Since the fall of Soviet Union and dire performance of centrally planned economies, the world in general is moving towards open and market economies. The trend is highlighted by the increasing economic freedom around the world. According to the Economic Freedom of the World Report, the average economic freedom score of the world in 1980 was 5.30 which has ever since increased steadily to 6.83 in 2010. One of the important aspects of a market based economy is the crucial role entrepreneurs and private sector play in the economic growth and development. Entrepreneurship is slowly getting the recognition it deserves for its role in among other things, poverty alleviation. United Nations' Commission on the Private Sector and Development has acknowledged that “the private sector can alleviate poverty by contributing to economic growth, job creation and poor people’s incomes. It can also empower poor people by providing a broad range of products and services at lower prices.”
According to Global Entrepreneurship Monitor which makes an annual assessment of the entrepreneurial activity worldwide, India and China alone are home to more than 200 million small firm owners and entrepreneurs currently. India is said to be already enjoying the third wave of entrepreneurship that has transcended the national boundaries and vying for international supremacy. Prior to the reforms of early 1990s, in their first wave of entrepreneurship, Indian entrepreneurs were busy fighting the bottlenecks, regulations and limits as well as other non-political hurdles and had limited impact in the economy.
Unfortunately, Nepal till date seems to be caught up in that particular phase. Entrepreneurship as a means of poverty alleviation and economic growth as of now does not resonate well with the government, intelligentsia and the development sector of Nepal. So it should not come as a surprise that major employment programs of the government are focused on providing employment or equipping people with 'marketable' skills which is supposed to them a better employee but not necessarily a job creator.
However, with a comparatively lesser amount of resources more jobs could be created through fostering entrepreneurship in Nepal. An estimated 400,000 people enter the job market in Nepal annually and very few of them have the idea of starting their own venture on their mind. As observed around the world and in case of Nepal too, entrepreneurship development requires more than just a program and more than just one of the actors of the society. To create a sustainable environment for fostering entrepreneurship and reaching out to a wide range of the populace, there is a necessity to create an entrepreneurial ecosystem which can support aspiring entrepreneurs in every step of their entrepreneurial journey. Addressing just one aspect of the entrepreneurial ecosystem is likely to end up in failure. E.g. Even if the government's Youth Self-Employment Fund had been implemented as intended, it would have ended up in failure because it seemingly addressed only one aspect of entrepreneurship- access to capital.
So what constitutes an entrepreneurial ecosystem and how can it be built? The first step to building an entrepreneurial ecosystem would be finding ways to tackle the stigma held by our society towards entrepreneurship and profit-making. Society's attitude towards business and profit-making as immoral and tantamount to cheating and robbing people can be a self-fulfilling prophecy and encourage the already pervasive crony capitalism in Nepal that has been benefiting a few at the cost of many. Values of entrepreneurship and innovation can be instilled in the students by introducing entrepreneurship in the curriculum from school level. Lack of any encounter with the idea of entrepreneurship during school curriculum has resulted in students seeking good employment as career goals rather than starting a venture on their own. Although a few educational institutions like King's College have started entrepreneurship in the syllabus of their tertiary level education, and few organizations like Samriddhi, The Prosperity Foundation have been running courses on entrepreneurship that focuses on introducing the concept of entrepreneurship to university level students, there is a need to introduce the concept in younger levels too.
Next, in the entrepreneurial ecosystem is the access to capital and mentorship required for aspiring entrepreneurs. Venues for aspiring entrepreneurs to pitch their ideas and acquire necessary funding, to network with other entrepreneurs working in similar fields and practical suggestions and guidelines from a more experienced entrepreneur or leader have to be created to turn the ideas of entrepreneurship into reality. Private sector, especially non-governmental organizations and even self-help styled groups that aspiring entrepreneurs can form on their own can achieve this step in the ecosystem. The rising popularity of interaction and story sharing programs like Entrepreneur for Nepal's Last Thursdays with an Entrepreneur shows that there is huge demand for such initiatives. Similarly, Biruwa Ventures, an attempt by 3 Nepali students to adopt the model of venture capitalism and provide support mechanism for aspiring entrepreneurs is getting wide appreciation. The concept of mentorship of young aspiring entrepreneurs by well-established entrepreneurs is slowly getting popular. Entrepreneurs for Nepal, a loosely connected group of entrepreneurs of Nepal has been providing avenues for such mentorship through its sounding board and boot camp programs. It is high time that programs like these be replicated across the nation, especially other cities and major economic areas. Development organizations working in economic development and livelihood issues can play a vital role in getting these programs across the country and have a larger impact.
Entrepreneurial journey does not stop here. Expansion and sustainability of the business venture that comes next is a crucial step for ensuring that businesses have a significant impact in the society through creation of long term job opportunities and capital formation. Commercial banks play a major role in this step. Financial institutions as of now are not eager to invest in areas outside of their traditional domains and businesses outside the well-established business houses although a few banks like Mega Bank have come up with loan mechanisms for aspiring small scale ventures.
Government and civil society should also start focusing on recognizing entrepreneurs for their contribution in the economy and nation's prosperity. The recently concluded Global Entrepreneurship Week which had 35000 activities being organized around the world bringing message of entrepreneurship across to more than 7 million participants in 130 countries including Nepal is one such platform. Similarly, increasing recognition of social entrepreneurs and their contribution in solving society's problems can be harnessed by complimenting such efforts with efforts from government as well.
Last but not the least important aspect of entrepreneurship development is the policy regime of a country. Regulatory hurdles, corruption, political intervention in the economy has made Nepal one of the toughest countries to do business. The poor performance of Nepal is the Doing Business Report is a well-known fact for our private sector as well as policymakers. Being the domain of the government, policy reforms and business environment enhancements have to be carried out by the government. The government's priority should be on how to create a nation of entrepreneurs rather than a nation of job-seekers or providing employment to everyone.
(Published in The Himalayan Times of 17 December, 2012)