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Start small, think big

  • Published at 07:20 pm March 22nd, 2017
  • Last updated at 08:09 pm March 22nd, 2017
Start small, think big

In the World Bank’s recent Ease of Doing Business 2017 ranking, Rwanda ranks at 56th among 190 nations. Just six years ago, it had ranked at 143rd and two decades ago, its population and institutions had been decimated by genocide.

With this leap-frog in ranking, Rwanda also saw its per capita GDP quadruple in the last two decades. How has Rwanda achieved this in such a short period of time?

The answer lies in the country’s president Paul Kagame. He once stated: “Entrepreneurship is the surest way of development.” This is the kind of change entrepreneurship can bring to a country.

However, this kind of change requires nurturing the true spirit of entrepreneurship which could only reside in a dynamic entrepreneurship eco-system.

The entrepreneurship eco-system is a network of relationships that enable interactions between a wide range of institutional and individual stake-holders to foster entrepreneurship, innovation, and economic growth.

In other words, the individual, businesses, educational institutions, governments, civil society, and development partners come to support entrepreneurial activities to inspire future economic growth and prosperity.

The concept is based on the fact that entrepreneurs tend to be most successful if they can avail the resources (human, financial, and professional) and operate in an environment in which institutional norms and policies encourage and safeguard entrepreneurs.

As the world is standing on the brink of another industrial revolution, entrepreneurs will be the key drivers of economic and social progress in future

Silicon Valley is considered the gold-standard of the entrepreneurship eco-system. Some other well-known entrepreneurship eco-systems are Tel Aviv, London, Berlin, Singapore, Paris, Sao Paulo, Moscow, and Bangaluru.

Many governments are actively working to develop this concept by supporting entrepreneurship in various ways.

By doing this, these governments are moving away from long-standing policy formulation systems which used to support only large and established companies and related industries, believing in the seminal importance of large industries for the economic growth.

However, several crises all over the world have revealed the true vulnerability of these established industries.

As the world is standing on the brink of another industrial revolution and moving to a knowledge-based economy, entrepreneurs will be the key drivers of economic and social progress in the future.

The key challenge for us would be to understand this transformation and prepare the coming generation of entrepreneurs by developing a promising entrepreneurship ecosystem in Dhaka as well as in other major cities of the country.

Developing an entrepreneurship ecosystem requires developing dynamic synergies among different elements of the system. One element that can affect all other elements is policy and policy comes from the government itself.

It has to play the leadership role in creating a sustainable entrepreneurship ecosystem for the nation’s future growth.

And to play the role, the government can formulate entrepreneurship strategy for coming years. Developing an entrepreneurship ecosystem is a continuous journey and entrepreneurship strategy will work as a guiding star in it.

However, in this journey there are some caveats. Firstly, helping SMEs, social businesses, or creating policies that promote self-employment does not create entrepreneurship ecosystem. Self-employment per se, is not entrepreneurship: Self-employment plus aspiration, usually is.

An entrepreneurship ecosystem requires different set of policies that inspire risk-taking, innovation, and of course, aspiration.

Secondly, policies that force entrepreneurs to take specific projects in specific industries (such as IT) is not going to help.

Developing a highway and telling which way to go is not the same thing.

Finally, easy availability of capital and in effect more and more new business ventures are not the indicators of a successful entrepreneurship ecosystem.

Even few ventures with high growth potential can make entrepreneurship ecosystem a success in the long run.

Starting a new business and creating jobs are important. But in this hyper-competitive knowledge economy, future growth will depend on the risk-taking, innovative, revolutionary, and out-of-the-box thinking capabilities of an entrepreneur.

The main purpose of entrepreneurship ecosystem is to nurture and deliver these capabilities and inspire everyone to dream big.

SM Musa is doing research on innovation and start-up ecosystem. He writes from Netherlands.