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Innovation in emerging markets is the only recovery tool to create jobs
Risk and initiative will win out in shaking off the shackles of the global collapse says Lyon think-tank
Sanjeev Rao, founder of the organisation ‘Gateway to India’
Globally doing the business
THE government is inviting applications for entrepreneurial cities, and more than 80 cities have applied for the title, Chinese academic Gao Jian told the forum. The socialist country has also just launched a stock exchange for small companies, giving entrepreneurs easier access to scale-up capital.
ANKARA sees strong brands as the future of its entrepreneurship and is ploughing its resources into the ‘Turquality' project, local entrepreneur Aysen Zamanpur told the Forum. The programme gives advertising, shop decoration and other supports to people who have proved they have a brand “that can be accepted worldwide”. The brands can also stamp the Turquality logo on their products.
Laurel Delaney, US writer of books on global business Kenyan mobile phone entrepreneur Nyokabi Njuguna (right) with another delegate at the Forum
EEP in the heart of France, as the battle for World Cup supremacy rages a few hundred kilometres down the autoroute, masses of business people, politicians and academics are convening for a black-tie dinner. In stark contrast to the patriotism that courses through nearby pubs and living rooms, national alliances have been left outside the door of the rustic restaurant that plays host to their multi-cultural gathering. Theirs is a global purpose, The World Entrepreneurship Forum, a little-known event that unites members from almost 50 countries in a bid to stimulate and nurture entrepreneurship the world over. The 80 who assembled for this year's think-tank include leading business, political and academic figures from emerging markets like India, Singapore and China, as well as those driving business development in newer economies like Cameroon, Kenya and Swaziland. They've cleared at least four days from their schedules and spent countless hours preparing material in advance, all in the name of devising entrepreneur-friendly recommendations for the world’s governments. To the sceptical, an aura of ‘fiddling while Rome burns' permeates the night as the guests savour theatrically-served champagne and foie gras while the financial world goes up in smoke outside, taking with it the seed capital that's the lifeblood of entrepreneurial ventures. The more seasoned see the relationship between entrepreneurship and the recession in a different light. “Entrepreneurship is the only recovery tool,” says Patricia Greene, an internationally renowned entrepreneurial expert from US business school Babson. “What else is going to create new demand and new jobs?”
“It's a scary time ... the headlines say the world is going bankrupt. We as entrepreneurs have to be ambassadors of understanding the crisis as an opportunity ... which opens up spaces for new companies.”
Lee Yi Shyan, Singapore’s Trade Minister Patrick Molle, head of Emlyon Business School
ENTREPRENEURS are benefiting from a Bank of Solidarity that provides loans to young companies, Tunisian senator Riadh Zghal told the group. The African country is also bringing small crafts people together to form groups that can export.
THE term mobile banking takes on a whole new meaning in Kenya, where the government is stimulating trade by allowing mobile phone companies to act as banks. Kenyan entrepreneur Nyokabi Njuguna told the conference that people are allowed put up to $500 US on their phones, and then pay for things using their mobiles, empowering the swathes of Kenyans who don't use traditional banks and facilitating commerce and entrepreneurship.
Entrepreneurship in Ireland
IRELAND prides itself on being a nation of entrepreneurs but the latest global snapshot shows that while our entrepreneurial activity is still ahead of the EU average, the number of people actively developing new ventures is rapidly falling. Published in summer 2009, the Global Entrepreneurship Monitor (GEM) showed that 4.3pc of Irish people had started new ventures in the three years to mid-2008, far outstripping an average of 2.3pc across the EU. The percentage of Irish people actively developing new business was 3.3pc, against 4.2pc a year earlier and a high of 5.7pc in booming 2005. “This is the lowest level ... in the last five years and is a very significant decline,” the monitor noted grimly. The trend looks set to continue, with this year’s GEM noting a “market decline in the general perception of entrepreneurship as a good career choice” in Ireland. Just 55pc of people now see entrepreneurship as a good career choice, down from 63pc a year earlier and putting us below both the EU average (61pc) and the OECD’s (60pc). The monitor also shows that 9pc of Irish people were “established entrepreneurs” in 2008, matching the level of 2007, and pointing towards a “very positive culture for entrepreneurship”, with entrepreneurs held in high esteem, and a supportive media.
Singapore leads the way in facilitating ways to re-energise the world economy
NOT content with playing host to a gaggle of multinationals that would make the IDA's eyes water, city state Singapore is now developing a “global entrepreneurship hub”, Trade Minister Lee Yi Shyan told the Lyon gathering. “In 2001 we had an economic review committee looking at ways to reenergise the economy,” Shyan said. “We realised that while we were very
Others point to the enduring spirit of entrepreneurs that helps them overcome even the most inclement economic environments, while some say the tsunami that's engulfed the world's economies actually provides the perfect breeding ground for the next generation of entrepreneurs. Rather than being stamped out by the global collapse, the entrepreneurial revolution, they argue, is heading for its heyday. Triumph over adversity is nothing new to Carlos Moncayo, a 28-year-old who has risen from humble Ecuadoran beginnings to win this year's Best Young Asian Entrepreneur accolade from Business Week. Unable to secure start-up funding for his Shanghai-based offshore management company Asiam, Moncayo used a credit card to get the venture off the ground when he spotted a gap in the market for a company to perform quality control checks on clothes produced in China. The recession has “affected” business and Moncayo admits focusing all his energies on Asiam would “be the best thing at times like this”, yet he's travelled half the world for a think-tank that yields no obvious benefit for his firm.
good at bringing in multinationals we needed to do more to promote entrepreneurship and start ups.” From that review, a Minister for Entrepreneurship was born, backed up by a new government agency 'Spring' and the Action Community for Entrepreneurship (Ace), an “open inclusive forum” for people passionate about entrepreneurship to come together with suggestions. “We realised you could create a business environment that was very good for multinationals but still too difficult for start-ups and SMEs,” Shyan said. “We decided to ask our customers, the small businesses, what regulations weren't good for them.” So far the canvas has yielded more
than 2,000 suggested changes from SMEs, of which about 1,000 have already been implemented, accounting for some of Singapore's success in securing the ‘Ease of Doing Business’ accolade from the World Bank for four years running. On the financing side, the Ace panel works with early stage “angel” investors and venture capitalists to help match money to entrepreneurs. The panel also works with banks, trying to move SMEs’ experience beyond overdrafts into “a variety of financing options” including longer terms loans that are partly guaranteed by the state. Beyond today's entrepreneurs, Singapore is spreading the word to
Many of the proposals centred on financial incentives and supports governments could advance for budding entrepreneurs, but early education was also a major focus. “Entrepreneurship is a mindset and a skillset, we can absolutely teach it,” says Greene spiritedly, exuding an air of someone who's often been challenged on that very point. “The key is that we don't just have to educate entrepreneurs, we have to educate everyone in the system – the bankers, the insurance people, the accountants – that's how you can get a vibrant entrepreneurial climate.”
schoolchildren, sending successful entrepreneurs to visit more than 30,000 students over the last three years and giving schools money to develop entrepreneurship in their curriculums. “One survey we did in the National University of Singapore found that 81pc of students say they would eventually like to start their own business,” said Shyan. “That's music to my ears, because there was a time when they'd say 'why take the risk?' when they got a professional job with a multinational. “If we can achieve this mindset change, it's a huge thing.” LAURA NOONAN
strong “Silk and Cashmere” chain says it's been “good to have the discussions even if the list doesn't go anywhere”. “The things we've discussed here will do good for me tomorrow,” she adds. “Education is an ongoing thing.” For Emlyon Business School head Patrick Molle, who effectively founded the Forum in 2008, the goals are more abstract and long-term. “We want to impact education globally and public policy globally,” he says. “Leaders are very short-term in their decision process. We hope to change that mindset by getting them to take the time to discuss things together so they can take a more long-term view.”
opportunity for “real entrepreneurship to come to the fore” in the recession, having seen how Indians returning to the motherland are increasingly striking out on their own as they “can't get the salaries they thought they'd get” in big business. Singapore's Jack Sim, a one-time construction entrepreneur who set up NGO the World Toilet Organisation to make toilets a must-have in poor countries, also sees entrepreneurial opportunity in the recession, albeit from a different angle. “The people on the top of the pyramid have stopped buying, entrepreneurs have to find a new customer and that new customer is the poor,” he told a stunned looking group session. “The poor still have some capacity to buy, and there are billions of them so there are huge economies of scale.” Babson's Greene has another take on the impending entrepreneurial surge. “A long time corporate worker recently told me that (after the fallout from the financial crisis) he'd never again rely on someone else for his living,” she says. “He thinks it's much less risky to rely on himself. There's a huge change in attitude going on out there.” On a broader scale, Laurel Delaney, the American author of numerous books on global business and entrepreneurship, describes the downturn as a “the ideal time to start a business” and a “great time to be innovative”. Further afield, global economic thinktank the OECD used its latest ‘Measuring Entrepreneurship' bulletin to reference entrepreneurship's role in offering “ways to help meet new economic, social and environmental challenges”.
Developing that vibrant entrepreneurial climate is what the Lyon forum was all about, but the gulf between coming up with an agreed set of proposals, a painstaking process in itself, and getting those proposals implemented is an immense one. Some delegates privately wonder where it all goes from here – is there a process to bring the proposals to fruition, will governments listen and if they do, is there any money to do anything? A few float the idea of presenting the proposal to Singapore's Trade Minister in the Q&A after his address to the Lyon forum. “We could ask him to bring it to Copenhagen (for the upcoming climate change summit),” one suggests. Greene has a more ad hoc solution. “The people here have influence in their own countries,” she says. “They can go home and use their social capital to get their politicians on board.” Meanwhile, Turkish entrepreneur Aysen Zamanpur, who is the founder of the 50-
He illustrates the point with a French story about a man hacking away at a tree with a blunt axe, making scant progress. Six times, another man taps him on the shoulder and advises him to sharpen the axe. Each times he replies “non”. The man taps a final time – ‘my friend you should sharpen your axe'. ‘I haven't got the time' the woodcutter finally shoots back. “That's what we see in the world, that's what we're trying to change,” says Molle. “The single biggest challenge for the world isn't the scarcity of energy resources, it's demographics, dealing with more people living longer and how to keep those people in jobs.”
As for more tangible benefits, Molle says the “short-term objective” of the Forum is to “confirm interest” amongst its target community and cultivate debate and ideas. Short-term concerns like the recession don't feature in the agenda – one delegate laments that decision as a “missed opportunity” to debate how entrepreneurs can install themselves in the new world order, but it is defended by Molle who speaks of the need to “concentrate on real issues for the future”. The Frenchman is already two years into a five-year plan to “finalise the concept” of the Forum. The to-do list between now and 2013 includes hosting the event at an international destination, possibly Shanghai or Singapore, and establishing regional networks. “In year five this will be a success for me if we've been able to produce innovative ideas and have them implemented in some part of the world,” he says.
“I've reached what I wanted, enough is enough,” he says simply. “Being successful doesn't mean being a millionaire, it means having enough money to afford everything you need. After that you can chase your passion.” Moncayo's passion is “developing entrepreneurship”, particularly in his native Ecuador where entrepreneurial support is thin on the ground. He's in Lyon because he believes that now, more than ever, he needs to be here. “It's a scary time, people look at the news and the headlines say the world is going bankrupt,” he says. “We as entrepreneurs have to be ambassadors of understanding the crisis as an opportunity. The crisis creates adjustment, which opens up spaces for new companies.” Moncayo's Asian neighbour, ‘Gateway to India' founder Sanjeev Rao, also sees vast
“Economic crises are historically times of industrial renewal, or creative destruction, as less efficient firms fail while more efficient ones emerge and expand,” the OECD continued, adding that new businesses “often emerge during downturns”. The OECD went on to point out that many of its member countries have “made entrepreneurship an explicit policy priority”. The statement goes to the heart of last week's World Entrepreneurship Forum, where delegates insisted that the world's governments had a major role to play in enabling global entrepreneurship and detailed how they should up their game.
LEADERS ARE VERY SHORT-TERM IN THEIR decision process. We hope to change that mindset by getting them to take the time to discuss things together so they can take a more long-term view.
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