ibc of luxembourg - 19 jun 2013 (final)
TRANSCRIPT
Entrepreneurship: An Engine for Economic GrowthConverting Individual Ambitions to Economic Growth and
Prosperity for a Nation - The Opportunity Landscape
USA • UK • INDIA
Progressive IntelligencePartners in Achievement
Power of the millions … that’s entrepreneurs, not $’s!
BGL BNP Paribas50 Av. J. F. Kennedy
L-2951 Luxembourg
19 June 2013
Denver
Chicago
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Founded 1992
62 Chapters
18 Countries
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Wave of Global ChangeChange in
economic parity
between countries
Slowdown in the
larger western
economies
Migrating
populations of
economically
disadvantaged
Shifting
demographics of
metro areas
Limited
institutional
accountability
Pace and impact
of technological
innovation
Powerful and dynamic forces have dramatically transformed the business and social
landscape across the globe, bringing new challenges and opportunities to the forefront!
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Increased emphasis by governments, through direct
programs and public institutions, volunteer organizations,
and private foundations to encourage entrepreneurship.
Intuitive and Obvious Response
While it is not a panacea solution, common sense suggests
that entrepreneurship must play a significant part in our
response to these changes globally.
An entire generation of
disenfranchised youth awaits
Current economic malaise will
stretch well into this decade
Fiscal deficits have straight-jacketed
most of the developed world
Job markets have thinned; while
eligible job seekers have risen
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Global
population
stands at 7B;
all are
potential
prospects
1.4B still live
without
electricity and
780M without
drinking water!
Global Online Retail
$0.5T; growing @
15% p.a
World has shrunk; 1B
connected with Gangnam
Style as though Psy were a
local folk singer!!
Unimaginable opportunities exist!
Android, Samsung
& Apple mobile
ecosystem $10B;
750M devicesMobile Gaming
$7.5B; next 3 yrs
But all is not Doom and Gloom
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It is crucial that we understand entrepreneurship and its
influence on economic growth; identify factors that
encourage and/or hinder this activity.
Understanding Entrepreneurship
Entrepreneurship is not a defined
science, but neither is it a game of
dice that must be left to Lady Luck!
Entrepreneurial success and economic
well-being can be made systemic and
less a matter of chance.
Chances of entrepreneurial success (leaving
aside celestial interference) are commensurate
to the enabling environment that supports it
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Entrepreneurship can be taught; one does not
have to be born with a particular DNA strand.
Making Entrepreneurship Accessible
Significant lead time to any planned remediation or
organic programmes before they start to have an impact!
Is one born with an entrepreneurial mind set
or is it something that one can learn?
In the genetic debate, if Nature is about genes then
Nurturing offers effective gene-splicing.
Education, mentoring and coaching, and effectual
networking override or strengthen the existing bonds.
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1. Develop an idea under incubation
Seeding the Entrepreneurial Mindset
Connecting the dots …!
2. Mentor through a maturing phase
3. Guide towards sustainable growth
Entrepreneurs require vital support throughout
their venture lifecycle!
4. Monetize the developed asset
1
.2
.
.
3 . 4
Seeding the Entrepreneurial Mindset
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Contribution of Entrepreneurs
Tangible evidence and broad consensus among mature and
emerging economies that entrepreneurs can catalyse
economic growth
Entrepreneurship encompasses start-up activity, as well as
the running of new and established businesses!
Entrepreneurs contribute by spurring creativity, encouraging
innovation, forming new ventures, and instigating productive activity
Entrepreneurs raise collective consciousness on benefits of self-
reliance, by enhancing the sense of control on one’s own destiny
Entrepreneurs highlight individual initiative, collaborative
ambition, and innate desire to grow what they build
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Please forgive the rhetoric but hopefully, at least some of it
is useful in crystallising your views on entrepreneurship!
Risks of Listening to Someone on a Soapbox
Privilege of the Stage: project evangelical fervour as
insightful or a profound revelation
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Entrepreneurship is a promising career choice,
offering people a way to place themselves in the
driver’s seat and often, grab a windfall of
disproportionately high returns.
We are not talking about the successful
few who are making millions but rather
the millions who simply aspire to make a
success of it …!
The Sermon
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Let’s Get Serious …!
Entrepreneurs play a crucial role in the
development and well-being of societies!
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Global Entrepreneurship Monitor (GEM)
Activity
World’s Largest Study (85 Countries) of Entrepreneurship
Global perspective on entrepreneurship, its key economic
drivers, motivating factors, and the required enabling
environment to sustain it!
Growth Aspirations
Attitude
Job creation potential;
important policy concern
in the aftermath of a 5-
year global recession
Perception of
opportunities, own
capabilities, fear of failure,
entrepreneurial intentions
and societal beliefs Start-up/new, growing
and discontinued
businesses, necessity
and opportunity driven
efforts, and age/gender
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Soft Factors with a Hard Impact
Acceptance of entrepreneurship as a career
Positive attitudes
Perceptions
Stakeholders to
enhance and assistCultural &
Institutional support
Propensity
Status and media attention on entrepreneurs can be a
significant boost to self-confidence and an incentive to carry
on in the face of diversity!
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Developed Economies
Well-developed economic, political and institutional
environments have lower entrepreneurship rates
Presence and attractiveness of employment alternatives for income
Lower necessity based motivation due to higher level of wealth
Job protection and social security lower the incentive to start businesses
Conservative financial systems and bankruptcy laws pose barriers to entry and exit
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Presence and attractiveness of
employment alternatives for income
Lower necessity based motivation
due to higher level of wealth
Job protection and social security lower
the incentive to start businesses
Conservative financial systems and
bankruptcy laws pose barriers to entry and exit
Developed Economies
Cultural factors also play an extremely important role
Professional careers evoke higher social status
Mortgages and tuition fees increase reliance on stable
incomes
Individuals (and their parents) value jobs more highly
Social and legal costs of failure limit the extent of a
safety net
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Developed Economies
At the end of 2012, its TEA* rose to 13%
43% of working age adults believe there are good opportunities for
entrepreneurship, a jump of more than 20% from 2011
56% believe they have the capabilities to start a business, a steady ratio
despite severe economic volatility of the last 5 years
… highest since 1999; a third higher than 24 other developed economies!
US stands as a dramatic exception …
Policy makers appreciate and indeed, count on the role
played by new and small businesses in the US economy!
*Total Early Stage Entrepreneurial Activity (TEA)
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Back in 2008, IHS Global Insight had found that while VC investment
represented 0.2% of US GDP, the revenue of companies created by the
industry represented 21% of GDP (2008 - $14T).
A strong VC industry is essential to entrepreneurial growth.
Developed Economies
US is counting on its entrepreneurial sector for job
creation, economic development, better healthcare, cleaner
technology, and a faster, better, and more secure internet
to build a thriving new economy.
US stands as a dramatic exception …
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Role of Effective Policy
Equity, Debt, Subsidies, Grants
for start-up, small and growing
businesses
Finance
Access to Comms., Transp.,
Util., Land & Space for start-ups,
small and growing businesses
Infrastructure
Accounting & Legal Svcs and
Institutions to promote start-ups,
small and growing businesses
Commercial & Legal
No inhibition for individuals to
create new businesses leading
to greater dispersion of wealth
Cultural & Social
Market Dynamics and Openness
for start-ups, small and growing
businesses to enter/exit
Entry Regulations
Policies & Regulations
encouraging start-ups, small
and growing businesses
Govt. Policy
Favourable Tax and Regulatory
Regime for start-ups, small
and growing businesses
Programs
Training at Primary & Secondary
school, and Mentoring & Coaching
at post-school early stages
Education
Commercial Opportunities for
start-ups, small and growing
businesses from National R&D
R&D Transfer
9-Point Entrepreneurship Framework*
*Global Entrepreneurship Monitor (GEM)
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High unemployment and a growing youth population is an incendiary
mix that presents a high risk scenario for any country.
Need programs tailored to entrepreneurs that improve the labor
market, grow the internal market and provide access to int’l markets.
Identify and implement policies that encourage start-up businesses
and support businesses with high growth expectations.
No country can afford to curtail the ambitions and
sustainable well-being of its youth … they are its future!
Role of Effective Policy
High-growth oriented approaches to entrepreneurship
result in job creation and economic growth.
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Role of Effective Policy
For entrepreneurship to take root in a country, it takes
more than just smart people with good ideas
Appetite for entrepreneurship can be dramatically influenced by
attitudes and extent of ongoing entrepreneurial activity.
Policies that discourage divisive classifications of race, age, class,
gender, and ethnicity, while assimilating socio-economically deprived
sections of society promote inclusiveness and fuel economic growth.
Encouraging entrepreneurship education and societal values in
primary and secondary schools is a key factor in sustainability of
entrepreneurship as the preferred career choice.
Economic growth through entrepreneurship must not be at
the cost of inclusiveness, global awareness of issues and a
social conscience; it is this that ensures societal well-being!
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Role of Effective Policy
High-aspiration entrepreneurs are also sensitive to the rule of law:
if that is weak, entry regulations might increase the number of new
entrepreneurs, but fewer of these will seek growth.
Protection of IP encourages specialization and supports a course of
action that best fits entrepreneurs’ core strengths.
Policy-makers can encourage the entry of entrepreneurs by
alleviating red tape with starting new business ventures
Government must consciously formulate effective and
targeted policies with supporting programs to stimulate
and support the efforts of entrepreneurs!
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In the absence of a supportive policy framework, quality of
entrepreneurial effort suffers and in turn, it diminishes the
economic impact of entrepreneurship.
Role of Effective Policy
Migratory populations and changing demographics as a
consequence is a leverage point
Robust, forward-looking, and equitable immigrant policy contributes to
developing an environment within which entrepreneurship can thrive.
Developed economies derive value from migrant entrepreneurs through
job creation, while emerging economies benefit from connections to
émigrés who help local businesses expand their reach globally.
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EventsPartnershipsEffective networksBusiness affiliations Cross-border collaborations
Academic Programs
Informed policy agendaPublic/Pvt enabling bodiesAwareness and excitement
Influence
Extend
Deliver
Launch
As
pir
ati
on
Where we want to be
Fostering Entrepreneurship
Flag Discuss Explore Practice
Maturity
Where we are today
Thought leadershipMentoring and coachingAccess to willing capitalInstitutional involvement
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Conclusion
Entrepreneurship is a multifaceted and dynamic
phenomenon whose manifestation and behaviour varies
widely around the world
Impact of evolution in social values, political climate, economic
priorities, technology-driven upheavals in how businesses are run,
coupled with an increasing “migration sans frontières” has shaped
the entrepreneurial landscape.
Entrepreneurship is picking-up pace; institutional
environment to support it will have to adapt quickly at local,
national, regional and global levels, or risk missing out on
the economic benefits of this unstoppable phenomenon!
© Copyright 2013 Progressive Intelligence Pvt (UK) Ltd.