Creating entrepreneurship awareness

Governments and their agencies can promote awareness about the importance and role of entrepreneurship through various programmes. Utilizing educational networks, mass media, and confidence-building programmes that include specific and non-punitive exit-route legislation and financial assistance schemes for rehabilitation or closing failed ventures are all excellent tactics. These measures would promote an entrepreneurial culture in an economy.

A wide range of factors has contributed to this growing interest in entrepreneurship education and training. There is increasing recognition of the critical role education can play in developing entrepreneurial mindsets, attitudes and societies. In higher education institutions, entrepreneurship learning based on successful entrepreneurial role models may serve as a driver for more sustainable development. Theoretical perspectives, such as human capital theory²⁰⁴ and self-determination theory²⁰⁵, note that entrepreneurship education is positively associated with entrepreneurial intents of students. They provide adequate know-how and skills and motivate them to develop their entrepreneurial careers.

Incubators and accelerators
Governments drive specific mechanisms to support the development of entrepreneurship.  For instance, incubator/accelerators are structured support programmes for entrepreneurs, typically aimed at helping them to develop their business model, prepare for growth, and secure investment. Business incubators and related enterprise support systems have emerged as popular mechanisms to promote economic development in developing and developed countries. Both incubators and accelerators link MSMEs to investors and key influencers. Startup incubators begin with companies (or even single entrepreneurs) earlier in the process and do not operate on a set schedule. If an accelerator is a greenhouse for young plants to get the optimal conditions to grow, an incubator matches quality seeds with the best soil for sprouting and growth. Table 2 illustrates the differences between business incubators and accelerators.

Table 7. Differences between incubators and accelerators

Source: Cohen, S. (2013), “What Do Accelerators Do? Insights from Incubators and Angels”, Innovations, Vol. 8, Nos. 3–4, pp. 19–25.

While there are several definitions of business incubators, they are generally facilities designed to create a conducive environment for new and small ventures to help them cope with the difficulties encountered in the initial stages, survive and grow and become successful mature businesses. They can offer essential services ranging from physical space at subsidized rates, shared necessary business services and equipment at little or no cost, business assistance, including legal and technical advice and financial support.²⁰⁶ A business incubator is a firm that helps new MSMEs progress by making available such services. Business incubator programmes are, therefore, an essential element of support infrastructure for MSMEs and entrepreneurship. The objectives of incubator programmes are to help new MSMEs avoid the risks of failure and generate economic growth.²⁰⁷ They can receive subsidies from governments, and government funding is often earmarked in developing and developed countries. While many incubators still aim to fuel job creation, additional objectives include enhancing regional economic competitiveness, fostering innovation, and creating a more entrepreneurial environment in the community.²⁰⁸ It is important to note that incubators support startups entering the early stages of building their business. 

Unlike incubators, business accelerators push the growth of MSMEs with a business model in place. One of the significant differences between accelerators and incubators is in how the individual programs are structured. Accelerator programmes usually have a set timeframe in which respective companies spend anywhere from a few weeks to a few months working with a group of mentors to build out their business and avoid problems along the way.

Business development services
MSME productivity can be constrained by many aspects of the firms’ limited internal capabilities in human resources availability and utilization, access to finance for investment, and innovation practices. Central to this is the lack of adequate managerial ability within the MSME. Business advice can help MSMEs identify the most significant obstacles to their productivity growth and their actions to overcome them. Business development services (BDS) enhance the performance of individual businesses, allowing them to compete more effectively, operate more efficiently and become more profitable.²⁰⁹ BDS is a broad term covering both services and physical facilities for entrepreneurs to develop their business capabilities. Figure 4 illustrate the concept, clustered in three different service types: 1) general information, 2) consulting, and 3) training. These have six other topic areas: 1) sales and marketing, 2) production, operations and information communications technology (ICT), 3) human resources (HR) management, 4) financial management, 5) strategic management, and 6) legal issues and regulations. BDS also includes physical infrastructure, for instance, business incubators, providing a mix of “hard” infrastructure, such as premises and “soft” services. BDS includes training in general business management, entrepreneurship, and particular business skills such as marketing, accounting, finance, counselling and advice.

Figure 5. Business development services matrix

Source: OECD (2017), Supporting SME Competitiveness in The Eastern Partner Countries Strengthening SME capabilities through a sustainable market for business development services in Belarus.

In supporting the development and sustainability of MSMEs, BDS help to increase employment, generate higher incomes and provide economic security. Such interventions at the micro-level contribute to poverty alleviation and empower vulnerable groups through economic development and growth.²¹⁰

Guiding principles of best practices in BDS
The guiding principles are compiled from international best practices in the delivery of quality business services to MSMEs. Following are the recommended guiding principles of best practices in BDS that policymakers can adopt for the benefits of MSMEs:

• BDS services provided to the right clientele
  MSMEs exhibit good entrepreneurial characteristics and can use the services to grow and become more competitive and profitable. 
• BDS are demand-driven
  Services (especially information services and training) are mostly supply-driven and do not reflect the clients' real needs. Ensuring that services are demand-driven can create a more significant and more positive impact on the business, and it can encourage clients to start paying for the services they value.
• Strong sense of ownership
  International experience shows that the best business providers are people working in an environment, which induce commitment and a strong sense of ownership.
• Maximum outreach
  Through maximum outreach, MSMEs can obtain good quality services that have a positive impact on their business. This is often best achieved by strengthening private sector service providers, creating better networks between service providers, and promoting informal learning systems.
• Integration of BDS and financial services
  Whilst there are differences in opinion about whether the same organization should provide both BDS and financial support services, integrating these supports is essential. One approach to achieving this is accommodating both services in the same organization whilst ensuring that the unit in charge of financial services operates independently from the one providing BDS.
• Cost-effectiveness
  Achieving maximum cost-effectiveness yields many positive effects. More clients can be served with the same available resources, and services can be reduced. The reduction of costs may be achieved in several ways. For example, improvements in working procedures or the introduction of office automation, enhancement of staff productivity through performance-based bonuses, and sub-contracting some services can be sub-contracted.
• BDS services achieve the most significant impact
  BDS providers must regularly assess the impact of their services. This can be done in various ways and can be complemented by developing performance indicators to measure the desired effects.
• Financial sustainability
  This term refers to the long-term impact of the services on the enterprise. Governments may provide funding for BDS and “public goods” such as information, education and training and other services, such as infrastructure provision.