The founder and president of the Global Entrepreneurship Network or Global Entrepreneurship Network (GEN), Jonathan Ortmans, analyzed the entrepreneurial ecosystem of Peru based on the social, economic, cultural, political and regulatory conditions that affect the creation of new dynamic companies, “Which are the ones that contribute most to economic growth and innovation”, he said.
Ortmans, who participated in the recent Global Entrepreneurship Summit (GES 2019) in the Netherlands, reviewed these aspects with Management through the GEN-PRODEM study, also known as the Dynamic Entrepreneurship Index.
Peru is ranked number 8 in Latin America (from 15 countries) and 49th in the world ranking (from 60 countries). The total index value of the country is 29 points (out of 100 possible points), which means that it is positioned in the mid-low range.
For the president of GEN, a platform that promotes the strengthening of ecosystems for entrepreneurs in 170 countries, Peru has key strengths to take advantage of, including the country’s demand conditions, where it occupies the 20th position globally, as well as its entrepreneurial culture, where it occupies the 22nd position in the world.
What does Peru show?
The economist Jonathan Ortmans launched in November 2008 the initiative “Global Entrepreneurship Week” or Global Entrepreneurship Week (GEW), of which Peru is part.
“It is also worth noting that Peru shows progress in public policies and regulations (48 points out of 100) due, in large part, to initiatives that the national government has been implementing in the last four years, such as the programs of the Ministry of Production : “Innovate Perú”, “Start Up Perú”, an incubator program and a network of regional revitalization programs and angel investors. So he is working to strengthen several elements of the ecosystem”, he noted.
Ortmans, who lives in Washington, DC, recalled that the Inter-American Development Bank (IDB) recently conducted an exhaustive evaluation of Innovate Peru and the government shared the results with Latin American members of the Startup Nations policy network at a recent meeting in Montevideo of the Public Policy Managers Network, which “shows that the government is open to comments and, more importantly, is committed to improving its programs and creating a portfolio of young businesses with growth potential”.
On the other hand, Peru’s greatest weaknesses lie in its science, technology and innovation platform, with only 6 points (out of a total of 100 possible points), a very common and persistent ‘weakness’ in Latin America, and also presents shortcomings in terms of business structure (17 points) and social capital (21 points).
As for entrepreneurial human capital, Peru ranks fourth compared to the other 14 countries that were examined in Latin America, but it is number 39 worldwide. “The programs of UTEC Ventures and the Universidad del Pacífico are helping to advance in this aspect, particularly for entrepreneurs in Lima,” he said.
Habitat to undertake and scale
Ortmans describes entrepreneurial ecosystems as complex systems that grow organically and are difficult to guide because they naturally emerge, integrating committed individuals who do not belong to an organization but have common goals.
“It is a habitat for entrepreneurs to grow rapidly when interacting with investors, other entrepreneurs and institutions that provide support. It’s more a metaphor, because in appropriate environments, ‘life’ is much simpler for new businesses. However, it should be understood that it is only a comparison because there is not a virtuous entrepreneurial ecosystem everywhere, ”he said.
In these holistic, systemic and unpredictable ecosystems, inspiration emerges along with the stories.
The role of the government
For the expert, the political situation in each country influences how entrepreneurial ecosystems are built and how much support they receive from governments. However, GEN’s experience also shows that startups have been able to form small communities that celebrate their successes among themselves and do not need large amounts of capital to start operating.
“This reflects that the entrepreneur’s profile is now more versatile and associative. Your social position, educational level or place of origin no longer matters; At the end of the day, if the person has a good idea and finds a way to create a business model, they will take risks and look for ways to materialize it”, he said.
Ortmans recommends that entrepreneurs first set a goal with their mind in mind if they are going to solve a problem or respond to a need. Second, he suggests working as a team with creative people who contribute disruptive ideas and have knowledge to convert such an idea into innovation. And third, before launching the company, it advises to test this business idea several times.
“Do not borrow money and do not compromise your assets when you are starting your business, unless you are absolutely sure of the return you can get as a company”, he adds.
Finally, it is recommended not to pay for things that can be obtained for free, for example, a free space to start, online educational courses, social media management, among others, and do not forget that the biggest limitation for entrepreneurs is not the Money, but time.
Also published on Medium.