Author Archives: Guest

A New, Entrepreneurial Growth Model for South Korea

Korea's rapid economic ascent over the past few decades was powered by huge conglomerates like Samsung.

Korea’s rapid economic ascent over the past few decades was powered by huge conglomerates like Samsung. Now the country is aiming to encourage more startups and entrepreneurs.

By Tyler Makepeace

The Republic of Korea is one of the greatest economic development success stories in history — going from one of poorest countries in the world and a major aid recipient to a high-income country and a major aid donor in just a single generation. Both the head of the World Bank and the United Nations claim Korea as their birthplace.

The “Miracle on the Han River” which led to Korea’s stunning economic growth was based on an export-oriented industrialization model, similar to that of Japan, Taiwan, and later China. However, this model of fast growth has now run its course, and for Korea to continue onto the next stage of economic development it will require a different model for economic growth based on an innovative society.

In response to this need, President Park Geun-hye announced in her 2013 inaugural speech the beginning of the “Second Miracle on the Han River” through a new policy called the Creative Economy. This initiative seeks to create a supportive ecosystem for entrepreneurs and SMEs, especially in the tech sector, in order to boost job creation and pursue greater economic democratization within the country.

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Strengthening Entrepreneurial Skills among Women in Nicaragua through Mentorships

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This post was written by REN Nicaragua. 

Watch a women’s entrepreneurship Google Hangout featuring REN founder Lucy Valenti.

UNDP research shows that in Nicaragua, young people face an unemployment rate twice as high as the adult population. Young women also face much higher rates of unemployment (46% unemployed female vs 16.8% unemployed male). Moreover, the leading cause for unemployment in the country is a lack of work experience.

Recognizing these difficult challenges faced by women in Nicaragua, the Red de Empresarias de Nicaragua (REN) works to overcome them. With a vision of increasing women’s economic and social development, REN is a professional network representing over 200 women-owned businesses which focuses on developing women’s entrepreneurial capacity and skills.

In July 2014, REN launched the CIPE supported, nine-month program “Strengthening Entrepreneurial Skills among Women in Nicaragua.”  Following a successful five-month pilot phase, this is the second program of its kind led by REN.

The program’s main objective is to encourage entrepreneurship among young women and strengthen the capacity of women micro-entrepreneurs through mentorships. The two groups of beneficiaries for this initiative are female university students and emerging women micro-entrepreneurs, and they are all paired with successful businesswomen. REN matched ten teams (each mentorship team consists of a micro-entrepreneur, mentor, and an intern) for this project.

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Building a Network of Women Entrepreneurs in Serbia

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By Olivera Popović

While the global economic crisis in 2008 affected many countries worldwide, the shock to Serbia’s society and economy was magnified due to the ongoing transition processes there. For the past fifty years, women in Serbia were most often employed in the public sector as part of Yugoslavia’s socialist planned economy. In the past two decades, the transition from socialism to liberal capitalism and an open market economy has initiated changes in approaches to work and ultimately led to a greater presence of women in business.

In making this transition, women face an uphill battle – in gaining greater access to capital, technology, networks, and acquiring the knowledge to start and grow their businesses. On top of those challenges, the social and economic landscape is characterized by poor labor market outcomes, a high youth unemployment rate, and large long-term unemployment. According to the Regional Cooperation Council (2013), the country’s per capita GDP is currently only 38 percent of the EU average.

Data from the International Labour Organization (ILO) shows that the overall unemployment rate in Serbia is 23.9 percent, with almost 25 of women unemployed. Youth unemployment is remarkably high (51 percent) and even more astonishing, 57 percent of young women are out of work. Equally important, universities in Serbia do not foster enough entrepreneurial spirit among students. Consequentially, students fail to fully consider entrepreneurship as a viable career option.

Recognizing this need for support to aspiring and established women entrepreneurs in a complex economic situation, the Association of Business Women in Serbia (ABW) created “Inspiring Women Entrepreneurship,” a project to strengthen the leadership and entrepreneurial capacity of young women in Serbia.

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To Benefit from Energy Resources, Lebanon Needs Better Institutions, Not Just Greater Transparency

A map showing the offshore areas being opened to oil and gas exploration. The auctions have been repeatedly delayed.

A map showing the offshore areas being opened to oil and gas exploration. The auctions have been repeatedly delayed. (Photo: Deloitte)

By Sami Atallah

A paradox confronts countries endowed with oil and gas resources. Despite their riches, these countries tend to grow slower in the long term, have higher income inequality, be more corrupt and even become authoritarian. This, of course is not the fate of all such countries — many have managed to turn the oil curse into a blessing. Those that did had two things going for them: a high level of human capital and good institutions that upheld checks and balances on power.

Although Lebanon is well endowed with human capital, its institutions are generally weak. The Taef agreement redistributed power more equally across the three key institutions — the presidency, the parliament and the prime ministership — that are associated with the three dominant sects, and in many ways, undermined the political system.

For one, the executive authority became diffused to an extent that it is no longer obvious who is in charge. The members of the parliament seem less interested in legislating and holding executive authority accountable and more interested in providing services to constituents. The political parties have mastered the game of electoral survival by crafting election laws through redistricting and vote counting in ways that get them reelected with little to show for. They have resorted to clientelistic strategies of buying votes and providing services in return for political loyalty. Furthermore, the judiciary and the oversight agencies whose job it is to hold the government accountable were at best sidelined but most often intentionally weakened through political interventions or bureaucratic understaffing.

In sum, the political elite govern the country largely by the logic of dividing the spoils among themselves through illegal subcontracting of projects, violating tendering requirements, as well as contracting companies despite conflicts of interest. This has resulted in high levels of corruption, embezzlement, mismanagement and waste benefiting the political elite at the expense of the rest of the population.

It is against this backdrop that the Lebanese Petroleum Administration (LPA), the body entrusted to govern the oil sector, came into being. Between November 2012 and August 2013, the LPA proceeded rather efficiently and with more transparency than most Lebanese institutions in approaching the sector. It held consultative meetings and workshops, and managed to lay the groundwork for the launch of the offshore licensing round. Now it is waiting on the government to pass the last decrees for the process to continue, and has found itself caught up in the Lebanese political mill with no clear way out of the deadlock.

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Five Lessons from CEOs at the Corporate Citizenship Conference

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By Mark Horoszowski

Earlier this month at the U.S. Chamber Foundation’s Corporate Citizenship Conference, CEOs from diverse organizations gathered for a Plenary Panel titled “Lessons From the Top”. The CEOs represented a variety of industries and include the YWCA (non-profit), United Nations Foundation, and two socially-minded for-profits: Starfish Media Group and Reserveage

These are their five lessons:

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Mongolia Must Improve Its Institutions to Avoid the Resource Curse

mongolia-mine

By Dash Enkhbayar

The West tends to illustrate Mongolia as an “example of a developing country that, despite the odds, managed to accomplish a peaceful transition to democracy.” However, simply achieving an electoral democracy does not complete a country’s democratic transition. Recent years have shed light on the major institutional flaws that still exists in the country’s public and private sectors.

Sandwiched between China and Russia, Mongolia has been attracting significant attention for the past couple of years due to its rapid economic growth and burgeoning mining sector. It recorded the world’s fastest GDP growth rate in 2011 at 17 percent, which put Mongolia in the international spotlight for investment opportunities.

But corruption, poor governance, and unstable government regulations threaten Mongolia’s economic potential. In 2013, due to unfriendly investment laws such as the Strategic Entities Foreign Investment Law, foreign direct investment (FDI) in Mongolia plummeted by 48 percent, which effectively scared away many investors interested in the nation. Mongolia is, in fact, not a model democracy that it seeks to invoke. Instead, the last few years have demonstrated that unless Mongolia seriously starts tackling its institutional weakness it may succumb to the “resource curse,” in which a country with an abundance of natural resources experiences poor economic growth and a worsening political climate.

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Moving Beyond the Bi-Polar View of Doing Business in Africa

New buildings in Gabarone, the capital of Botswana -- one of the most developed and fastest-growing economies in sub-Saharan Africa.

Gabarone is the capital of Botswana — one of the most developed and fastest-growing economies in sub-Saharan Africa.

By Naledi Modisaatsone

Economic improvements and a wealth of opportunities for business in Africa have led to an increased focus on the continent. Over the past three years Ernst & Young’s Africa attractiveness reports have highlighted the continent’s steady rise. Their research provides some quantitative substance to the growing perception that African markets offer an exciting growth and investment opportunity.

Africa’s growth prospects differ not only country by country but also sector by sector. For example, agriculture is Africa’s largest economic sector, representing 15 percent of the continent’s total GDP, or more than $100 billion annually. It is highly concentrated, with Egypt and Nigeria alone accounting for one-third of total agricultural output and the top ten countries generating 75 percent.

Africa’s banking sector has also grown rapidly in the last decade. Sub-Saharan Africa has become a substantial player in emerging-market banking, with total 2008 assets of $669 billion, while North Africa’s asset base has grown substantially, to $497 billion. Africa’s banking assets thus compare favorably with those in other emerging markets, such as Russia (with $995 billion).

However, the Ernst & Young reports also highlight a lingering perception gap between companies already doing business on the continent and those with no business presence there. The respondents with an established business presence in Africa are more positive about the continent’s prospects and rank Africa as the most attractive regional investment destination in the world today. They view it as an exciting, dynamic, high-growth market. In stark contrast, respondents that have not yet invested are negative and rank Africa as the least attractive regional investment destination in the world.

The African business community should spend some time on this issue at the US-Africa Business Forum. It is their responsibility to debunk the myths that some external investors have about operating a successful business in Africa. These business leaders are successfully embracing Africa’s uncertainty, complexity and volatility, understanding that these are common challenges across most emerging markets.

They are actively balancing the three tensions that all companies face in doing business in emerging markets: long-term versus short-term focus, profit-taking versus sustainable growth, and managing the whole versus optimizing the parts. Most importantly, their companies are establishing strong competitive positions in key markets and are poised to benefit from the continued growth anticipated over the next decade.

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