Entrepreneurship is a great catalyst to promote inclusive growth in developing countries.
There are more than 300 million small and medium enterprises in developing countries, and we all know that small businesses provide opportunities for inclusive development in their communities in many ways, including being the main providers of jobs, particularly for less advantaged people; and are usually the suppliers of basic goods and services in low income or isolated communities.
However, despite its large importance in economic growth, the developing world still faces enormous challenges when it comes to unleashing the full potential of early-stage businesses. In addition to apparent needs such as access to capital, the following have to be taken into account to improve the entrepreneurial ecosystem:
- Rural areas are key in developing markets to unlock economic growth. According to the Food and Agriculture Organization, in 1960, 22 percent of the population in developing countries (460 million people) lived in cities and towns. By 2015, that reached 49 percent (3 billion people). Significantly half of the population in developing markets still live in rural areas. The advent of smartphones to rural areas, albeit at a lower penetration rate, provides more opportunities for rural entrepreneurs. Thus we need to focus support efforts for entrepreneurs in rural areas, too.
- Incubators and accelerators. Having incubators and accelerators accessible or located closer to lower class areas is crucial so that people from these communities who know local challenges can be empowered to solve them.
- Filling the gap between R&D and the launch of the startup. This includes the physical prototype development and following on the patent registration. Investors will say ‘the concept is excellent, and we see your R&D, but we need the prototype.’ Entrepreneurs need partners for this – financial, operational and technical.
- Incubators, Accelerators and VC funds to provide the entrepreneur with access to
- Mentoring regarding managerial aspects of a startup, including cash flow, managing people and marketing.
Governmentneeds to look at its policies that incentivize entrepreneurial development. For example, how to incentivize the ownership and register of patents.
Debut author Jesmane Boggenpoel is an experienced business executive and former Head of Business Engagement for Africa at the World Economic Forum in Switzerland. She has served on the boards of various South African and international organizations. She is a Chartered Accountant and holds a Master’s degree from Harvard University’s JFK School of Government. Jesmane was honored as a Young Global Leader of the World Economic Forum, is a Harvard Mason fellow and a shareholder and founding board member of African Women Chartered Accountants Investment Holdings. Boggenpoel has extensive global experience having studied and worked on three continents, as well as traveling to over 65 countries.