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Brazil is more than just the popular future host of the 2014 World Cup and 2016 Olympics. It is a very promising economy and the country of origin of many global challenger companies, such as Embraer, Marcopolo, and Natura. Economic analysts group the country with the most promising emerging markets, Russia, India and China, which together form the “BRIC countries.” Is entrepreneurship responsible for part of Brazil’s economic development? A look at some of the trends in entrepreneurship in Brazil suggests so, and the country’s efforts to boost its culture of innovation and entrepreneurship promise to sustain its growth in the coming years.
Last June, President Obama announced in Cairo, Egypt that the U.S. government will host a Summit on Entrepreneurship to identify how we can deepen ties between leaders, foundations, and entrepreneurs in the U.S. and Muslim communities around the world. Throughout April leading up to the April 26th summit, I will comment on the state of entrepreneurship in some of the nations participating which I will be attending in the hope of prompting further observations from readers.
Haitians have received help from governments, the private sector and the philanthropic community around the world to deal with the awful devastation, but the long term goal of rebuilding a nation and constructing institutions from scratch will require sustained commitment to the country. I can’t think of a better group to enlist in this task than Haitian entrepreneurs. The needs of the businesses affected in this region are extraordinary, but so is their potential to become agents for restoration.
We have long argued that the American model for development assistance could improve dramatically if entrepreneurship becomes a stronger element of economic development efforts. Unfortunately, the importance of new firm creation is a concept that has yet to gain relevance in traditional development models, such as the Washington Consensus. However, there are a few actors who understand the power of entrepreneurship and have been using it to improve lives. Diaspora entrepreneurs are using their experience and understanding about entrepreneurship to invest in new ventures in their country of origin. These transnational entrepreneurs view a globe of porous borders.
So we know that entrepreneurs are the primary engines of job creation in the United States. Research study after research study has confirmed that it is young firms that drive improvements in the employment situation. From 1980–2005, firms less than five years old accounted for all net job growth in the country. In 2007 alone, young firms (1-5 years old) accounted for nearly two-thirds of job creation. We also know more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market, along with nearly half of the firms on the 2008 Inc. list of America’s fastest-growing companies. In light of all this evidence and in face of the employment crisis in the country, how can we truly support the entrepreneurs behind these young firms?
When President Obama will deliver his first State of the Union address is still unclear. However, with 80 percent of the population believing that new economic growth and jobs will come from entrepreneurs, discussion around what his address should include in terms of policies that encourage new start-ups is already underway.
Since the economic crisis broke out, capitalism has been under the microscope. Many have blamed evil businesses and market forces for the financial meltdown, and have lost confidence in private-sector engagement strategies for recovery. Luckily, in this country many more have experienced the positive impact of entrepreneurship either directly and indirectly. In a March 2009 survey, 63% of respondents said they “prefer giving individuals the incentives they need to start their own businesses as opposed to allowing the government to create new jobs directly.” A look at the role of new businesses in the economy reveals that it is not a matter of rejecting capitalism but rather of allowing more entrepreneurs into the economy.
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