By Hanna Rhodin
How do you go about starting a business when you lack the education or financial means? The answers often depend on the region, country, or city you live in. In early 2015 I traveled to Beira, Mozambique to volunteer with Care for Life, an NGO working with a holistic approach to assisting families in low-income communities. Part of this approach was to enable individuals to take charge of their own livelihood by establishing a small family business. This included their work with starting associations and mutual businesses — the latter being a 10-step process which many do not know how to undertake.
Registering a business should not take more than a few weeks (or, in more developed countries, a few days), yet during the two months I was working with these associations the process proved to take longer than that. For various reasons, several did not complete it and were still working on it as I completed my time there.
The Nordic concept of Janteloven mirrors some cultural attitudes in Latin America — yet the Nordic countries have still managed to build strong entrepreneurial ecosystems.
Entrepreneurs continue to face strong cultural challenges in Latin America. Risk aversion is particularly common in the region, and thus many youth lack the confidence to start their own businesses for fear of failure and the associated consequences. Would-be women entrepreneurs often must deal with machismo, or male dominance, in economic matters.
Additionally, Latin American cultures tend to be very community-oriented, and it is a common belief throughout much of the region that entrepreneurs are in business to make money only for themselves and are thus “abandoning” their communities, which has cast a negative light upon the concept of entrepreneurship. Moreover, strong pressures to conform to social class expectations often discourage young people from trying to improve their lives through entrepreneurship.
Latin America is not the only region in which cultural factors have hampered the development of entrepreneurship. Entrepreneurs still face sizable cultural obstacles even in regions where entrepreneurship has been able to flourish. This is especially true in the Nordic countries: Denmark, Finland, Iceland, Norway, and Sweden.
As someone who has straddled the Latin American-Nordic cultural divide his whole life, I have witnessed firsthand that while Latin American and Nordic cultures are very different in a variety of ways (just try making small talk while waiting for a bus in Copenhagen or foregoing cheek kisses upon meeting people in San Juan), in both cultures there are norms that encourage social conformity while stifling individualism. While these rules are unwritten and thus are not immediately apparent to outsiders, the social consequences of going against these norms can be severe.
P@SHA workshop with Jawwad Ahmed Farid (center) and Karachi School for Business & Leadership students.
What are the necessary steps to take an idea from conception into a commercial reality? How do you strategize and pitch a business idea to a potential investor? How do you select good talent and put together a team? According to CIPE partner Pakistan Software Houses Association for IT & ITES (P@SHA), young aspiring entrepreneurs in Pakistan are full of questions like these.
Entrepreneurs are desperately needed for Pakistan’s future. The country currently faces two significant challenges: a youth bulge and a slow growth.
Today, youth under the age of 30 make up an astonishing two-thirds of the total population. Coupled with this is a slow economy—Pakistan is experiencing limited GDP growth—and the business community and the public sector simply cannot provide enough jobs for employable youth. As a way to address these issues, P@SHA led an eight-month youth entrepreneurship program targeting university students in the technology field.
Inventors tried hundreds of designs to make flying machines practical.
Looking at the glittering corporate campuses of booming technology startups in places like Silicon Valley, Boston, or North Carolina’s Research Triangle, it is easy to see nothing but success. But one of the secrets of entrepreneurship is that all of these successes are built on a culture that embraces failure.
It is a surprising truth borne out again and again by business researchers: the places where entrepreneurs have the most success are the ones where it is least painful for entrepreneurs to fail. Only a system that allows individuals to take great risks will see the great rewards that come from truly path-breaking innovation. As Jonathan Ortmans puts it, “the ideal environment for innovation not only celebrates success, but also accepts—if not encourages—failure.”