I recently read a study about entrepreneurship in Latin America. When we talk about start-ups in our sector, we immediately think of the technology and digital publicity sector. It is good and interesting to remember there are thousands of start-ups in nearly all sectors of the economy and that in many ways they face the same problems as digital start-ups.
Below is an overview on entrepreneurial ventures in Latin America
The reality of entrepreneurs in Latin America is very complex compared to other regions around the world. In contrast to their European or Asian counterparts, Latino entrepreneurs must deal with limited human capital, less resources, lack of innovation and dependency on financing support, among many other factors.
However there is high potential in some Latin American countries which have attracted the attention of reflectors.
According to a study carried out by the Global Entrepreneurship Monitor (GEM) in 2014, the region’s most entrepreneurial countries were Chile, Uruguay and Peru. Based on the type of ventures that were being started in those countries, entrepreneurs are motivated by identifying new market opportunities. They pursue them voluntarily, not because of a lack of other sources of work.
According to the same study, Uruguay and Peru have five opportunistic ventures forevery necessity venture, while Chile registers 4.6. Similarly, Uruguay and Chile are countries with greater probabilities of creating jobs through their entrepreneurial ventures.
In terms of the gender divide in entrepreneurial activity, GEM reports that Brazil has the best gender equality indicator in entrepreneurship. However, this is not the case with Argentina, Colombia and Uruguay.
In a survey of 24 countries in Latin America, Europe and Asia carried out by Amway the countries with the most people who could imagine themselves with an entrepreneurial venture were Colombia (63%) and Mexico (56%). This same survey revealed the reasons to start a venture are: independence, personal fulfillment, to have a second income or more free time and unemployment.
Similarly, the (2013) Latin American Entrepreneurs Index published by the Latin Business Chronicle mentions Chile, Panama, Mexico and Colombia as being the four most important countries for Latin American entrepreneurs based on variables such as setup costs, start time and financing.
It is worth highlighting, that in Colombia for example, there are around 790 entrepreneurship support organizations (public, private, led by chambers of commerce, governments and city councils). At Adsmovil we have seen for ourselves how Innpulsa, a Colombian government program, supported us with financing to open up a market in Brazil. The support they gave us and the investment monitoring was carried out very professionally and was of significant help to Adsmovil.
What challenges do the most entrepreneurial countries face?
A survey carried out by Endeavor of more than 900 leading entrepreneurs around the world identified access to markets, talent, financing and support as the four main factors influencing a company’s success and growth.
I would add innovation development and exploitation of new technologies. Technology gives entrepreneurs the opportunity to do more with less, to participate in global value chains, increase productivity, production and also access a greater number of business information sources as well as direct exportation of goods and services in collaboration with big companies.
Latin American entrepreneurs have understood this well and are focusing a large part of their efforts on digital start-ups. We can find many examples of success throughout the region. The NXTP Fund (Next Experience) was founded in Buenos Aires but now has regional presence. It supports technological start-ups throughout Latin America. To date, it has supported nearly 200 ventures.