Every now and then, some government officials declare some plans or official measures in support of the country’s increasing tribe of entrepreneurs, or those people who plunge into business even with a capital of just a few thousand or even hundreds of pesos.
The Department of Trade and Industry, whose current chief once headed an organization that catered to small and medium business ventures, recently made a vow to “step up efforts in 2018 for the betterment of entrepreneurs.”
At least one member of the Senate has recognized the need for the local banking system to provide more financing for the country’s more than 900,000 micro, small and medium enterprises (MSMEs). These enterprises get only about 10 percent of all outstanding bank loans, lower that the 15 percent average in lower-middle income economies in Asia, he lamented.
Indeed, entrepreneurs behind small start-up business in the Philippines are recognized as a generator of around 40 percent of jobs in the country, helping reduce to some extent the poverty problem that has also acted as a drag to overall economic growth.
While there are success stories, there are also many others who fail to sustain their operations. They all proclaim passion for their business ventures and many of them actually do get some support from the government and private groups that give financial or technical assistance.
Could it be that budding entrepreneurs do not get the right kind of support? Do those who are willing to provide support and even capital know the entrepreneurs well enough to ensure stability in their ventures?
Changing face of entrepreneurship
A new study says that economists and researchers now look at various facets of entrepreneurship and their work point to a constantly changing set of factors that determine what drive and challenge entrepreneurs. An understanding of these factors would help policymakers, institutions, and even the entrepreneurs themselves plot more effective strategies.
The research study, released this month in PLOS ONE, a scientific journal published by the US-based Public Library of Science, was done by Yanto Chandra, an assistant professor at the City University of Hong Kong’s Department of Public Policy. Chandra usually conducts research on policy and management of social innovation, non-profit organizations, social finance, and poverty alleviation.
In his report, Chandra briefly notes the ‘sari-sari’ store phenomenon in the Philippines as an example of sectors that are “marginalized” in mainstream research on entrepreneurship. He says these small retail stores do not pursue wealth creation but treat entrepreneurship “as a means of survival and pursuing a simple lifestyle.”
Chandra’s study focused on research work on entrepreneurship conducted by economists, academics and social scientists over the period 1990-2013, dividing the coverage into periods of six years each. An interesting feature of his study is his use of “scientometrics” which allowed him to conduct ‘science mapping’ to synthesize research findings, evaluate the research and publication performance of individuals and institutions, and reveal the structure and dynamics of scientific fields.
The study notes that from an initial “person-centric approach” (which attributes psychological traits and people’s characteristics as predictors of entrepreneurship), analysts now probe deeper into what entrepreneurs really do, particularly why and how they recognize, evaluate and exploit opportunities.
In the 24 years covered by his investigation, up to 46 topics about entrepreneurship kept cropping up—they “appear, disappear, reappear and stabilize over time”. During this period, entrepreneurship research was largely on “person-centric” topics followed by “performance” and “new venture” creation. Such terms are ability, performance, environment, red circles, green circles, blue circles, innovation and technology were main terms cited.
These fields have since expanded to include entrepreneurial process and opportunity, SMEs, strategy and management. In the most recent period, researchers noted the rise of such entrepreneurial concerns as community and society, ethic, marketing and market orientation, human capital, family business, IPO and firm sale, along with gender, social entrepreneurship, corporate social responsibility, leadership and poverty.
These are only some of the topics most covered by the research work that Chandra analyzed. Such wider scope covered by the entrepreneur’s compass for its operations appears to signify the complexity of entrepreneurship in today’s setting.
From these topics, Chandra lists five topics that persistently appeared in the research works he reviewed. These are: institutions and institutional entrepreneurship, innovation and technology management, policy and development, entrepreneurial process and opportunity, and new ventures. Chandra labels this group as “The Pentagon of Entrepreneurship” which, he says, offers the “latest insights” on the state of the art of the field.
Chandra says that “mapping and tracking the evolution of entrepreneurship research is central to our understanding of the institutionalization of entrepreneurship, assess its legitimacy, and identify alternate histories and future opportunities.”
“The collective success of the science of entrepreneurship is vital, as it helps entrepreneurs, policymakers and global institutions understanding the drivers, obstacles and rules that affect value creation, economic growth, resource allocation and policy agenda that shape societal well-being,” Chandra concludes.