The recipe for economic growth

Date: Aug 26, 2008 | Author: Santiago B. | Categories: Entrepreneurship, Non Profit

When the goal is to promote the economic growth of a country there is abundant research that shows that very few factors weigh as heavily as the birth of new businesses founded by entrepreneurs.

That is why in the last 10 years I worked with Endeavor to promote entrepreneurship and that way improve the Economy of my country.

Recently we have been having a debate inside Endeavor that I would like to share with you to promote a discussion.

If you had to choose, where would you focus your effort:

a) In helping excepcional extrepreneurs, with a very high level of preparation and networking, who have the potential to found very large companies and be role models, but who at the same time need less help or, put differently, have a decent chance of being successful without any additional support.

b) In helping “regular” entrepreneurs, whose ability, networking and even business model make it unlikely that they will create a very large company, but with proper help can succeed to create medium sized (end eventually some large) businesses and who would be significantly more likely to fail if left on their own.

Even when it is not strictly mandatory to choose, organizations like Endeavor need to define their focus. Mi heart has always been with the second choice: Helping those with whom we can certainly make a difference in the destiny of their projects. But we shall not lose sight that beyond the help given to the entrepreneur, the true goal is to promote economic growth as a requisite to the prosperity of the population as a whole.

This week I got an article from the Financial Times titled “All of the effort with none of the impact” which discusses the findings of a book that postulates that all economic progress is generated by entrepreneurs in group a) and that the b) have no impact at all.

Quoting Luke Johnson: afirma (traducción mía): “the entrepreneurs who matter economically are the select few who start innovative, super-successful firms. These tend to be the larger, well-capitalised projects planned by professional teams, not sole operators. All the other small new businesses created every year are pretty irrelevant in terms of job creation and value added.”. Later on he states: “The author’s theories, if correct, have serious consequences for public policy. They suggest government agencies should scrap efforts to encourage so many people to start their own firms. Instead, we should devote more energy to supporting the small handful of early-stage companies that could become the next Google or Dyson. Hence national resources need to be focused on backing scarce, highly ambitious, productive firms that have a real chance of making it big. Unfair perhaps, but probably sensible.”

My experience working as an entrepreneur in Officenet and accompanying the processes of many others make me think otherwise. I was always convinced that the true mission of Endeavor is to support those entrepreneurs on which we can have a big impact in their chances of success or failure. In all these years I could witness the creation of high quality jobs and the emergence of great companies, which in small or medium scale somewhat transformed the reality of my country.

I find it hard to believe that the sum of all these many grains of sand turns out to be nothing, instead of a mountain.