I’m convinced that about half of what separates the successful entrepreneurs from the nonsuccessful ones is pure perseverance.—Steve Jobs (1955 - ), Interview, 1995
Innovation is the specific instrument of entrepreneurship... the act that endows resources with a new capacity to create wealth.—Peter Drucker (1909 - 2005), Innovation and Entrepreneurship, 1985
CONGRATULATIONS to Joyce Anne Cruz, Reynaline Tugade and Christina Limbo from the University of the Philippines for winning HSBC’s business plan competition in Hong Kong.
Their victory in this prestigious competition is important as it seems to signal the growing interest among the youth to become entrepreneurs. The Philippines needs this kind of spirit among the young. This is the only way we can generate enough jobs in the country and address poverty.
Right now, official statistics say the jobless rate in the Philippines stands at 7.4 percent and underemployment 18.9 percent. These numbers translate to 2.5 million jobless people and more than six million people who are unhappy in their jobs. These are huge numbers, considering that the Philippines has been growing quite decently in the last three or five years.
The employment outlook has actually been improving lately, but it is obvious that jobs have not grown fast enough to soak up joblessness despite rising overseas placement and the growth of services employment. This trend could largely be due to the fact that economic growth—in the Philippines as well as the rest of the Asia-Pacific region—has been technology–driven. The immediate beneficiaries of such growth, therefore, are skilled workers or people who have gone to college.
Also, it appears that the relentless search for efficiencies by the manufacturing sector in response to stiffer foreign competition is forcing them to scrimp on labor costs, thus making them a bit more conservative in their hiring decisions.
What this trend suggests is that the country needs help from our economic entrepreneurs to expand job opportunities. We need them because they are intrepid souls who start new business organizations despite adversity and difficulties. But where do we get all these entrepreneurs? From the younger generation represented by the likes of Cruz, Tugade and Limbo.
Based on anecdotal evidence, what sets the Philippines apart from the dragon economies of her neighbors is this low level of entrepreneurship—ironically, in a country where it’s often been said that small and medium enterprises (SMEs) account for 90 percent of the economy.
That’s the general impression, anyway. Historical circumstances dictate so. For so long, despite the abundance of SMEs, the Philippine business landscape has been dominated by political manipulators who do business through connections, special privileges and government incentives. This practice was common during the Marcos dictatorship when friends and relatives of cronies cornered juicy deals through state-sponsored monopolies and fiefs.
The same rent-seeking behavior, albeit manifested in other forms, pervaded all post-Edsa administrations. The result was that we have a generation or two of Filipinos who have grown to associate entrepreneurship and the profit motive with social “exploitation.”
Hence, many of the country’s population in their late thirties and older came to associate “serving the people” with going underground as revolutionaries as well as doing charity and “civil society” work; sadly, many of these ventures proved unsustainable when the funds from charities in Europe drained, especially after the collapse of the Berlin Wall.
Lacking the ethos of risk–taking and entrepreneurship, the career goals of many in these generations focused mostly on gaining employment in the corporate sector (which is narrow), the bureaucracy, academe and overseas. Some of those who came before them and didn’t have the knack for growing a business or simplistically associated pursuit of profit with selfishness just copped out: they withdrew from society as hippies who grew long hair, took fewer baths, jammed in the community band, smoked pot and played Frisbee.
Now, things appear to be changing for the better. The younger generation—sick and tired of chasing jobs that leave them unsatisfied and empty—appear to have a changing view of their options in life. If they can’t find jobs, they might as well create jobs for themselves.
There’s no statistical evidence on this trend yet, but the growing popularity of entrepreneurship seminars and events initiated by do-gooders like Joey Concepcion, the increasing circulation of publications on entrepreneurship, the rise of entrepreneurial schools (Vivien Tan’s school for entrepreneurship is an example), the continuing popularity of AIM’s entrepreneurship courses, to cite some examples, are possible proofs.
Recently, the popularity of innovative business models like that of Chikka.com, providing communication services to this text-crazy generation which combines high technology, venture capital and tech-savvy young business leaders, seems to support this trend. The faculty and students of Ateneo’s department for electronics and communications engineering lately formed Blue Chips International, providing microelectronics design and software services for global corporations—this seems to indicate a continuing spark of entrepreneurial energies among the young, lately validated by the victory of the three UP students.
Of course, the younger generations today are growing up with a changed social ethos. These are the generations who grew up idolizing Bill Gates of Microsoft, Steve Jobs of Apple, Larry Ellison of Oracle, Jerry Yang of Yahoo!, Larry Page and Sergey Brin of Google, and Chad Hurley and Steve Chen of YouTube—rebels and iconoclasts who trail-blazed the brave new world of the Information Revolution and made money for themselves beyond their wildest dreams.
Besides generating jobs, entrepreneurs are important to society for performing other socially beneficial functions. Usually, entrepreneurs are leaders and visionaries with innovative ideas that can change society. Many of them think out of the box to provide tangible solutions to real economic and social problems. Many of them eventually become effective political leaders who transform their own communities. If we could have more of them—and fast—if society (schools and business leaders) could nurture and guide more of them, entrepreneurs might yet revolutionize this country, a social transformation that could make Karl Marx blush.
(Note: Originally drafted as editorial for BusinessMirror, July 10 2007.)