Monday, February 15, 2010

The problem of entrepreneurship in BELIZE!

( QUOTE from the Belize Culture Listserve )

Dan Senor and Saul Singer's new book "Start-Up Nation: The Story of
Israel's Economic Miracle," rattles off some interesting statistics
that deserve consideration by policy makers in other countries.
Per-capita venture-capital investment in Israel runs 2.5 times that in
the U.S. and 30 times that in Europe. Tiny Israel—population 7.1
million— attracts as much venture capital as Britain (population 61
million), and France and Germany combined (combined population 145
million). Israel has more companies listed on Nasdaq than any other
country save the U.S. and has grown faster than the average for
developed economies in most years since 1995. Between 1980 and 2000
7,652 patents were registered in the U.S. from Israel. That compares
with 77 from Egypt.

Messrs. Netanyahu, Doron and Fischer were operating within a culture
that is "skeptical of conventional explanations about what is
possible" and characterized by "insatiable questioning of authority"
according to Messrs Senor and Singer. And a willingness to accept
failure is a necessary part of any economy heavily reliant on
start-ups for its economic growth, a feature also characteristic of
the U.S., where entrepreneurs say that if an entrepreneur has not gone
bankrupt by the age of 35, he has not taken enough risks. A Harvard
University study puts it more scientifically: entrepreneurs who fail
in their first venture have a higher success rate in their next
venture than first-time entrepreneurs. Credit Peter (now Lord)
Mandelson for long ago recognizing that and leading an effort to
reform U.K. bankruptcy laws to make second chances more possible for
the country's risk-takers.

Throw in a superb university system and the obligation of all Israelis
to serve in the military, the elite units of which have spawned many
of the most successful high-tech entrepreneurs, and you have a recipe
for world-class start-ups. These are firms that either end up selling
shares in IPOs, or selling to Intel, e-Bay, Microsoft, or Google,
among others. One unnamed e-Bay executive told Senor and Singer, "The
best-kept secret is that we all live and die by the work of our
Israeli teams…. What we do in Israel is unlike what we do anywhere
else in the world."


This is just my opinion from a life time of entrepreneurial living, and as shining examples I put forward my four daughters of Caye Caulker who are each highly successful.

The trouble with the government and those people in the bureaucracy, particularly those from the port town of Belize City, the "'gimme dollar crowd' is that they do not know what it takes to encourage entrepreneurs. They are of the mind set that you can BORROW by LOANS to entrepreneurial success. On occasion this is true, but most of the time it is not. Both political parties in Belize keep harping on micro-finance, loan borrowing institutions, as the solution to starting new businesses in Belize. Nothing could be further from the truth. What Belize needs is an INVESTMENT BANK The Development Finance Corporation could be used for this, but it would take a change in attitude. Instead of crippling entrepreneurship with loans, paybacks and interest payments, the DFC should be buying shares in start ups. The payoff is not immediate but in the future through the route of dividends, taxes and economic growth, including the by-product of jobs.
It is very true that a person has to fail several times, before intuitively learning how to succeed. The lessons do not come out of a school book. They are only learned from the school of hard knocks. I've seen at least TWO former Belizean Bank Managers, who retired and tried entrepreneurship and watched them fail. They didn't even understand why they failed. Running a loan business to start up businesses, like done by a bank, is not the same as entrepreneurship. The only way you can let a young entrepreneur learn, is NOT by giving him/her loans, which have to be paid back, but by putting in capital for shares of the enterprise. A whole host of business lessons are learned by the entrepreneur like this. The Development Finance Corporation should be buying shares in new business enterprises, not even GRANTS are necessary.
Lending money to entrepreneurs is almost a 100% recipe of wiping them out and losing your human resources in Belize. You buy shares and if they fail, the DFC can just turn the money into a GRANT. The entrepreneur can try something else again. Entrepreneurs do not grow on trees, they are not common. Indeed, they are few and far between. On the other hand, the lessons of success can be learned by almost anybody with the right encouragement. It is trial and error learning.
Far as I know from the newspapers, and television, there are no programs really for teaching entrepreneurship in Belize. I've seen some programs advertised for entrepreneurial courses in Belize, to teach the making of business plans ( to borrow money? ). Programs to do your bookkeeping, which is fairly irrelevant in a new small start up of any complexity. Real bookkeeping is one of those lessons you learn as you go along and find you are successful. Necessity then becomes your teacher. Otherwise it is putting the cart before the horse. First you must sacrifice and starve.
What would be more useful are lessons academically, on how to form a company and sell shares and retain voting control of the Board of Directors, every time you seek more investment capital. Otherwise the major investors will let you build a successful business and then steal it from you, through controlling the Board of Directors.
It is with some queasiness that I have asked a local college to let me try an entrepreneurial start up as a school project. It is hard to describe the lessons that will be learned. None of which are academically worth anything. They are all HARD KNOCKS education, you learn through trial and error. The academic mind can neither measure, or comprehend the art of teaching entrepreneurship. If you are not prepared to try and fail, then you are not an entrepreneur. Such education is only learned by hands on education.

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