When Capital is Not Enough
The Impact of Culture and Social Norms on Entrepreneurial Efforts in the Far East
I had the good fortune of stumbling across an article on BBC World News today related to entrepreneurship in Singapore that made me think a little differently about macro-level cultural influence on entrepreneurship. Singapore made a commitment to entrepreneurship in the early 2000s (governance, regulation, education) per the recommendations of an economic review committee. Today it ranks number one in the world for ease of doing business and number four for starting a business. It is viewed as the technology and start up hub of South East Asia. In addition to government facilitation and the removal of regulatory barriers, as well as existing infrastructure, Singapore is flush with investment capital. What was striking to me was that with all of these (extremely significant) structural supports in place to support entrepreneurship it is actually a cultural hang up that is dragging on the spirit of entrepreneurship.
In short, in many Asian cultures failure is unacceptable and difficult to recover from. In the words of Ron Mahablr, Founder of Asia Cleantech Capital, "In California if you fail that's not necessarily a bad thing...But in Asia if you fail it's tough to turn around from that."(From BBC article) As well all know, failure is far from uncommon in the entrepreneurial realm. In fact, it is almost to be expected at some point over the course of an entrepreneurs career (especially in the event they pursue multiple ventures). The article asserts that in Asia fear discourages young people from pursuing entrepreneurial careers. Furthermore, the education system focuses on conceptual learning with objective right and wrong answers. In contrast, at the inception of entrepreneurial ventures things are seldom so black and white. Given all Singapore has going for it in the entrepreneurial space (government support, infrastructure, investment) should the next step be an attempt to tinker with the cultural outlook on mattress of success and failure or creative and original thinking? Can this be done? Or frankly, should it? Perhaps Signapore is destined to be a land of opportunity for all with the ideas and drive to succeed in their respective ventures a la Silicon Valley. I am interested to hear your thoughts on this...
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ReplyDeleteHi Marcel,
ReplyDeleteGreat post! And you are absolutely right in your thinking about cultural influences, especially in the Indian society. I grew up not knowing a single person who started his/her own business, no one in my family did it (my dad tried but was considered unsuccessful so gave up early on) and very few of my friends in India are doing it. Albeit, the culture today towards entrepreneurs is changing, but overall, there is a huge stigma associated with failing. So many people stick to the 9-5 jobs, and in specific sub-cultures like mine, people stay away from starting something of their own. There are a few sub-cultures, though, that only believe in starting their own businesses, so you will see that a large percentage of really small to mid-level to extremely large businesses are owned by these people!
So, I didn't really answer any of your questions about Singapore, but your post does point out that cultural biases play a very important role in entrepreneurship.