Article Gerson Sopó Montero, Docente Investigador, Universidad Católica de Santiago de Guayaquil, Ecuador.

Keywords: Entrepreneurship, education, entrepreneurial mindset, intrapreneurship, entrepreneurial ecosystems, Ecuador.

The importance of entrepreneurship for the development of societies

At the beginning of my career as a researcher in the field of entrepreneurship, I began to analyze the importance of entrepreneurship for the development of societies. The first question to arise was: If Ecuador is an "entrepreneurial country" (I hear that a lot of times and from multiples sources), then how is entrepreneurship supporting the development of the society?

Since then, I have been finding some entrepreneurship ambiguities between academia, society and public policy that will be important to analyze.  Analysis can show what is working and also, importantly, what is not. This is how we can each accept our responsibility and find the way to adjust and improve. It is important to recognize our mistakes and evolve; this is part of our philosophy in academia. So, before I start, please accept my apologies if you remember me making a mistake!

Total Early-Stage Entrepreneurial Activity

Global Entrepreneurship Monitor (GEM) publishes an annual global report, which aims to provide data-driven entrepreneurship dynamics indicators. This report has become an important source to understand how entrepreneurship evolves across nations.

One of the indicators is the Total Early-Stage Entrepreneurial Activity (T.E.A) and it refers to the percentage of adults (aged 18-64) who are starting or running a new business. Ecuador has been “leading” this indicator for years and national press and politicians has been using this result as a “entrepreneurial flag” for their interests.

However, T.E.A impact for economies has been analyzed by different authors who found a “Negative Effect” for low-income countries. Those authors recommend that countries such as Ecuador should develop public policy focused on firms instead of individuals and improve conditions for foreign investment that could promote the growth of young business. Authors also recommend an analysis of “what one means by entrepreneurship” and emphasize that if  the meaning is "self-employment" then entrepreneurship will not lead to economic development. In these terms, it would be important to review the T.E.A impact on employment to see the “bad news” for countries like Ecuador.

At this point, I must also recognize that Entrepreneurship Ecuadorian Researchers made an important change and years ago started to use the term “productive entrepreneurship”, as a way of differentiating the way that society sees “Entrepreneurship.” However, it hasn’t caused a change in our reality. Therefore, it will be important to promote more diffusion and knowledge exchange between academy and those who make public policy, with the aim of changing and improving the allocation of resources in entrepreneurship.

"We must promote inclusive enterprise education, with a focus on developing an entrepreneurial mindset.” Gerson Sopó Montero.

Guayaquil City in Ecuador

Picture Credit: Henry Vidal Haro Aguilera on Pixabay

Education focus in business

Because of the “T.E.A success” entrepreneurship education has become relevant and has been included in formal and not formal education. Jones (2010) acknowledges some misconceptions related to entrepreneurship education and emphasizes the necessity to have a clear definition by all people involved, so as to avoid confusion. The author highlights the necessity to make a differentiation between “Entrepreneurship Education” focused on the process to start, grow and run a business and “Enterprise Education” related to the development of personal skills, behaviors and attributes to use in a variety of contexts that is also known as the “Entrepreneurial Mindset”.

Given this differentiation, we must recognize that most of the programs in Ecuador are designed and focused in a commercial way to start, grow and run a business and most of the times (universities and schools) develop it for students interested in “business”. From this point of view, we has been denying important skills for young professional people who are, or who want to be, entrepreneurs without the necessity to start a business. We must promote “inclusive” enterprise education, with a focus on developing an “entrepreneurial mindset” without limiting where, when and how it would be applied, and with the aim of creating value (cultural, social or economic). 

Lack of Intrapreneurship 

Earlier in this article, I introduced the GEM report and its importance to understanding entrepreneurial activity in countries. This holistic view of entrepreneurship adopted by GEM, includes the Entrepreneurial Employee Activity (EEA) which is a measure of the rate of involvement of employees on entrepreneurial activities as part of their job; this is often called intrapreneurship.

Different authors have highlighted the relevance of intrapreneurship in the internationalization of organizations, the enhancement of innovativeness and the increase in performance.  However, this indicator in Ecuador has been historically poor (0,93% in average) compared with Chile (4,62%). Organizations need to understand the impact that intrapreneurship has for growth and sustainability and find a way to promote activities where employees participate actively in the search for new opportunities or new ways to develop efficient processes. To reach these goals, it will be important that human talent develops skills and abilities related to continuous learning and value creation.  In this sense, employees create value for their organizations, just as organizations create value for their employees.

Final reflections

Public policy, human talent and the private sector are fundamental actors in an entrepreneurial ecosystem.  In this article, I have reflected on basic aspects related to changing our entrepreneurial reality. My reflections have led me to conlcude that it is important to begin to find spaces where academics and politicians can exchange information, and look to develop strategies that can improve the resources allocation that might improve entrepreneurial activities in the country.

Otherwise, how we are teaching entrepreneurship must be reviewed, so that it ultimately supports the development of society. We need more people with skills to solve problems and create value, that will improve not only our businesses but also our society. Human talent must be enriched with entrepreneurial skills, promoted in early ages with enterprise education, where personal skills, behaviors and attributes are applied to solve problems in different contexts.  Finally, the private sector might do more to understand its key role in the ecosystem, building bridges with academia and developing actions to help employees to be more entrepreneurial.

This is only a first point of view of issues that I consider could be changed to improve our entrepreneurial activity. Perspectives, feedback, and opinions are welcome.  Since I started my academic career, I have understood that to be better we need to listen to others and make reflections. Without reflections improvement can't be reached. Above all, we need more entrepreneurial people.  After that, we can start to put into place all the changes that will help us to find the road towards the development of our society. ◼️