This week, the world is celebrating the Global Entrepreneurship Week. As the organizers are putting it:
For one week, millions of young people around the world will join a growing movement of entrepreneurial people to generate new ideas and to seek better ways of doing things. Dozens of countries are coming together for the first time to host Global Entrepreneurship Week, an initiative to inspire young people to embrace innovation, imagination and creativity. To think big. To turn their ideas into reality. To make their mark.
There are a ton of ideas circulated already – or thousands to be exact – among hundreds of organizations and individuals from nearly 60 countries. And not just ideas – but concrete projects and activities. There are things like the Global Innovation Tournament and Mentoring Maddness.
The way the event is organized and conducted is quite interesting – it makes entrepreneurship exciting. And its quite important, especially in places where upon graduating young people tend to look towards the public sector for employment, even if the public sector is not always up to task. Traveling around the world, its not uncommon to see young people who don’t think of private enterprise as an option. There are many reasons for this.
Sometimes its culture, family pressures, or education. Sometimes its skills or lack of financing. But oftentimes, its simply institutions.
The legal and regulatory barriers are not brought up in discussions on entrepreneurship as often as they should. We talk about innovation, risk-taking, business plans, financing, education, and many other things – all quite important. But we sometimes forget about the institutional barriers.
You may obtain the necessary financing, but in a corrupt society, where are the guarantees that your business is not going to be captured by someone else? You may come up with a great idea, but who can assure you that after jumping through numerous legal hoops you can actually get your license from a local agency. You may go through on an innovative deal, but who can guarantee that you will receive your payment if the court system does not function?
Legal and regulatory barriers – and economic and political institutions more broadly – are fundamentally important factors in entrepreneurship. In fact, our first project with Hernando de Soto 25 years ago focused on just that – removing hurdles to people’s participation in the economy so that the spirit of entrepreneurship can live and thrive. Much of it focused on taking people from “survival” entrepreneurship in the informal sector to business growth and development. For more on the program and accomplishments see here.
So my challenge for young people this week – come up with ideas on how you can improve the legal and regulatory climate in your country so that opportunities for entrepreneurship are plenty!