An entrepreneurial nation

Many nations have aspired for a national development scenario where the middle class comprise a broad band as opposed to a pyramidal socio-economic structure. To alleviate poverty, the usual strategy has been focused on attracting big business and foreign investors to generate employment. However, we have lived long enough to observe that this strategy has not worked. And if a strategy has not been working, why not change it and pursue an alternative that just might?

Let’s start with a vision and a fervent Christmas wish: that the Philippines becomes an entrepreneurial nation.

Q. What is an entrepreneurial nation?

A. An entrepreneurial nation is a country with a middle class that is composed more of entrepreneurs rather than individuals employed by big business or employed overseas. This middle class constituting the majority of the population will have a mixture of the three types of entrepreneurs–the classic entrepreneurs, the intrapreneurs or corporate entrepreneurs, and the social entrepreneurs.

However, there should be more of the classic entrepreneurs. This particular breed of people create and grow enterprises using creativity and innovation. These are people who run their businesses hands on and are willing to dirty their hands. They have vision and passion, with a long-term view of their lives and enterprises. Classic entrepreneurs are not deal-makers who make money in the short run. They are in for the long haul. Recall that all big businesses today were started by an entrepreneur.

Q.Why an entrepreneurial nation?

A. After having seen the business performance of student-entrepreneurs enrolled in AIM’s Master in Entrepreneurship program, one cannot help but conclude that small and medium enterprises can continue to grow under adverse conditions, if "entrepreneurially" managed. Even under so-called crisis situations and periods of uncertainty, SMEs that are "entrepreneurially" managed still improve their business performance. Entrepreneurial managers view crisis as opportunities. As we have reiterated time and again, the bigger the crisis the bigger the opportunity.

The business performance of big firms managed the big business way is greatly affected by the politico-economic tide. In contrast, political and macro-economic issues do not bother SMEs that are "entrepreneurially" managed.

Factory closures, lay-offs and right-sizing are just some of the strategic responses of non-"entrepreneurially" managed firms. This clearly adds to the unemployment situation. Therefore, if the growth of a nation dependent on big business employment opportunities as a strategy for poverty alleviation is greatly affected by issues of political stability and other macro economic factors, why not consider the reverse? Let sound macro-economics and political stability be the result of having an entrepreneurial nation.

An entrepreneurial nation will grow in spite of bad politics and bad macro-economics. Witness those countries that are entrepreneurial nations. Even if their political leaders engage in parliamentary scuffles or are removed from office all together, a nation whose middle class has more SMEs and less of big business employees continues to grow. In some cases, it has come to a point where the growth is no longer determined by who are the political leaders nor by macroeconomic conditions. Growth happens in spite of politics and economics.

Q. How can an entrepreneurial nation be built?

A. This is an issue of strategy and structure. Simply copying from other countries is not the answer, although the strategic intent is the same. The entry barrier for entrepreneurial development and management must be lowered. Setting up and incubating an enterprise must be made easy.

First, we must identify the root of the difficulty. What are the hindrances to entrepreneurial development and management.? After listing these down, we must see how each item hinders the strategic intent. Then, we shortlist the hindrances down to the critical few, no more than 20% of the list. For each of the critical hindrances, we then come up with a specific set of tasks that will result in removing the hindrance/s.

After each task-hindrance tandem has been isolated, these are further organized on the basis of who is going to do what. Thereafter, a structure must be set up for implementation and monitoring purposes.

The foregoing is a process that generally applies to strategic planning. While we must evolve our own unique solution, we can learn from other countries.

Some have utilized a very unstructured process and simply did not interfere with the process. Akin to the overnight mushrooming of squatter colonies, they just let their enterprises bloom and grow, without external regulation nor intervention. Some countries have been more purposive and structured. One such country even has a ministry focused solely on the development of entrepreneurs.

(Alejandrino Ferreria is the dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further comments and inquiries, you may contact him at: [email protected]. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www.aim.edu.ph).