Fundamentally, entrepreneurs solve problems. But entrepreneurship happens within an economic, political, and cultural context that shapes new businesses to a remarkable degree. In one country, entrepreneurs are the highly educated elite choosing an aspirational path. In another they are entrepreneurs-of-necessity, because there are no other jobs. In some places, only the politically connected would consider launching a venture. In some, race, gender, or religion may be exclusionary while in others those are irrelevant factors.
Drawing on experts affiliated with Global Network for Advanced Management schools, Global Network Perspectives gathered faculty contributions on entrepreneurship from a range of countries and regions. They describe differences in the cultural cachet of entrepreneurship, the hurdles entrepreneurs face, and the capacity of entrepreneurial enterprises to drive the economic engine of their country.
Latin America is ranked the second most enterprising region by the Global Entrepreneurship Monitor. But, José Manuel Maraboto Quepons of the EGADE Business School notes, “while entrepreneurship is booming, innovation still proves to be an issue.” In Mexico, for example, 98% of companies are micro-enterprises, and they account for three quarters of the jobs. “Despite their economic and social importance, Mexican micro-enterprises present problems of low productivity,” writes Maraboto Quepons. That’s paralleled by low rates of investment in R&D, patent generation, and participation in global markets. For entrepreneurship to have significant impact on economic growth, those things must change. But it’s not something entrepreneurs can do in a vacuum.
South Africa has seen some promising tech startups in recent years and has the potential to develop into a hub for sub-Saharan Africa, but it has a long way to go. “South Africa’s entrepreneurial ecosystem is in its infancy,” acknowledges Andrew Valentine, entrepreneur-in-residence at the UCT Graduate School of Business. With four universities, Cape Town may prove to be a valuable incubator. “Cape Town provides a good environment to test and validate new ideas, although it remains constrained by market-size,” Valentine adds. “There is evidence that high potential entrepreneurs are using the region as a base to build product and test market before launching overseas. It is a strategy that is paying big dividends for some.”
Elli Yiannakaris, director of UCT Graduate School of Business’ Raymond Ackerman Academy of Entrepreneurial Development, underscores the ties between entrepreneurship and education. “Entrepreneurship (and entrepreneurship education) has long been lauded as a solution to economic marginalization,” Yiannakaris explains, but that means that educational institutions and the public sector must support a rich entrepreneurial ecosystem. “The aim is to give marginalized young people a crucial foothold in the economy by allowing them to gain economic independence that they can then leverage,” notes Yiannakaris. “It may take a while, but this is a sustainable route to building an economy from the ground up.”
While in Latin America and Africa, many hope entrepreneurship will drive growth, in Asia, Maria Elena Baltazar Herrera of the Asian Institute of Management writes, economic growth has created fertile territory for entrepreneurs. “The social status of entrepreneurs has increased rapidly in recent years,” she writes, “and so have the institutions and organizations supporting them.”
Asian economies vary greatly, of course, as do the environments for entrepreneurs. “In the developing countries,” she notes, “the compliance burden and weak infrastructure continue to be a challenge for entrepreneurs.” The goals of entrepreneurs differ as well. “While necessity-motivated Asian entrepreneurs tend to focus on local markets, many Asian enterprises, especially those looking to scale, tend to focus on export markets. Intra-Asia trade has become increasingly important, especially in the wake of decelerated demand from the West and accelerated Asian demand arising from increasing Asian wealth.”
Kar Yan Tam, the dean of the HKUST Business School, sees promise in building on Hong Kong’s existing strengths to develop fintech. “Creative entrepreneurs can benefit from the city’s mature financial market, supported by a sound legal framework, which allow many new financial products and solutions to be developed.” Hong Kong also offers an entry point to mainland China and many other parts of Asia.
Jennifer McFadden of Yale SOM points to a long list of pluses for entrepreneurs in the U.S., including “stable capital markets, a large venture capital sector, federal support for research and development, well-established infrastructure, access to human capital, including world-class scientists and skilled manufacturing labor, proximity to a set of end users with a willingness and ability to pay for goods and services, and a strong rule of law.”
But, she writes, the U.S. is putting up hurdles with increasingly strict visa policies, lagging investment in infrastructure, and a turbulent political environment that offers entrepreneurs little in the way of certainty. McFadden warns that the calculus for where to launch a business is changing, as borderless capital, increasingly ubiquitous access to information and communication through mobile devices, and improved shipping capabilities have made it easier to reach customers anywhere: “With these changes, you will likely see more examples of truly multinational startups.”