Entrepreneurial support is key to economic recovery

logo_blackBryan Zekulich, Ernst & Young's Oceania Entrepreneur Of The Year Leader, talks about the importance of creating a supportive culture and business environment to encourage entrepreneurial growth.

With many countries around the world worried about the spectre of a double-dip recession, new entrepreneurs are set to have the greatest impact on growth and employment.

Entrepreneurs are not afraid of adversity. In fact, they expect it. Every challenge presents another opportunity to innovate and create success.

In the current climate, great entrepreneurs stand out in how they manage the economic environment and the opportunities they pursue. They operate in the same environment as everyone else, yet they continue to innovate and prosper, creating new jobs and business models.

Knowing how important entrepreneurs will be to a global economic recovery, what should governments do to nurture and support them? And how can entrepreneurs take advantage of a strong enterprise environment?

Entrepreneurship culture: strength breeds success

Depending on where you start your business, entrepreneurial failure is either stigmatised or worn as a badge of honour. Successful entrepreneurs play a pivotal role in inspiring future generations. Governments should encourage innovation and acknowledge the strong contribution made by entrepreneurs to innovation and job creation. A strong entrepreneurship culture also favours diversity and learning opportunities.

What should entrepreneurs do?

  • Improve your country's own entrepreneurial culture by promoting your own success; and
  • Take account of the local entrepreneurial culture when deciding to globalise.

Education and training: a broader scope is needed

Therer should be more specific education programs - starting as early as primary school - dedicated to entrepreneurship, to encourage young students to identify market opportunities and valid career options. Also critical to an effective entrepreneurial education are the knowledge, self-esteem and skills to act on opportunities.

What should entrepreneurs do?

  • Inspire students by telling your own success story;
  • Mentor and contribute to internship and experience schemes that match local businesses with young entrepreneurs; and
  • Undertake specific, dedicated, business start-up training when moving from a corporate role to entrepreneurship.

Access to funding: tap into diverse sources

Access to funding continues to be the most significant challenge for the creation, survival and growth of successful entrepreneurial companies. However, with several governments' fiscal pressures mounting and bank lending increasingly risk averse, entrepreneurs globally are turning toward 'angel investors', venture capital and private equity funding. Governments can make this easier by helping business angel networks widen their scope and stimulate venture capital. They should also avoid stifling private equity activity with too much regulation.

What should entrepreneurs do?

  • Open up to international markets as opportunities arise;
  • Use junior markets as a source of funding; and
  • Turn to alternative funding sources, such as corporate financing and microfinance, to reasonably reduce risks.

Regulation and taxation: to encourage innovation, regulation can improve

It is now more widely accepted internationally that governments have a substantial role to play in regulating, incentivising and directing private sector activity. Many countries have made conditions easier in terms of the cost and ease of starting a business and leading practices are emerging.

Those incentives with the most impact are stable, multi-modal and clearly targeted at encouraging innovation and entrepreneurs. Respondents indicated increasing tax incentives would have a high impact on long term growth.

What should entrepreneurs do?

  • Identify the existing start up incentives at all relevant administrative levels, including regional and national; and
  • For your expansion projects, consider locating them in a jurisdiction that provides appropriate incentives.

Coordinated support: time to team

Government agencies, business incubators, university resources and training programs have clearly improved their level of support in the last five years. But entrepreneurs expect them to better coordinate their efforts to unlock greater entrepreneurial activity and help them expand internationally.

What should entrepreneurs do?

  • Look for centralised providers of simplified regulatory and taxation information; and
  • Take advantage of any coordinated business incubators and mentoring support schemes.

Innovation, globalisation and the entrepreneurship environment

Tighter budgets for government and large corporations have lessened the focus on research and development, and to some degree small and medium enterprises will face a similar challenge.

But entrepreneurs see innovation as the very essence of entrepreneurship. Given that innovation can help improve productivity costs and uncover new opportunities, it is something governments and large corporations should also be focusing on, especially during times of economic uncertainty.

Despite current concerns about the global economy, there is little doubt that globalisation will continue. Entrepreneurs often need to think beyond the borders of their own country -- driving exports and making use of international supply chain opportunities - to be successful. They will need to know how well other countries compete on the five key pillars, and governments will need to respond to that competition in order to attract their share of entrepreneurs.

Entrepreneurs need to be supported and acknowledged for the critical role they play in job creation and generating innovation. This includes more attention in fiscal and government policy.

With the vital role they play in helping our economies maintain momentum and competitiveness, now is the perfect time to support entrepreneurs and innovators at all levels.

Note: This information was based on an Ernst & Young survey of 1,000 entrepreneurs globally. Read Entrepreneurs speak out: a call for action to G20 governments for more information or visit www.eoy.com.au.

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