Transforming Entrepreneurship

A fraction of entrepreneurs accomplish their objectives, but what happens with that vast fraction that does not achieve acceptable result? The context they face is adverse while conventional entrepreneurship development operates with an elitist bias that does not help them. What type of entrepreneurs are we fostering? Is it possible to speak of entrepreneurs with transforming capabilities? New entrepreneurial development options exist that are worth supporting and there are diverse ways to implement them.

Entrepreneurial competence is of crucial importance not only from an individual perspective but also from social and systemic ones. Entrepreneurs mobilize their productive potential and hence they contribute to the development of their communities by generating new jobs, activating their network of suppliers, addressing clients’ needs, providing creativity and technological innovation, broadening the local market and tax base.

Entrepreneurial universe is not homogeneous; rather different type of entrepreneurs and diverse modalities and work ethics exist. Therefore, as we will explicit further along this article, it is crucial to promote actors that can work effectively, with honesty and responsibility towards their productive environment as well as the communities in which they operate.

Though new breeds of entrepreneurs constantly emerge, just a fraction of this universe achieves good results; those that have critical, needed factors to well structure, launch, and consolidate productive ventures, such as innovative ideas, determination, practical knowledge and/or professional knowledge, management and financial resources, contacts, information and especially linkages with productive networks in promissory sectors.

In this context (that territorially and temporarily differs due to the diverse circumstances in which entrepreneurial effort develops), critical questions arise:

(i) If just one fraction of entrepreneurs “succeeds”, what happens with the vast majority of entrepreneurs that “do not make it”?

(ii) What are the individual and environmental limiting conditions that each group face, not only as individuals but especially in terms of their immediate context?

(iii) What do “success”, “winning”, “making it”, mean for an entrepreneurial development?

(iv) Would there be one or various types of entrepreneurial development efforts? If there were a variety of entrepreneurial development types, as it generally happens in other venues of life, which would they be and why do we focus just on promoting a few modalities? Are we aware that by doing so, we leave aside a huge potential of entrepreneurial energy, willpower gets sterilized, hopes dry out, we lose the crucial contribution of diversity, we reproduce economic concentration with its burdensome social and political consequences?

(v) What other entrepreneurial development options are open to us? How can we assist, support and guide them as and if needed?

(vi) Can we talk about transforming entrepreneurship? Would it be possible to develop?

These questions guide the lines that follow.

Elitist Bias

Entrepreneurial development programs have an idealized vision regarding the universality of their approach. They proceed as if everybody who receives a good training and assistance will have a chance to succeed. In fact, what happens is that in the majority of the cases, that idealization does not fit in with reality: a fraction of entrepreneurs access good opportunities, manage to consolidate and grow, while the rest is cornered obtaining meager results or forced to leave the market.

In fact, the dominant approach of entrepreneurship development programs replicates the competitive, individualistic model that the hegemonic entrepreneurship culture imposes. It does not consider, and even less explicit, that its graduates will enter the markets that already exist, which are in essence of concentrated and concentrating nature. In those markets the abysmal gaps in economic power among actors give way to diverse mechanisms for extracting value that facilitate the concentration of results in few hands at the expense of those who do not manage to retain a good part of the value they generate. Thus, the capability of establishing and developing in a sustainable manner of a large fraction of entrepreneurs gets compromised.

Usually, entrepreneurs are exposed to highly aggressive, competitive values that influence their behavior. They consider that it is almost inevitable to displace others to impose their own project. The effects of that conception rudely focused on individual success upon themselves and society are not made explicit. Any success can have a more or less significant component of own merit, but it is also true that ultimately it is based on the efforts and accomplishments of many other members of their communities as well as on the prevailing local and international context.

Little to no value is assigned on reflecting about the sense and meaning of undertaking economic initiatives and, especially, on why it is critical to secure the general wellbeing that underlies our own wellbeing. Rather producers are molded into being avid at positioning themselves to profit as much as possible. For them, the level and speed of accumulation expresses the degree of achieved success and, giving that only a fraction of the universe makes it, the level of frustration ends up being enormous and quite negative their effects onto the social dynamic and cohesion.

Thus, the hegemonic approach on entrepreneurial development has a clear elitist bias that favors a fraction of economic actors who managed to establish and consolidate themselves owing to their own ability, positive environment, and/or access to assistance and contacts. It is worth repeating that the rest, a vast majority of entrepreneurs is added up to the universe of people who just barely survive as and how they can.

The Adverse Setting where Entrepreneurs Tend to Operate

Generally, in our societies entrepreneurs operate in adverse settings, facing quite a number of hurdles, barriers, and restraints; various factors explain that. Just to start, the vast majority of entrepreneurs lack own resources (even worse for those who belong to popular sectors) and, unlike to what happens in affluent countries, families and friends have low capacity for financially assisting them and opening facilitating doors. With a few exceptions, Southern countries do not count on good support systems for small not even medium producers; a reality that is very slowly improving but that still cannot compare with the comprehensive support systems that exist in other latitudes. The tradition of “angel investors” in almost unknown; therefore the first-stage support to promissory emergent endeavors is scarce and highly selective. Neither investment funds abound that could substitute angels when endeavors successfully pass through the threshold of initiation and first consolidation.

This way, our entrepreneurs start and develop in scarcity conditions of those factors that make for the economic, technological, financial and managerial viability of a productive unit. There is another no less aggravating factor: entrepreneurship attitude is not widely spread. A vast number of our entrepreneurs emerge by discharge when they do not get jobs because they have been culturally conditioned to first try to get employed in existing companies without considering the possibility of building one of their own. When they finally do so, it is because they are forced to that venue by unemployment and the need to survive somehow.

Savages Entrepreneurs and Responsible Entrepreneurs

Either by necessity or training, most of our entrepreneurs replicate the prevalent entrepreneurial model in our contemporary world; that one that states that each of us must find rescue on its own account without considering if he/she is undermining or taking advantage of others. This attitude is based on the false belief that an accentuated individualism will automatically lead us towards the general wellbeing. The concentrating nature of contemporary markets is not made explicit nor is how they operate and condition individual actions and their consequences.

The vast majority of key markets are oligopolistic in nature, where a few actors that control prices and commercial dynamic have the ability to extract a huge part of the value generated by others. In most cases, the products that are offered do not contribute to the general wellbeing but rather serve consumerism of affluent sectors or middle classes that emulate them. In the maelstrom of producing to satisfy a concentrated demand, basic needs of the majority are not met. Scarce resources (some non-renewable such as gas and oil) are used for frights, packaging and labeling, presentations and other items that do not affect the essential or naked value of each product; what ends up deteriorating the already severely harmed environment.

Cycles of concentrated accumulation are continuously reproduced. Surpluses, instead of being assigned to support saving and investment processes oriented towards general wellbeing, swell huge fortunes that mostly pours them into what yield them financially the most without considering burdensome externalities of their investment decisions, allegedly unwanted but foreseen.

In this context, there is no sense in keep generating “savages” entrepreneurs. Rather new challenges come about promoting entrepreneurs which are effective, determined, skill and, at the same time, responsible for the effects of their actions removed from greed, egoism, disdain for others.

Diversity of Approaches and modalities of Entrepreneurial Development

Sometimes for external imposition others because our minds have been colonized by the hegemonic thought, we have been compelled to accept a single way of understanding and practicing entrepreneurial development. It is as if we forced entrepreneurial creativity—the different responses that exist to facing always singular situations—to subordinate themselves to the hegemonic thinking to be validated. That ideological filter sterilize a large range of other possible solutions imposing approaches presented as unique truths, even though if later they cannot answer the critical contemporary challenges we face.

Nowadays, entrepreneurial development goes beyond the individualistic model even when the latter could still be useful for a fraction of the entrepreneurial universe. The point is that there are other effective entrepreneurial modalities to mobilize and integrate broad popular sectors, such as, people base franchises, workers’ enterprises, cooperative holdings, suppliers associations, communal trading facilities (including market hubs, itinerant and settle trade fairs, and communal supermarkets), locomotive agro-industries, service centers for small family ventures, export consortiums.

All these entrepreneurial development modalities comprise economic ventures with transforming potential. While with their own identities, these endeavors generally aim at integrating small, dispersed producers in middle-size ventures making them partners in management and ownership together with selected strategic partners. They also call in private and public actors, scientific, social, and development organizations to participate in governing and consulting boards to profit from their expertise and support.

Support Systems for Transforming Entrepreneurship

These support systems can follow different designs depending upon specific circumstances of each country; nevertheless, they need to account for strategic areas of interventions, such as:

(i) Promotion of Endeavors with Transforming Potential Diverse actors can foster the emergence of new and better endeavors with transforming potential: development organizations, local authorities, universities and technological institutes, enterprises, social movements, among others. We have to make the nature of these endeavors known within the communities, how they can be structured, their advantages and challenges, the support they can mobilize. The ultimate goal is to identify who could be interested in participating in the process of establishing specific endeavors with transforming potential.

(ii) Comprehensive Assistance for Endeavors with Transforming Potential The required assistance can be provided by developer units specially conformed to assist in the establishment of endeavors with transforming potential. Developers can be structured as either private or mixed entities, with sound connections with the scientific and technological communities. They should be conducted by very qualified ((excellence)) teams with a triple expertise: the business world, social inclusion, and working within multicultural environments. Their work consists on identifying promissory people based economic opportunities and organizing the way to effectively seize those opportunities; for that they address aspects such as endeavors’ structure, organization, training and couching, financial and commercial management, access to markets and selection of strategic partners.

(iii) Trust funds specialized in endeavors with transforming potential To round up an effective and comprehensive support system, it is critical to have an investment facility especially dedicated to this type of ventures. That source could be shaped as a trust fund authorized to raise public and private capital that would allocate in endeavors with transforming potential using different investment modalities (ordinary or preferred shares, participations, among others). They would remain invested in the selected endeavors until they mature and their owners (popular sectors and strategic partners) could buy back the original investment. The trust fund could establish local representations, adopting in each case investment criteria consistent with the need to transform and secure sustainability to the productive matrix of each region. Socioeconomic and environmental viability of every investment request would be evaluated to then reject or accept it. Each regional developer would assist investment applicants to help them structure the investment and business plan. Investment decisions of the trust would reinforce credibility of recipients, facilitating their access to public and private credit.

Conclusions aligned with the initial questions
- Nowadays, those who do not receive necessary support to undertake in good conditions a new ventures are simply left cornered in marginal spaces of non-promising sectors. Conventional entrepreneurial development suffered an elitist bias focused on “skimming” a certain number (usually small) of the initiatives they identify. Vast popular sectors are left aside with their urges, cravings, needs but also their talent and fulfillment capabilities.

- The individualistic model of entrepreneurial development could serve requests of a fraction of entrepreneurs, and that too has its merit. It is not worth to antagonize with what they do especially when there are some pioneers who promote solidarity values among the entrepreneurs they work with.

- However, the most significant challenge in contemporary entrepreneurial development is to support the inclusion of popular sectors in medium size ventures with transforming potential that could become part of productive chains in promissory sectors

- This requires large scale and, at the same time, decentralization of interventions; a massive action with wide territorial coverage is needed. It also calls for private, public, social movements and development organizations’ participation, as well as singular treatments according to specificities of each situation. It is non-effective to try homogenizing answers as that hardly restricts innovation and creativity of the local talent.

- There are already available new options for entrepreneurial development and diverse ways to implement them. Those options represent transforming answers oriented towards obtaining full productive and social inclusion of popular sectors without subordinating to any hegemonic approach. AS they become significant socioeconomic spaces, their actions will directly impact on social and territorial inequality, domestic supplying and inflationary pressures, the local reinvestment of results, a higher added value in the productive matrix and a more open structure of local power, among other critical issues.

These approaches on transforming entrepreneurship open up a vast venue of opportunities to deepen inclusive developments, taking advantage of experiences and innovations that praxis will expand and improve. It is worth facing these opportunities, it is possible to materialize them, need to act.

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