Global Entrepreneurship Ministers to hold first meeting in Milan

What new approaches can governments implement to leverage entrepreneurs as allies for job creation and economic growth? Ministers responsible for such policies from around the world will soon gather in Milan at the Global Entrepreneurship Congress (GEC) to explore this very question. Leaders will share ideas and experiences about how to better enable entrepreneurship, new enterprise formation, and SME growth overall.

While the GEC has traditionally been a massive gathering of entrepreneurs, investors and startup support programs, participation from governments — one of the feeders of entrepreneurial ecosystems – is on the rise. It is not clear if this is because startups are fun and dynamic or whether this awakening by decision-makers has been driven by greater awareness of the data on new firm formation and economic growth.

The first-of-its-kind Ministerial for the GEC will be led by Maria Contreras-Sweet, the Administrator of the U.S. Small Business Administration.  She will be joined on the podium by Federica Guidi, the Italian Minister for Economic Development, who also has extensive private sector experience having served as CEO of a global engineering firm.  They will be joined by the likes of Gordan Maras, Croatia’s Minister of Entrepreneurship and Crafts, and Enrique Jacob Rocha, the President of Mexico’s new agency the National Institute of the Entrepreneur, among others.

As technology has broken barriers to connectivity around the globe, the potential for small and growing enterprises to have an outsized impact on national economies has never been greater. Governments have a renewed role to play in creating the conditions necessary for enabling today’s tech-savvy business founders to pursue new ways of bringing innovative products and services to market, both locally and globally.

The Ministerial is designed to allow Cabinet-level decision-makers  a unique opportunity to side step their usual agendas with each other around issues like trade barriers, and share information about emerging best practices in domestic policymaking and programming within highly diverse entrepreneurship ecosystems.  The goal is that these government leaders will return home with new ideas for spurring new firm formation and supporting small business.

While it is easier than ever to connect with people in all corners of the globe, there are still very few global forums in which the high-level officials responsible for entrepreneurship can learn from one another and, potentially, join forces in developing our one global entrepreneurship ecosystem.  The value proposition of today’s existing multilateral economic forums is questionable.  They may be suitable vehicles for negotiating trade deals, but not for adopting the global economic imperative of finding more effective approaches to stimulate new firm growth.  This requires open source collaboration not secretive economic negotiation.  All boats rise when economies generate more new firms.

While the Ministerial agenda for Milan is being set by the leading Ministers present and still be further defined by staff, here are some of the questions likely to be raised:

Government and the entrepreneurship ecosystems

What are smart ways for government to catalyze enterprise formation and growth without trampling on the chaotic nature of entrepreneurial dynamics?  What processes can governments use to develop the right mix of rules, regulations and incentives to create a thriving entrepreneurship sector?  Is there a government succeeding or failing in this regard?

Fostering young and growing businesses 

What approaches have worked (evidenced effectiveness) and what could work in the future (policy experimentation)?

Supporting innovation 

How can governments level the playing field for anyone anywhere at any time to start and grow a business that sells to anyone anywhere at any time?

Open Competition

How can governments promote competitive markets in which new entrants are not crowded out by large existing firms.  This is a particular problem in many emerging markets where certain economic sectors, such as telecommunications remain dominated by monopolies.

 

The Ministerial at the GEC in Milan will be followed by an open GEC Research + Policy Summit, and a meeting of the Startup Nations group – a collection of startup-savvy policy advisors driving the development of new policies targeted at new firm acceleration.  The broader discussion around stimulating entrepreneurship should build a team atmosphere of leaders and feeders from all elements of the ecosystem, working together on a common goal.

 

Startup Experience joins GEN to educate young entrepreneurs

Startup Experience, a hands-on training program that helps high school and college students build new ventures, joined forces today with the Global Entrepreneurship Network (GEN) to reach aspiring young entrepreneurs in more than 150 countries.

The program is aimed at improving the way that entrepreneurship is being taught in schools around the world. It was launched in 2012 and developed in collaboration with educators from leading universities and experienced entrepreneurs from Silicon Valley.

“In today’s society, we all need to cope with constant change and great uncertainty,” says Henrik Scheel, founder and CEO of Startup Experience. “It is crucial for young people to adopt an entrepreneurial approach to life and become proactive about creating their own opportunities. Startup Experience gives everyone the creativity, confidence and capabilities they need to solve any challenges that come their way.”

The program promotes a six-step process to: Identify an opportunity; understand the user; discover the right technology; generate ideas; create and test a scalable business model and finally; prototype and pitch your new startup.

With offices in San Francisco and Denmark, Startup Experience currently has programs running in 15 countries on five continents. By teaming up with GEN, it immediately gains access to the startup communities and champions that built Global Entrepreneurship Week in more than 150 countries. Scheel will demonstrate Startup Experience in Milan this March where he will run several intensive workshop modules as part of the upcoming Global Entrepreneurship Congress (GEC).

The GEC is a gathering of entrepreneurs, investors, researchers, policymakers and other startup champions who work together to help bring ideas to life, drive economic growth, and expand human welfare. It is scheduled to run from March 16-19 and registration is currently open at gec.co.

25,000 events, 150 countries, 1 week.

Global Entrepreneurship Week is now celebrated in 150 countries by millions of participants through more than 25,000 events and competitions, Global Entrepreneurship Week is the pump fuelling an emerging network dedicated to helping entrepreneurs start and scale new businesses.

From the opening ceremony in Athens, Greece, to the official closing at the Startup Nations Summit in Seoul, Korea, GEW provided something for everyone. Inspirational speeches from successful entrepreneurs to encourage future founders. Pitch competitions to help entrepreneurs sharpen their skills and compete for resources. Networking sessions to connect nascent entrepreneurs with potential collaborators, mentors and investors. Summits and roundtables to explore effective policies and programs to promote entrepreneurial growth. And more.

Cities of all sizes around the world hosted multiple events throughout the week. Kansas City, home of the Kauffman Foundation which founded GEW in 2008, held an impressive 70 events for a mid-size city (population 450,000). Topping the charts for the world’s largest cities is London (population 8.3 million) with an amazing 240 events.

Additional facts and figures will be made available through the GEW Impact Report that is scheduled to be released at the Global Entrepreneurship Congress next March. In the meantime, here are just a few of the highlights:

Creative Business Cup

Creative entrepreneurs from more than 50 countries pitched their projects to an international jury during the Creative Business Cup finals in Denmark, as part of a three-day celebration of entrepreneurs in creative fields. CTAdventure, a Polish startup re-imagining education by involving users in a creative learning process in important areas such as chemistry, physics, and maths using modern technology like augmented reality, took home the top prize.

Get in the Ring

After battling some of the world’s most promising startups in one-on-one pitch battles, Indonesian startup eFishery won the Get in the Ring global finals in the Netherlands last week. The startup takes a data-driven approach to automatic fish feeding. Its smart aqualife feeding system can sense the fish’s appetite and be monitored and controlled through a smartphone or tablet connected to a network. The product is aimed toward large-scale hatchery operations that require efficient feeding solutions.

Global Entrepreneurship Index

A new Global Entrepreneurship Index that ranks 130 countries on the strength of their startup ecosystems and plots the data on interactive maps was a main topic of conversation at policy-driven GEW events in places like Seoul, Korea where the Startup Nations Summit is still winding down Global Entrepreneurship Week with leaders from 45 Startup Nations efforts among 2,500 participants.

Global Entrepreneurship Policy Survey

Each year, GEW Global conducts a survey of current and potential high-growth entrepreneurs to better understand the local climate to start and scale firms in more than 30 countries around the world. The GEW Policy Survey is currently collecting data in 19 languages. Results will be presented during next spring’s Global Entrepreneurship Congress in Milan.

Celebrating Women Entrepreneurs & Business Angels

For the first time, GEW featured two themed days — celebrating celebrating women entrepreneurson November 19 and recognizing early stage investors on Global Business Angels Day on November 20.

Startup Open

Isreali startup Breezometer, an app that measures real-time air quality and provides health recommendations to its users, emerged from a field of more than 600 startups from 38 countries to win the 2014 Startup Open.

Cleantech Open

Fellow Israeli startup AutoAgronom won this year’s Cleantech Open Global Ideas Competition. The startup has developed smart irrigation and fertilization control systems that allow the grower to significantly increase yields while saving up to 50 percent of water and up to 70 percent of fertilizers.

1776 Challenge Cup

The 1776 Challenge Cup is a global startup competition taking place in 16 cities across 11 countries to identify the most promising startups involved in solving the biggest challenges in four categories – education, energy, health and cities. The global tournament is in full swing with regional finals happening into the spring followed by global finals in Washington, D.C.

DECA Idea Challenge

The DECA Idea Challenge 2014 asked competitors to collaborate to generate a new item based on newspaper, this year’s mystery item, and then pitch their invention in a creative 3-minute YouTube video presentation. Winners will be announced in January.

Global Entrepreneurship Summit

In Marrakesh, U.S. Vice President Joseph Biden, Department of Commerce Secretary Penny Pritzker and SBA Administrator Maria Contreras-Sweet were on hand at the Global Entrepreneurship Summit, hosted by the Kingdom of Morocco, to demonstrate U.S. government support for entrepreneurs around the world. Government engagement throughout GEW was at an all-time high with more than 150 heads of state and ministers from more than 75 countries actively involved.

VC4Africa &CofoundersLab GEW Meetups

On November 20, 2014, VC4Africa members and supporters came together in over 40 cities in Africa, Europe, the US and Asia – to talk Africa, innovation and investment. The VC4Africa meetupsmobilized 2,500 people around the world.

CoFoundersLab brought together entrepreneurs at all stages looking for co-founders to meet, mingle and talk shop.

Future Agro Challenge

Greece kicked off GEW with Disrupt Startup ScaleUP in Athens. The conference hosted a number of competitions including the global finals of the Future Agro Challenge which announced Bermuda Aerial, an innovative startup from Bermuda, as their champion.

Talent Unleashed

The six winners of the 2014 Talent Unleashed awards flew to the Branson Centre of Entrepreneurship in Johannesburg, South Africa for all-expenses paid, four-day entrepreneurship and networking workshop during Global Entrepreneurship Week.

World Series of Innovation

The World Series of Innovation called for participants to select one of NFTE’s seven innovation challenges, hosted by brands like Coca-Cola, Microsoft and the International Red Cross, and come up with a new, unique, innovative product or service to address a market niche. Voting will begin in January 2015.

Global Startup Battle

During the weekend prior to and following GEW, hundreds of Startup Weekend events were hosted around the world with regional and thematic team competitions. Champion winners will receive two free trips to the GEC Milan from GEW. Follow the battle online for updates.

StartUp Cup

StartUp Cup launched WECreate Islamabad in partnership with the U.S. Department of State’s Global Entrepreneurship Program. WECreate is a women’s entrepreneurial center of resources, education, access and training for economic empowerment and is a physical community center. New WECreate centers were announced in three locations in Sub-Saharan Africa and one in the Lower Mekong.

Beyond a week-long flurry of activity, this globalization of entrepreneurship has brought an exciting explosion of programs, startup communities and investments. While GEW is now in our rearview mirror, the Global Entrepreneurship Network continues its work to support the world’s entrepreneurs and will gather next March in Milan at the Global Entrepreneurship Congress.

GEW 2014 launches in 150 countries

 

Week kick off at Disrupt Athens

 

Global Entrepreneurship Week 2014 officially launches in 150 countries with millions of people—from young students to nascent entrepreneurs to government leaders—taking part in a wide range of events, activities and competitions throughout the week.

The initiative is now in its seventh year and continues to expand its reach since it began in 2008, founded by the Ewing Marion Kauffman Foundation, with 77 countries. GEW runs from November 17 – 23, 2014.

“Global Entrepreneurship Week is a shot of adrenaline at one point in the year,” said Jonathan Ortmans, president of Global Entrepreneurship Week. “But it has led to the creation of a year-round platform that is creating one global entrepreneurial ecosystem.”

The week opens with a new Global Entrepreneurship Index that measures the entrepreneurial ecosystems in 130 countries. Policy-driven events featuring discussions about the Index findings and how they can be used to advance entrepreneurial growth are being held in Athens, Cairo, Frankfurt, Gaborone, Jakarta, London, Lusaka, Nicosia, Prague, Riyadh, Sofia and more.

Campaigns around the world have held launch events to mark the opening day. GEW Philippines held an event with SALT, the official Philippine candidate to the Startup Nations Competition in Korea later this week. GEW Qatar held a Gala Dinner Sunday night for 200 guests followed by an official opening ceremony this morning with HE the Minister of Economy and Commerce, Sheik Ahmed Bin Jassim Al ThaniGEW Mauritius held an Entrepreneurship Training Workshop to mark the launch of its campaign. GEW Dominica is marking the opening day by having the Honorable Minister for Culture, Youth and Sports, Justina Charles, officially declare the week open with a radio and television message.

Meanwhile, a number of global competitions are identifying some of the most promising startups around the world while other events aim to reach students and others to inspire them while connecting them to potential collaborators, mentors and investors.

Highlights for the week include:

Startup Open

Founders and founder teams from 38 countries submitted more than 600 startups for a shot at the grand prize of an all-expenses paid trip to Milan, Italy for the Global Entrepreneurship Congress in March 2015. The winner will be announced on Tuesday.

Global Entrepreneurship Summit

Organized by the U.S. Government and the Kingdom of Morocco, the summit in Marrakech features U.S. Vice President Joe Biden, U.S. Secretary of Commerce Penny Pritzker and Mohamed Boussaid, Minister of Economy and Finance of Morocco.

World Series of Innovation

High school and college students from the Network for Teaching Entrepreneurship form small teams to compete in a series of innovation challenges that include game development, geolocation apps, school improvement, business growth and more.

Get in the Ring

Regional winners from Eastern Europe and Western Europe will be announced today, joining global finalists from Africa, Asia, Middle East, North America, South America and Southern Europe to pitch angel investors from a boxing ring in Rotterdam, Netherlands, for a prize package worth 25,000 euros and a chance at up to 1 million euros in investment.

Creative Business Cup

Entrepreneurs from the creative industries–including art, entertainment and design —in 50 countries compete starting today in Copenhagen, Denmark, in the global finals while receiving training and support through one-on-one sessions, investor matchmaking and more.

VC4Africa Meetups

More than 1000 people have signed up to participate in Africa’s largest startup event with networking meetups in roughly 40 cities—reaching African entrepreneurs on the continent as well as those spread around the world.

Startup Nations Summit

Startup community leaders and policymakers from 40 countries gather in Seoul, Korea, to explore effective policies and programs to support entrepreneurs while tech startups compete for $100,000 in cash prizes.

Winners of these competitions and other highlights will be released throughout the week at gew.co

and on Twitter at #GEW2014.

45 Startup Nations will meet in Seoul Summit

This year’s StartupNations Summit (SNS) will occur at the tail end of Global Entrepreneurship Week, in South Korea. The event will kick off with a welcome reception on Saturday November 22. During the next three days, Seoul will be home to a unique gathering that will allow top feeders of entrepreneurial ecosystems to exchange experiences.

During threeimmersive days of talks, discussions, tech demos, competitions and exhibits, the event will celebrate the rise of the era of entrepreneurial innovation. Practitioners, entrepreneurs and policymakers will explore the outpouring of innovation, dynamism and creativity that have inspired the work of 45 countries’ Startup Nations initiatives.

Hosted by the Banks Foundation for Young Entrepreneurs of Korea, the Global Entrepreneurship Network and Startup Korea, the 2014 SNS marks the beginning of a new chapter for the world’s startup community, after successful Startup Nations Summits in Kuala Lumpur and Canada in the past.

The main components of this year’s SNS include:

  • The Summit: A meeting of Startup Nations leaders from more than 40 countries to candidly discuss the lessons learned in improving and expanding entrepreneurship startup ecosystems (by invitation only). Speakers include former Startup America Managing Director and GEW Board Member, Donna Harris; Google for Entrepreneur’s Program Manager, Bridgette Beam; and TechCrunch China’s leaderGang Lu.
  • Global Conference: Open to all registered participants, the Global Conference will allow attendees to take a deep dive into startup communities in Asia, with various perspectives on the Asian entrepreneurial landscape, including from: Doug Rand,assistant director for Entrepreneurship at the White House Office of Science and Technology Policy; Sanqi Li, chief technology officer at Huawei; and Patrick Lee, co-founder of Rotten Tomatoes.
  • World Startup Competition: A competition among tech startups from 45 countries across the globe (voting closes November 14, 2014). Competitors range from a neonatal technology startup from Chile, Babybe, to an agriculture management solution, Agrivi, from Croatia.

Don’t Judge the Economy by the Number of Start-Ups

More new businesses are better for society, right? 

That’s a common assumption think Daniel Isenberg and Fernando Fabre.

For instance, take this recent Washington Post piece, headlined, “More businesses are closing than starting. Can Congress help turn that around?” Sounds ominous at first. But wait a minute – is starting more new businesses always a good thing? Isn’t it a basic economic tenet that well-functioning markets will have many entrancesand exits, that weak businesses (including thousands of one-person enterprises) will get recycled quickly (fast failure) and that over time, vigorous, well-regulated markets will support strong and growing companies, which in turn provide dignified jobs and prosperity?

This conflation of startups with entrepreneurship, and more broadly with “business dynamism,” has become so widespread it can muddle even the most serious research. For example, the admired Brookings Institution recently purported to explain an apparent decades-long decline in American entrepreneurship. The supporting evidence? More and more American companies are surviving and growing beyond 16 years. The implicit axiom here is that robust companies that have sustained and grown over the longer term are somehow less innovative. The authors of this study, as well as other commentators, imply or even proclaim explicitly that these dead weight dinosaurs are dampening American society’s entrepreneurial spirit. (It should be noted that amongst this group of apparently innovation-barren 16-somethings are: eBay [19], Google [16], Starbucks [43], Netflix [17], Apple [28], Cisco [30], Boston Scientific [35], and Dell [30].) In attempting to explain the root causes of the decline, the Brookings report also points to the parallel decline in the number of new companies registered during the same period. Their solution: “America needs more startups.”

The danger here lies in our unquestioning acceptance of the assumptions built into these reports, i.e. that having more growing, sustaining companies is somehow destructive of entrepreneurship in the economy; and that the decline of newly registered businesses, in and of itself, is a bad thing. (Note that Germany has witnessed an almost identical “decline” in dynamism over the past thirty years and most experts would agree their economy has been quite strong. And Alibaba is a 16 year-old company, and no one is claiming it is sluggish or un-innovative.) Indeed, empirical evidence showsthat the decline in new business formation is associated with increased per capita income, and the more new businesses countries have, the lower their GDPs are.

Most of us who have built or invested in sustainably growing business ventures (as we have) would be thrilled at their survival and growth. Anyone who has successfully built a company knows that it typically takes 15-20 years or more to take root. The WhatsApps are the rare exceptions.

These growing businesses – which we call “scale-ups” to distinguish them from start-ups – represent exactly the kind of long-term entrepreneurship that improves societies, jobs, quality of life, and innovation. Entrepreneurial scale-ups are companies – young or old – which are run and owned by growth-driven leaders, and which at any stage of their lives may launch a new growth trajectory. Study after study shows the following: Relatively high-growth ventures are often at least 16 years old, and are disproportionately high drivers of jobs, growth, value, and sustainability. New company starts are easier to count, but they alone don’t have the positive impact on economies that growing a company does.

In the coming eight weeks, we are engaging in a global effort to focus more of the entrepreneurship conversation on scale-ups and their positive impacts on societies and economies. This effort is primarily targeted towards this November’s Global Entrepreneurship Week, during which millions of people in 140 countries will participate in over 10,000 events to celebrate entrepreneurial start-ups. While of course healthy economies include adequate numbers of start-ups (as well as big companies, family businesses, and micro-enterprises), we believe that entrepreneurial scale-ups deserve more attention than they’re currently getting.

With an eye towards broadening and amplifying this conversation, we have developed a Scale Up Declaration, which we offer as a rallying point for what the entrepreneurship discussion should focus on, and what it should aim to accomplish.

1 in 3 entrepreneurs intend to crowdfund

Figures from Irwin Mitchell suggest that crowdfunding has come a long way since being regarded as just a niche option for funding a business.

The survey of entrepreneurs found that 32 per cent thought it was the most likely funding choice they would use in the next 12 months.

17 per cent said they would use P2P loans and 13 per cent angel investment, while two fifths said they were most likely to go for more traditional sources such a bank loans, grants and venture capital.

The survey found that accessibility was a key factor in the rising popularity of alternative funding. Sixty three percent said the growth of crowdfunding and P2P lending stems from issues and difficulties in accessing finance elsewhere.

Andrea Cropley, Corporate Partner at Irwin Mitchell, said: “Although many entrepreneurs have not yet used alternative forms of funding, it is clear that many are happy to do so and will in the next year. As with all finance options, whether mainstream or less traditional, it is vital that businesses explore all options and take the appropriate advice from specialists.”

Inaugural Women’s Entrepreneurship Day this November

According to a recent World Bank study, the global earning power of women is poised to beat the combined GDPs of China and India in 2014. Any country that manages to tip the scales in favor of women’s participation in the workforce is guaranteed to be ahead of the times in terms of economic development. Additionally, Forbes magazine has announced that 2014 will be a breakout year for female entrepreneurs who will lead their counterparts in other sectors.

GEW host organizations and their partners have long acknowledged the largely untapped potential of women entrepreneurs and are at the forefront of leading targeted campaigns and programs to empower women entrepreneurs. They have wasted no time in planning highly engaging events for WED which is scheduled for Wednesday, November 19.

  • GEW USA is a major partner helping to organize a WED Summit at the United Nations in New York City featuring VIPs such as Mama Sarah ObamaA small number of tickets are still available. 
  • GEW Belgium is organizing a women’s entrepreneurship conference featuring a keynote by Mrs. Michèle Sioen, CEO of Sioen Industries and the Chairwoman of Federation of Enterprises in Belgium. The conference agenda also includes a debate on entrepreneurship and education.
  • GEW Botswana has partnered with the Department of Gender Affairs, a sponsor of female entrepreneurship activities as part of GEW Botswana since 2011, and is keen to play a more substantial role this year with the launch of WED. GEW Botswana is also organizing a Regional Women Entrepreneurship Day featuring key entrepreneurs from the GEW network in the region.
  • GEW China and their partners will host a “Women’s Entrepreneurship Competition” as well as a “Demo Day” for women entrepreneurs.
  • GEW Germany will participate in cooperation with the German National Agency for Women Start-ups Activities and Services.
  • GEW Israel has made encouraging female entrepreneurship a priority since 2012, and has since made it customary to publish a female entrepreneurship success story each day during GEW.
  • In the past, GEW Mexico has dedicated a day of GEW to female entrepreneurs; a practice they have found helps maximize media interest in the campaign as well as makes it easier to recruit sponsors.
  • GEW Nepal is partnering with the Nepal Young Entrepreneurs Forum to organize a Young Women Entrepreneurship summit, a full day program featuring inspiring stories from female entrepreneurs, the common challenges they face and how to solve these challenges.
  • GEW Qatar, in partnership with The Qatar Chamber of Trade, will host networking events and workshops for female entrepreneurs. GEW Qatar’s social media campaign will also feature an opportunity to post videos of inspiring women entrepreneurs on the GEW Qatar YouTube channel.  
  • GEW Saudi Arabia is taking advantage of WED to launch a powerful women’s entrepreneurship initiative.
  • GEW Thailand is partnering with Bangkok University to host a conference called “Women Entrepreneurship – Thailand as a Role Model” that aims to highlight the role that Thai women entrepreneurs play in helping shape Thailand’s economic future.
  • GEW Uganda’s flagship GEW activity, a three-day forum for entrepreneurs will focus on women entrepreneurs on 19 November and will be held in different parts of the country with a theme that will explore ways to overcome “Barriers to Women Entrepreneurs”.
  • GEW Vietnam will organize a conference for women entrepreneurship with 100 participants.
  • Endeavor Global, one of the key partners of Global Entrepreneurship Week in 20 countries is also planning a social media effort around the Women’s Entrepreneurship Day.

Other GEW hosts who are planning to organize female entrepreneurship-focused events in celebration of WED include Bhutan, Bolivia, Cameroon, Canada, Ecuador, Georgia, Jamaica, Madagascar, Malta, Namibia, Somalia and Zambia. The number of participating countries is increasing every day.

What lies ahead for China’s entrepreneurs?

When China implemented its first economic reforms in 1978, the government accounted for more than 90% of GDP. By 2005, public sector contributions to GDP represented less than 50%. Does this mean entrepreneurs are thriving?

In rural China, there were no recorded private enterprises until 1994. Today, self-employment preference rates are in flux in all regions of the country, as the country welcomes back foreign university graduates and continues to experience massive rural to urban migration. Paradoxes abound though. For example, Internet censorship continues relentlessly, while a handful of Chinese ICT public offerings on U.S. exchanges in 2014 are hailed as job and value creators at home.

The size of China’s manufacturing sector should be the envy of the modern day Maker Movement as it works to inject manufacturing innovation in what we know as “industrialized nations”. The size of its population and economy presents a market which entrepreneurs from everywhere are trying to tap. Yet, various socio-political limitations present high obstacles to an innovative manufacturing sector and more entrepreneurs meeting demands from its growing middle-income population. These hurdles affect not only these sectors but also banking, services, government procurement, and even traditional sectors like construction and agriculture.

Beyond navigating a political environment that still favors state-owned enterprises, entrepreneurs also have lots of regulatory hurdles to tackle. For many, these hurdles lower their appetite for risk, deterring new ventures altogether, or limiting the number of ventures to the ones inspired by copy-cat ideas that have proven succesful elsewhere, like the plethora of Chinese versions of Groupon or car apps. According to data collected by the World Bank’s Doing Business project, China is among the most unfavorable business environments, ranking 158th among 183 economies. While piecemeal policy changes have signaled an acknowledgement of the contribution of a new wave of companies, the World Bank reports no significant reforms to make it easier to start a business during the 2009-2011 period.

Insecure property rights represent another major roadblock, and removing it has been on the policy agenda since a system of private ownership officially began in 2004, but progress has been slow. The most recent changes have been in the realm of opening new asset possibilities for raising capital. In October 2007, the new property law in China expanded the range of assets that can be used as collateral, to include accounts receivables and a changing pool of assets to secure a loan. Still, the Heritage Foundation has reported sharp declines in the overall property rights environment.

Despite a comparatively unfavorable policy environment, Chinese entrepreneurs in organic clusters in tier-one cities like Shanghai, Beijing and Gaungzhou have long shown that innovation can still flourish in a top-down economy. They form a critical mass of entrepreneurs that have raised the importance of entrepreneur-to-entrepreneur, and entrepreneur-to-investor networks, creating lots of economic freedom. For example, such strong entrepreneurial ecosystems are visible at the Touch (TNT) monthly meetup in Chinese tech cities, or for the outside world through the writings of TechNode, the official partner of the TechCrunch news and events platform in mainland China that is written in both in English and Chinese.

There are also plenty of positive indicators to be found by looking at the incubators and accelerators for China-based entrepreneurs that can be spotted outside of the main cities, such as Axlr8r, a 90-day accelerator program based in Dalian. Some target specific demographics, such as the Tianjin Women’s Business Incubator (TWBI). Respondents to the EY Barometer survey were most positive about this development — 52% saying that access to such supported services had improved in the last three years.

Further, in terms of startup or scale up capital, the success of many Chinese startups has demonstrated that if ideas are validated, the team is dynamic, and the entrepreneurs are rightly coached, money will follow. Earlier this year, the online education website TutorGroup raised approximately $100 million in venture capital. At the same time, Alibaba’s recent filing to go public has set the stage for what could be the largest Wall Street debut in history.

The government does seem to recognize the importance of new firms. As reported by the EY G20 Entrepreneurship Barometer 2013, China’s Ministry of Commerce acknowledged that entrepreneurial ventures are responsible for 75% of new jobs each year and 68 percent of exports and has started to focus on improving the regulatory environment. In an attempt to reduce the amount of time spent paying taxes, the criteria and accounting methods for tax deductions were unified through China’s new corporate income tax law. More recently, measures to enforce contracts have been directed at streamlining court proceedings. In 2013, the Chinese government reduced the cost of starting a business by exempting micro and small companies from paying several administrative fees from January 2012 to December 2014. The test will come after this period expires when policymakers will have to decide whether they want to continue to find new ways to remove roadblocks for new venture creation and firm growth.

One other important “feat” has been what the Chinese government, prone to a planned economy, did not do, such as organized innovation clusters that more often than not, fail and become mere physical structures with little entrepreneurial life and energy. Vivek Wadhwa has pointed out that “top-down industry cluster is a modern-day snake oil”. As he explained:

“Governments can build infrastructure and pump money into education and R&D. But they cannot manufacture innovation. Innovation comes from creative people who challenge authority and take risks–who exchange ideas and experiment at the fringe.”

There are also some trends outside of government that might give hope for China’s entrepreneurs. For example, overseas-educated entrepreneurs returning to China are adding to the local mass of entrepreneurs you can see, for example, at the Entrepreneurship Foundation for Graduates (EFG). The returning graduates are injecting cultural capital and demand for entrepreneurial vehicles and support infrastructure such as startup incubators for their patents. EY reported that China is building 150 startup incubators specifically for graduates returning from overseas.

In addition, the rising tide for technology companies raises many other boats. AsTechCrunch reported, beyond a statement about the value of the entrepreneurial path, these success stories are building investor confidence. Moreover, the successful ventures will know how to work with startups as they seek innovation opportunities. More importantly, these rising large companies challenge the mindset of the lifetime employment at state-owned enterprises (known as the ‘iron rice bowl’).

Looking ahead, as in other economies, sustainable growth will depend on meaningful reforms to make the economy less hostile to new entrepreneurs by unshackling this giant nation’s entrepreneurial limb. From my meetings in China with government officials, I doubt Beijing will kill this enthusiasm. The shear size of the economy and strong government will make it hard for China to create a healthier environment where established and young upstart companies can coexist, but despite inherent contradictions within the political and economic infrastructure, the dominant flow will continue toward removing roadblocks that hinder the development of an organic entrepreneurship ecosystem.

They understand the importance of empowering ecosystems where for example, startups have the breathing space to produce agtech solutions that fuel China’s giant food production sector, which the government currently subsidizes to ensure its productivity and competitiveness.

When party leaders sit down and map the future of the economy, I suspect they are already figuring out how to tear down walls in front of China’s younger problem-solvers who are going overseas and tapping into other local, national and global exchanges of innovative ideas. Even in China, the power of the global startup community is incentivizing change for the better at home.

More support needed to enable women entrepreneurship development

Dell’s Gender-Global Entrepreneurship and Development Index (GEDI), reveals that more than 75% of countries surveyed are not meeting the most fundamental conditions required for female entrepreneurs to prosper.

 

Commissioned by Dell, the Gender-GEDI is the world’s only diagnostic tool that comprehensively measures high potential female entrepreneurship by analyzing entrepreneurial ecosystems, business environments and individual aspirations across 30 developed and developing economies spanning multiple regions, providing a systematic approach that allows cross-country comparison, benchmarking, and identifies data gaps. The goal of the research is not to provide a headcount of female entrepreneurs worldwide, rather it is future-oriented and designed to be a tool to guide leaders, policymakers and law-makers in identifying country-wide strengths and weaknesses and developing strategies to create more favorable conditions in their countries to enable businesses founded by women to thrive.

2014 Gender-GEDI Results
Among the 17 countries included in both the 2013 and 2014 Gender-GEDI reports, four increased their rankings (Japan, Brazil, India, and United Kingdom), four showed a decline (Malaysia, Egypt, Mexico and Morocco), and the others ranked comparatively both years.

The highest performing countries in the 2014 Gender-GEDI rankings are all OECD member countries with highly developed economies, and for the second year in a row, the U.S. (83) and Australia (80) came out on top, followed by Sweden (73), France and Germany (tied at 67), Chile (55), the United Kingdom (54) and Poland (51). The remaining 23 of the 30 countries studied received an overall index score of less than 50 out of 100, indicating that many of the fundamental conditions for high potential female entrepreneurship development are generally lacking in the majority of countries.

“To harness the full potential of the low performing countries, the Gender-GEDI results demonstrate that basic improvements are required in terms of access to equal legal rights and education as well as acceptance of women’s social and economic empowerment,” said Ruta Aidis, project director for the Gender-GEDI. “For countries with moderate scores, to improve their rankings, they should focus both on current women’s enterprise development interventions and support as well as basic improvements in the business-enabling environment.”

The 2014 Gender-GEDI demonstrates that top-performing countries are not necessarily the ones with the highest GDP levels; rather they are those who have committed to improving the conditions for female entrepreneurship on several fronts simultaneously, and even those with the highest scores still have room for improvement. While these countries tend to have good business-enabling environments overall, they could benefit from supporting programs designed to activate and accelerate the growth of high-potential female entrepreneurs.

To provide tangible examples on how women entrepreneurs can overcome challenges and maximize the opportunities flagged in the study, Dell commissioned an e-book, Forget the Glass Ceiling: Build Your Business Without One, featuring case studies of 10 women entrepreneurs, which is available for download starting today on Dell.com/women.

GEDI-Index 

Index Highlights
The Gender-GEDI is focused on the ways in which governments, institutions and corporations can support the effort of improving conditions for high-potential female entrepreneurship worldwide, and the 2014 results indicate that, across all nations, there is still much to be done, but by increasing access to education, technology, capital and networks, significant progress can be made.

  • Access to capital continues to be crucial. Access to a formal bank account is critical for entrepreneurs, especially since it is a necessary precursor to the financing (bank loans, credit lines, etc.) that fuels business growth. However, in 14 of the 30 countries, 50 percent or more of the female population is unbanked, with the gender disparities being highest in Turkey, where there is close to a 50 percent difference between men and women with bank accounts. Worldwide, women also receive less outside funding for their businesses than men.
  • Many industries remain male-dominated. Occupation crowding, or the existence of ‘male’ and ‘female’ jobs in a country’s economy, not only contributes to the gender wage gap but also results in the concentration of women’s entrepreneurial activity within specific sectors, which can be detrimental to fully utilizing a nation’s capacity for innovation. Out of the 30 countries, only eight received an overall balanced ratio across employment sectors, and in India and Pakistan, formal employment is so highly sex segregated that no employment sectors are balanced. Some countries and industries are beginning to address these occupational inequalities through voluntary quotas and targeted initiatives in the sectors that tend to marginalize women as a result of their ‘macho lab coat, hard hat and geek’ workplace cultures.
  • Female start-up activity is on the rise in emerging markets. Despite being ranked as top performers and characterized by overall favorable business environments, opportunity perception is fairly low in the United States and Europe with less than one third of the female population measured identifying business opportunities. In Africa, this number reaches 69 percent. Even with challenges around access to education and capital, female startup activity in the region is high at 86 female to every 100 male startups. Ghana has more female startups than male at a rate of 121 to 100. The Latin American and Caribbean countries included in the Index also exhibit high rates, with a regional average of 84 female to every 100 male startups.
  • More women are needed at the top. Even when the business environment is right, social norms can affect general societal support for women as entrepreneurs and their access to experiences as decision makers and leaders. Local attitudes towards women in executive positions can also effect whether women choose to take on these higher roles and responsibilities. Only five countries have 40 percent or more female managers (Jamaica, Ghana, Panama, United States and Nigeria), and in four countries the percentage of women is 10 percent or less: South Korea (10 percent), Turkey (10 percent), Japan (9 percent) and Pakistan (3 percent). While education forms the foundation for high potential entrepreneurship, management experience provides women with additional skills, experience and networks that facilitate female entrepreneurship success.
  • Women’s rights must be addressed first. In 22 of the 30 countries included in the Index, married women have fewer rights than married men, in 21 countries women lack the same access to employment as men, and in eight countries women do not enjoy the same legal access to property as men. A number of countries also limit women’s access to public spaces through legal restrictions and discriminatory practices. In order to foster female entrepreneurship, these countries must first address these fundamental weaknesses and take steps towards ensuring women equal rights.