Page last updated at 08:05 Asia/Manila, Thursday, 06 October 2016 PH
Not everyone can be an entrepreneur because not everyone can combine an innovative or creative mind with the ability to take risk. Of a random sample of 100 Filipinos, I would surmise that less than 10 will succeed in an entrepreneurial career. That is why we should not assume that we can easily develop the entrepreneurial spirit among the poor. They are better given high-quality basic education and provided with technical skill so that they can be employed by those who can be entrepreneurs. The fallacy of many well-intentioned initiatives to use microcredit to develop entrepreneurs among the poor is the reason for the disenchantment with the Grameen Bank model form Bangladesh and its many variants. The majority of micro enterprises are not entrepreneurial ventures that can grow into SMEs or even larger businesses, but are just coping mechanisms to alleviate poverty temporarily. The proceeds from microcredit are generally used for consumption, not investment. Those who establish micro enterprises are better off being provided with further education and skills so that they find better-paying jobs as employees.
Among those who have decided to make their business their career (especially those taking courses in business administration); however, it would not be unrealistic to assume that the entrepreneurial mindset can be nurtured in them. This is the very positive message of a book entitled “Shaping Entrepreneurial Mindsets” edited by Dr. Jordi Canals, Dean of the IESE Business School in Barcelona. Business executives and managers can be helped to develop an entrepreneurial mindset through proper education and training in business schools. It is important to help corporate executives to be entrepreneurial because as one of the authors of the above-mentioned book, Pedro Nueno, wrote: Entrepreneurship is and will remain very relevant for companies and society. Entrepreneurship is a way to introduce innovation in society and into existing companies, a way to identify new opportunities which satisfy the needs of people and society (health care, education, leisure, basic needs, etc.) and transform them into new companies. As a consequence, entrepreneurship creates new jobs and often better jobs.”
Unlike the original “entrepreneur” envisioned by the great economist Joseph Schumpeter, who coined the word, the entrepreneurs of today can be “intrapreneurs”, i.e. they can develop their innovative ideas within a corporate organization. As Dr. Nueno wrote: “Entrepreneurship can happen as a new venture, can start inside an existing company, can be practiced by the top management of a corporation or can even be the result of an alliance between two companies or an acquisition which increases the dynamism of the acquiring and the acquired companies.” Thanks to entrepreneurship, financial markets have developed adequate concepts and products (venture capital, private equity, business angels, crowd funding). Society itself has recognized the value of entrepreneurship by supporting it in many ways, from financial and tax incentives through education. It is well understood that there is a body of knowledge associated to entrepreneurship and that this can be taught. By highlighting entrepreneurship as a leading social priority, it can be added to the CSR activity of many corporations.
IESE Business School professors M. Julia Prats and Susanna Kislenko identified some of the key competencies of an intrapreneur within a corporate organization:
--Business competencies and industry knowledge: These are the skills and knowledge that enable an entrepreneur to exploit opportunities. When faced with unsettled contexts, an intrapreneur is more likely to succeed if he or she has a clearer understanding of industry evolution, the influence of institutional arrangements, the effects of globalization, techniques for developing markets, cash management and financing opportunities.
--Interpersonal competencies: especially communication skills, since entrepreneurs should be masters at creating prudent transparency with the right information to the right people. The most successful intrapreneurs visualize their projects so clearly that they are able to describe them in such a way that persuades others to join them in pursuit of that vision; and negotiation skills, the ability to find creative solutions from among the negotiable alternatives and favorable agreements that benefit all sides. Good intrapreneurs are in favor of win-wins.
--Personal competencies: These are tenacity/discipline. Successful entrepreneurs persevere in their undertaking or project. They wait patiently for results and are independent enough to change or to stay in the same business even in an adverse environment; emotional balance: managing uncertainty and ambiguity and not being overwhelmed or discouraged by difficulties is critical component of success for entrepreneurs or leaders of all sorts, especially when they come from within; integrity: sincerity and transparency of opinions and objectives are important, as it means acknowledging one’s own mistakes and not blaming others in the process; self-awareness and humility: self-knowledge, confidence and a capacity for self-criticism are important for all entrepreneurs.
As early as 1989, the University of Asia and the Pacific started to offer the Entrepreneurial Management Program in its undergraduate school of management. Many other business schools followed suit, especially at the graduate level. We should be glad that the entrepreneurial mindset can be nurtured among a select group of our university students and young professional people. Having a critical mass of innovators and risk takers will be indispensable to our making the leap from a middle-income country to a First World economy in the next twenty years. For comments, my email address is email@example.com.