by Entrepreneur. The word itself sounds exotic and mysterious. When a person thinks of one, they make think of a person in a far off land making some kind of deal that will result in a profit of some kind. They may never take notice of the small business person in their own community or on their own street trying to do the same, or the individual building a business from nothing somewhere in their own country.
Yet, a modern entrepreneur is more than that. What? He or she is a risk taker; a person who works, invests, builds and in essence, creates economic opportunity for themselves and for their employees. In turn, this activity creates jobs, produces tax revenue for the state, produces goods and services for the domestic or international market, stimulates other business activity and helps develop a country. Governments can’t create prosperity. Non-governmental organizations (NGO’s) can’t create prosperity. Entrepreneurs will.
However, this scenario has many problems to overcome. No business person operates in a vacuum. If an entrepreneur is to succeed, they need not only capital, markets, trained employees and a chance for profit. They need a business climate that is friendly to their activity. They need schools, roads, a society ruled by law, and a tax policy that doesn’t stifle their activity. Let’s look at the problems.
Let’s look at the problems facing and challenging the entrepreneur. Any list would include access to capital, access to markets, corruption, education and what I refer to as defining the proper role of government.
Business activity needs capital just as the body needs food. A strong national and regional banking system is vital. Entrepreneurs need not only the money that a bank can provide, but also other banking products such as checking accounts, letters of credit and lines of credit. As part of the banking system, microfinance could have a place where loans are made to small companies getting started or to those that are expanding. Done properly, this could help entrepreneurs who have no other sources of capital.
In the United States, The Small Business Administration; a part of the central government of the United States backs or guarantees loans from private banks. This allows business people to borrow money at a lower rate of interest. In some cases, they make direct loans to businesses. The establishment of a similar system in a country would increase economic activity and should be a goal of business people-new or experienced.
Finding markets must be a priority. Not only trade barriers between countries need to be abolished but regional trade barriers must also be eliminated.
The use of the internet has proven to be a powerful tool when it comes to finding potential customers. Broadband access available to business and schools alike needs to be a goal of any society that wants to develop.
Corruption must be addressed. Many countries have already put in place anti- corruption measures at the national level. Regional and local governments need to put in place laws that fight it as well. People need to be encouraged to expose corruption without fear of retribution. As long as corruption is a problem, it will act as a deterrent to entrepreneurial activity and therefore to economic growth.
Education is another key factor in economic growth. Where do people go to learn to read and write? Where do people go to learn basic math skills as well as history and science? The answer is obvious: school. Government provided education should be regarded as a basic right.
Yet, there is a role for education provided by non-governmental organizations. In the United States, charter schools are set up by educational institutions such as colleges and universities to compete with publicly provided schools. The idea is that competition will result in a better educational system for the students and make both school systems stronger as well. These charter schools are run by private corporations with funding coming directly from state governments.
Vocational education must also be viewed as a viable option for students. They can be taught and trained in fields that will give them skills necessary to economic development; fields such as medical research, tool making and machine repair to name a few. This type of schooling is particularly well developed in Europe and is being expanded in the United States and Canada as a way to train students for careers that do not necessarily need a university education.
The entrepreneur-and business people in general-should be organized to advocate for policies friendly to business activity. Business organizations at the local, regional and national level can take the concerns of entrepreneurs to governments and bureaucrats at every level. The issues and challenges I’ve written about need to be addressed simultaneously. They need to be worked on and implemented immediately. This takes organization.
Another additional benefit happens when business people come together-mentoring. Successful business men and women can meet people who are new to business and help them develop their talents and skills. The new entrepreneur may have ideas and insights that can help a veteran business person as well. The regular interaction of both veteran and novice business people can benefit both, and may lead to lasting business relationships that can enrich both.
Finally, the proper role of government needs to be addressed. Government cannot create as many jobs as needed in a developing country. However government has a role in creating a business climate where entrepreneurship and job creation can flourish.
The rights of citizens as well as their property rights should be recognized in law. After all, who wants to try and build a business in a lawless society? It can’t be done. Courts need to enforce rights without regard to race, religion, tribal affiliation or wealth. Courts must settle disputes peacefully, allowing people to resolve problems and disputes in a way that doesn’t destroy a community, region or even a country.
Copyrights and trademarks need to be protected. Who wants to innovate if any innovation can be stolen and used? Copyright and trademark infringement needs to be punished and the perpetrators jailed and or fined.
Tax laws need to be written that encourage risk taking and investment. Corporate taxes need to be kept low to encourage this. Corporations that are charged high taxes, pass these taxes along to their consumers in the form of higher prices. There is a saying in American business schools: Businesses don’t pay taxes-they make their customers pay them. High corporate taxes act as a deterrent to growth, job creation and development.
Infrastructure such as roads needs to be mentioned. If there is to be a free flow of goods and people in a country, roads and their maintenance needs to be a priority.
Zoning laws have to be established at the local government level. Business districts should be established for the benefit of all people. Why? People in a residential area or children in schools would not be distracted or put at risk by neighboring commercial enterprises. Businesses would not have to worry that they are interfering with families who may have members working for them. If a fire should break out, not only would it be easier to fight in a commercial business area, the potential loss of life would be lessened by keeping businesses separated from homes and schools. There is another benefit. When businesses are close by each other, they get to know one another, they can also become customers of each other and work on problems together that they each face. As a one time member of my municipal planning commission I helped revise our local zoning ordinance to help ensure that businesses could operate freely, people could be safe in their homes and children would be safe in their schools. If it is of any interest, I would be happy to work with governments on developing zoning and planning laws or ordinances on a volunteer basis.
The entrepreneur and their activities can literally remake a country. Their ambition, initiative, risk taking and hard work will create economic development. With this increase economic activity, the need for resources that come from other nations or organizations is reduced. Interference in a developing country’s national affairs-intentioned or not-is also reduced. Economic growth and development will bring to an end the last vestiges of colonialism-and the entrepreneur will be the ones leading the way. Thank you.
