Promo%ng  Entrepreneurship  in  developing  countries:  

From  Policy  formula%on  to  program  implementa%on  

Alejandro  Rubias,  November  2014  

Agenda  

•  Entrepreneurship  and  Employment  trends  •  Entrepreneurship  Policy  Framework  •  Empretec  

Entrepreneurship And Employment trends  

Global  Demographic  and  Employment    Trends  

 Source:  InternaIonal  Labour  OrganizaIon  (2013)  and  Youth  Business  InternaIonal  

Overall,  the  global  youth  unemployment  rate  is  projected  to  rise  to  12.8  per  cent  in  2018  Geographic  dispariIes:  in  2012,  youth  unemployment  rates  were  at:    

28.3%

IN THE MIDDLE EAST

23.7%

IN NORTH AFRICA

9.8%

IN EAST ASIA

9.3%

IN SOUTH ASIA

73.4 MILLION

YOUNG PEOPLE UNEMPLOYED

Who  generates  employment?  

•  Over  the  last  25  years  the  majority  of  private  sector  jobs  were  created  by  businesses  under  5  years  old    

•  In  fact  there  is  a  stronger  correlaIon  between  the  age  of  a  business  and  the  ability  to  create  jobs,  rather  than  the  size  of  the  business  

•  Moreover  new  and  young  companies  contribute  to  economic  dynamism  by  injecIng  compeIIon  into  markets  and  spurring  innovaIon    

Entrepreneurship  for  employment  creaIon  

Empretec contribute to job creation:

 Source:  Endeavor  2011  from  companies  across    LaIn  America  to  Africa,  the  Middle  East,  and  Southeast  

 Source:  Endeavor  2011  from  companies  across    LaIn  America  to  Africa,  the  Middle  East,  and  Southeast  

Entrepreneurship  and  new  innovaIve  firms  create  jobs  and  growth:  

•   Impact  assessments  from  the  Empretec  Programme  confirm  the  fact  that  invesIng  in  entrepreneurship  development  leads  to  job  creaIon.  

•   E.g.  In  Brazil,  entrepreneurs  who  benefi[ed  from  the  Empretec  workshop  generated  jobs  and  an  average  employment  growth  of  16%  per  year.      •   Likewise,  in  businesses  surveyed,  employment  grew  by  14%  in  the  United  Republic  of  Tanzania.    

Entrepreneurship and the Informal Sector in developing countries

Source: Schneider, Buehn and Montenegro (2010)

•  A lot of this entrepreneurial activity still happens outside the formal sector

•  The crisis has increased informality in many developing countries. Globally, the average size of the informal sector is estimated at 34.5% of countries’ official GDP.

Size of informal sector (% of official GDP)

Entrepreneurship  and    employment  creaIon  in  developing  countries    

•  Developing  countries  such  as  Mongolia  are  creaIng  new  opportuniIes  from  the  acIviIes  of  foreign  companies    and  internal  growth.    

•  But  in  order  to    seize  these  opportuniIes  the  local  market  and  SME's  in  parIcular  needs  to  have  the  sufficient  producIve  capacity.    

•  To  develop  this  capacity,  developing  countries  need  to  work  on:    –  Regulatory  and  insItuIonal  reforms  for  foreign  and  local  private  sector  development    –  Programmes  for  achieving  diversificaIon    –  Tackling  the  infrastructure  challenge  –   Building  knowledge  and  skills    –  Developing    financial  and  business  services    –  Unleashing  the  potenIal  of  tourism    –  PromoIng  niche  market  programmes    –   PromoIng  SME  development  and  entrepreneurship  for  regional  diversificaIon  

Entrepreneurship and the Informal Sector in developing countries

•  Entrepreneurship-friendly business environment reforms have helped to increase formal business registration, especially in developing countries …

Source: World Bank, Doing Business 2013

Entrepreneurship Policy Framework  

   

Pedro  30  years  

Pedro  10  years   16  years:  high  school  21  years:  no  advice:  look  for  

a  job  or  start-­‐up?  25  years:  dealing  with  the  admin  

26  years:  First  start-­‐up  HOT  DOGS  

28  years:    tough  to  access  credit  

Scared  to  fail  

THE  STORY  OF  PEDRO:  just  a  kid  in  Ecuador  today  Building an innovative and entrepreneurial country

Pedro-­‐  30  years  Entrepreneur  

Pedro-­‐10  Years   16  years:  Development  of  entrepreneurial  competencies  

21  years:  Bootcamp  on  Entrepreneurship  and  

Innova%on  

25  years:  Public  Private  Partnership  improving  business  

environment  

28  years:  Informa%on  to  create  innova%ve  

start  ups      

29  years:  Access  to  Finance  

 Network  support  

THE  STORY  OF  PEDRO  BY  20-­‐20  

Building an innovative and entrepreneurial country

The UNCTAD Entrepreneurship Policy Framework comprises 6 areas that have a direct impact on entrepreneurial activity

UNCTAD’s Entrepreneurship Policy Framework

Entrepreneurship development requires an enabling entrepreneurship eco-system

UNCTAD’s Entrepreneurship Policy Framework as a base to enhance the entrepreneurship

eco-system and formulating a national entrepreneurship strategy

•  Identifies policy objectives and options in the form of recommended actions •  Proposes checklists, case studies and good practices •  Provides an interactive online inventory of good practices •  Offers a user guide and methods for policy monitoring and evaluation •  Provides a set of indicators to measure progress

Malaysia: In its Vision 2020, and in the 10th Malaysia Plan 2011-2015 the Prime Minister identifies entrepreneurship as a key element to generate economic growth and achieve the goals premised on higher income, inclusiveness and sustainability.

Indonesia: Regional “Ease of Doing Business“ Benchmarks allow for more easily comparable conditions within the same country and creates peer pressure for reform

Jordan: Busines Development Centre hosts UNCTAD’s EMPRETEC programme for entrepreneurship development

www.unctad.org/epf  

Uganda: CELAC - Collecting and Exchanging Local Agricultural Content – Initiative distributes information to farmers using mobile phones

unctad.org/epf

Nigeria: public-private partnership to improve access to finance to Women owned SMEs

Uzbekistan: 2011 State Programme, “The Year of Small Business and Entrepreneurship”

www.unctad.org/epf  

1.  Understand what are the existing policies that promote entrepreneurship

2.  Evaluate the current business environment in which entrepreneurs start, operate and grow their businesses

3.  Define the overall strategy of entrepreneurship in terms of priorities, objectives and targets based on the gaps identified

4.  Design-focused initiatives to address gaps and achieve goals

5.  Regularly monitor and evaluate the impact of the policy to ensure the relevance and effectiveness of implemented actions

The UNCTAD Policy Framework in action and using it as a guide:  

1 month

Continuing Process

3-5 months

3-5 months

4-5 months

EMPRETEC:    Key  competences  of    

a  successful  entrepreneur  

UNCTAD  Programme  on  entrepreneurship  development  

What  is  EMPRETEC  

Empretec  is  a  United  NaIons  programme  established  by  UNCTAD  to  promote  the  

creaIon  of  sustainable  small-­‐  and  medium-­‐sized  enterprises  (SMEs).  Empretec  works  to  

support  entrepreneurs  to  build  innovaIve  and  internaIonally  

compeIIve  SMEs  

«emprendedores»  (entrepreneurs)  

«tecnologia»  (technology)  

EMPRETEC    

Program  evoluIon  

Program  was  first  introduced  in  ArgenIna  

1988  

2014  

340,000  graduates  35  countries  25  years  of  success  

Empretec  Centers  Worldwide  

UNITED STATES of AMERICA

CANADA

ALASKA (USA)

MEXICO

COLOMBIA

VENEZUELA

BRAZIL PERU

BOLIVIA

HONDURAS

NICARAGUA

ECUADOR

GUYANA

SURINAME FRENCH GUIANA

COSTA RICA

PANAMA

GUATEMALA

CUBA

PARAGUAY

ARGENTINA

URUGUAY

CHILE

GREENLAND

ICELAND

UNITED KINGDOM

REPULIC OF IRELAND

NORWAY

SWEDEN

FINLAND

DENMARK

ESTONIA

LATVIA

LITHUANIA

POLAND BELARUS

GERMANY

CZECH REPUBLIC

NETHERLANDS

BELGIUM

FRANCE

SPAIN

PO

RTU

GA

L

SWITZ.

AUSTRIA

SLOVAKIA

HUNGARY

ROMANIA

BULGARIA

ITALY

UKRAINE

TURKEY GREECE

SYRIA

IRAQ

SAUDI ARABIA

YEMEN

OMAN UAE

EGYPT LIBYA

ALGERIA

MOROCCO TUNISIA

WESTERN SAHARA

MAURITANIA MALI

NIGER CHAD SUDAN

ETHIOPIA

SOMALIA UGANDA

SENEGAL

GUINEA

LIBERIA

COTE D’IVOIRE

BURKINA

GHANA

NIGERIA

CAMEROON

CENTRAL AFRICAN REPUBLIC

GABON CONGO DEMOCRATIC REPUBLIC OF

CONGO

KENYA

TANZANIA

ANGOLA

ZAMBIA

NAMIBIA

BOTSWANA

ZIMBABWE

REPUBLIC OF SOUTH

AFRICA

MADAGASCAR

RUSSIAN FEDERATION

KAZAKHSTAN

GEORGIA

IRAN

UZBEKISTAN

TURKMENISTAN

AFGHANISTAN

KYRGYZSTAN

TAHKISTAN

PAKISTAN

INDIA

CHINA

NEPAL

MYANMAR

THAILAND

SRI LANKA

MONGOLIA

NORTH KOREA

SOUTH KOREA JAPAN

TAIWAN

CAMBODIA

LAOS

VIETNAM

PHILIPPINES

MALAYSIA

INDONESIA PAPUA

NEW GUINEA

AUSTRALIA

NEW ZEALAND

EL SALVADOR

DOMINICAN REPUBLIC

MAURITIUS

BENIN

JORDAN

Methodology  

   

Developed  by  Harvard  University  

Based  on  a  behavioral  approach  to  

entrepreneurship  

Concentrates  on  a  pracIcal  approach  to  

educaIon  

Training  by  changing  entrepreneurs    

mindset  PracIcal  tool  for  the  development  of    

Personal  Entrepreneurial  

Competencies  (PECs)  

Achievement  Cluster  

• Opportunity-­‐seeking  and  ini%a%ve  •   Persistence  •   Fulfilling  commitments  •   Demand  for  efficiency  and  quality  •   Taking  calculated  risks  

Planning  Cluster  

• Goal-­‐se]ng  •   Informa%on-­‐seeking  •   Systema%c  planning  and  monitoring  

Power    Cluster  

• Persuasion  and  networking  •   Independence  and  self-­‐confidence  

Personal  Entrepreneurial  Competencies  (PECs)  

Results  (Brazil  assessment)  

Higher  73%  

The  same  21%  

Lower  6%  

Annual  income  before  and  a`er  Empretec  

Higher  61%  

The  same  31%  

Lower  8%  

Profit  before  and  a`er  Empretec  

High  80%  

Middle  18%  

Low  2%  

Level  of  influence  of  Empretec  on  your  business  

Yes  88%  

No  12%  

Is  it  easier  to  get  a  job  a`er  Empretec?    

76%  Made  more  tax  payments  aier  compleIon  of  the  program.    

Reviews  «The  workshop  was  extremely  useful,  was  a  real  discovery  and  inspira:on.  It  demonstrated  the  lifestyle,  the  development  of  which  will  help  you  to  succeed.  I  think  that  the  main  thing  in  EMPRETEC  –  is  crea:ng  an  atmosphere  that  allows  you  to  understand  your  strengths  and  weaknesses,  as  well  as  the  path  of  cul:va:on.  The  program  has  changed  my  way  of  thinking  and  the  way  I  use  my  :me».  

 «I  had  the  opportunity  to  prac:ce  and  improve  many  of  my  business  skills.  I  realized  who  I  was  and  how  to  do  business,  how  to  set  different  goals  and  to  achieve  them».  

   

Thank  you  for  acen%on!  

For more information: www.empretec.net www.unctad.org http://unctad-worldinvestmentforum.org/ Contact: Alejandro.rubiashernandez@unctad.org