by Benel P. Lagua
Entrepreneurship has been heralded as important for growth, productivity, employment and innovation. With globalization reshaping the economic landscape and the political pivot both here and in the US, there is greater volatility and uncertainty in the world economy. Entrepreneurship is seen to offer solutions that will help meet the new economic, social and environmental challenges.
In times of major changes, the impetus for renewal will come from innovation and creative distractions as less efficient firms falter and more efficient ones emerge and expand. New business models and new technologies are often spurred by entrepreneurs who look at doing something new, or changing ways of doing old things. This economic dynamics of new firm creation and dispersal of innovative products and processes are stimulated by a strong entrepreneurial class. For this reason, policy aims to encourage the participation of more people, like certain target groups such as women and the marginalized in economic activity. There is a big buzz to encourage entrepreneurship in the world and in our country today.
So the good news is that policy changes are now being designed to develop an environment that will enable the growth of entrepreneurship and reduce the obstacles to its success. Hence, we observe initiatives to reduce the steps for starting a business and mentorship programs aimed at guiding the aspiring entrepreneurs. The overall business climate for entrepreneurship is now a policy concern, and the young and not-so-young alike are being encouraged to take the entrepreneurship path. These days, it is fashionable to become an entrepreneur, to start one’s own business according to one’s values and to be your own boss.
The bad news is that running a business may not be for everyone and to believe anyone can be a business entrepreneur is a myth.Entrepreneurship entails taking a lot of risk and people’s attitudes towards risk vary considerably. Risk taking requires a specificpersonality type and a special mental toughness. By definition, entrepreneurs are persons who seek to generate value through the creation or expansion of economic activity through the identification of new products, process or services, by taking on greater than normal financial and other risks. The key element here is how one faces the uncertainty and unpredictability of what lies ahead.
My Macbook thesaurus offered the following informal description of the entrepreneur -– wheeler-dealer, whiz kid, mover and shaker, go-getter, high flyer, hustler, idea man/person. Let’s ask ourselves: how many can honestly claim to be so described? Do they have the skill set and the capacity to address the business demands of a 24/7 engagement? Have they lined up the operational and financing hurdles needed to meet the demands of an unpredictable set of inputs and outputs?
Successful entrepreneurs have special skills not all of us possess. They are astute managersof money, people and resources. They are quick to identify opportunities where other people only see problems and challenges. They are comfortable with uncertainties, changes and a volatile environment and have a readiness to take calculated risks (not gamble). They are good negotiators and can deal well with all kinds of people, from the lower workers in the organization to the most sophisticated partners and customers. They are good implementors and executors who walk the talk. They get up when they initially fall down and are resilient and consistently on the go. They are not easily discouraged and are passionate about what they do.
While we can list some of the good qualities an entrepreneur should have, there are no standard templates for success. Not even an MBA degree or an entrepreneurship course will guarantee business success. Some of the greatest entrepreneurs are college drop-outs.For every successful entrepreneur, there are many who fail. For many of us, working in traditional organizations still may be the best option. It may not be as glamorous as entrepreneurship, but it has its own rewards.
To recap, entrepreneurship is needed for the country’s economic growth and progress, and policy encourages it. But given the multifaceted nature of entrepreneurship and the many factors that will spell its success, it is not the route for everyone. Entrepreneurship is important, but hopefully it will not delude people to believe it is for everyone.
(Benel D. Lagua is Executive Vice President at the Development Bank of the Philippines. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and does not necessarily reflect the opinion of his office as well as FINEX.)