives are very important in supporting entrepreneurs to scale up their businesses. These policies and measures need to be widely publicised and the government institutions which deal with this need to be adequately trained on how to disseminate this information in a simple and proper manner.
In order to have a sustainable impact, young entrepreneurs need to work as part of a regional ecosystem that fosters and attracts a critical mass of talent, capital and, most importantly, entrepreneurial leaders. The role of industry bodies and entrepreneurship fostering organisations like TiE Global is paramount here.