By Simon Johnson
Below is a summary of points from Class #4 of Entrepreneurship without Borders, a course at MIT Sloan. Use this link to look at earlier sessions.
The conventional view about entrepreneurship in emerging markets is that it is difficult or perhaps impossible for new start-ups to have a great deal of impact. Local markets are dominated by big players who have a great deal of power and who can make life difficult for young competitors (e.g., a frequent complaint in South Korea). Weak institutions, such as contracts that are hard to enforce, tip the balance towards large incumbents – many of which are based on a long-standing family business.
There is also often a culture (social norms and expectations) that does not view failure as a positive learning experience. And access to capital and other critical inputs (e.g., talented workers) may be limited or not available to entrepreneurs at a price that makes the firm viable – or that allows for rapid growth.
Endeavor is an organization that works hard to address these issues, particularly by creating a local and global network of people who want to help entrepreneurs. These communities have done very well in some countries – including in South America (see this visual representation of Endeavor’s impact in Argentina). Continue reading