Davos: Why Chile and Colombia lead the world in entrepreneurship
entrepreneurs are rarely innovative or create many jobs.
As economies grow more competitive, fewer entrepreneurs start businesses, but those who do are more frequently innovative or ambitious regarding job creation. In both cases, the countries in question have good traits, but lack other ones to achieve full entrepreneurial potential.
Chile and Colombia are singled out as the only countries to have broken out of this trap and become entrepreneurial “all-rounders”: for the size of their economy, they have high levels of new businesses launched by high-impact entrepreneurs who frequently innovate and expect to create a large number of jobs.
Tip of iceberg
Fischmann is just the tip of the iceberg in one of the most dynamic entrepreneurial ecosystems in the world, where Chile, and specifically Santiago, is becoming a nexus for entrepreneurial ventures.
How did Chile get to where it is today? Given a long history in extractive industries, local businesses would frequently be low value-add.
This changed radically during the last decade, when Chile launched a suite of publicprivate initiatives.
Best known is Start-Up Chile, which aims to create one of the biggest start-up communities in the world (and was noticed by Beyondbrics). Selected entrepreneurs from around the world receive a work visa and $40 000 (R468 000) seed capital from the government.
In only four years, more Independent Newspapers will be represented at World Economic Forum in Davos by Ellis Mnyandu (@Ellis_Mnyandu), Business Report editor and group executive: Independent Business Media, and by Karima Brown (@KarimaBrown), Independent Media’s chief content officer. Follow our Davos coverage via Twitter @busrep and online at www.busrep.co.za The goal is not only to attract top global entrepreneurial talent, but to leverage this talent for a change in Chilean business culture to be more enterprising, growth-oriented and innovation-driven – a key ingredient in thriving entrepreneurial ecosystems.
But the government has also made structural changes that are less well known. A national online platform enables entrepreneurs to start a new business in one day with zero cost. A “re-entrepreneur law” makes bankruptcy proceedings straightforward and low-cost. Those adjustments help with the daily challenges of entrepreneurship, beyond the hype.
Yet to simply copy from Chile would be to miss its les- son. To see why, consider Colombia’s success – the second “all-rounder” in the study.
Colombia faces very different challenges from Chile, including high levels of inequality and risks of political instability.
While the Chilean approach has concentrated on its challenge of changing cultural norms, Colombia has focused on developing a strong institu- tional framework to grow the number and ambition of its businesses. Michael Drexler is the senior director and head of investor industries at the World Economic Forum. José Ernesto Amorós Espinosa is the coordinator and main researcher of Chile’s Global Entrepreneurship Monitor, based in Santiago, Chile. This article first appeared on the World Economic Forum blog