Opportunity is an odd creature. It knows no bounds; it can be neither compartmentalised nor monopolised. The nearest thing to it is air. It’s everywhere and available to everyone. And just as air is essential to grow life, opportunity is essential for economic growth.
To some that might sound fanciful; at the very least an overstatement – but it’s not. For; unless economies exploit opportunities, they’ll stagnate, get overtaken by their competitors and eventually contract.
With the possible exception of certain oil states, every country on the planet needs to constantly find new revenue streams as well as re-invigorate old ones. And for that they need a special individual – the ‘Opportunity Entrepreneur’.
As distinct from the “Subsistence Entrepreneur” – aka, the “Necessity Entrepreneur” – this individual is not driven by the need to put bread or rice on the family table; his/her motivation is to create an enterprise in its own right.
More to the point, the aspirations of these individuals are big. And that’s precisely why governments need them. Opportunity Entrepreneurs grow their businesses faster, employ larger workforces and are responsible for adopting and developing greater levels of innovation. A study by the United Kingdom-based innovation foundation, Nesta, showed that while these individuals only made up 6% of all the country’s entrepreneurs, from 2002 to 2008 they accounted for 50% of the UK’s net job creation.
The Philippines is teeming with Subsistence Entrepreneurs, such as single-licence owner/operators of trikes, pedicabs and jeepneys; proprietors of sari-sari stores, even recyclers of scrap metal and other waste materials. They’ll provide work for their immediate families, but they’re never going to be large employers. Neither are they going to contribute much to the country’s economic growth. Nor are they going to introduce much by way of innovation; they’re not going to be developing new products and services and new processes for delivering them.
Governments, largely, are only just beginning to wake up to the true worth of the Opportunity Entrepreneur. They’ve bought into the idea that innovation is vital – that entrepreneurship is something that should be factored into their economic plans – but few really seem to have grasped the extent to which these particular individuals can propel their economies forward.
Instead, they tend to mimic each other by going down the same paths to find them – digital technology and the Green Industry seem to be the safest and the most common. And so, they all pile down them – almost frenetically. But if everyone exclusively is attempting to exploit the same opportunity, that sort of misses the point.
Yes, of course those sectors are essential to grow and develop, and governments certainly have to be in them – but what about all the others; manufacturing, tourism services for example. Or, in the case of the Philippines, island property.
On 3 July 2016, The Volatilian™, published an article – Sea change for Philippines real estate. This briefly explored an innovative idea floated by President Rodrigo Duterte, who at the time had been in office for all of four days.
His idea – and sadly we’ve heard no more about it, because it has tremendous potential – was to sell-off, or lease long-term, some of the archipelago’s thousands of small unnamed and uninhabited islands. A simple deal – practiced around the globe – that would generate much-needed public revenue without requiring public expenditure. It’s a classic example of opportunity entrepreneurship – it identifies a resource and fits it to an unexploited market.
Now we turn to the 2018 Global Entrepreneurship Index (GEI) and the section dealing with “Opportunity Startup”. The GEI, produced by the Global Entrepreneurship Development Institute, evaluates 137 countries world wide. For our purposes, we’ve extracted the results for the countries of the Association of Southeast Asian Nations (Asean), to show how the Philippines is performing among its peers.
To evaluate this indicator, the GEI’s compilers asked these two questions – “Are entrepreneurs motivated by opportunity rather than necessity?” And “Does governance make the choice to be an entrepreneur easy?”
The first of these questions, we’ve explained in our preamble; the second needs a little further explanation. What the index is trying to establish is whether governments handicap opportunity entrepreneurs through poor governance such as over regulation, bureaucratic red tape, and tax burdening.
Here are the Asean scores for Opportunity Startup. Singapore, 100%; Malaysia, 61%; Brunei, 34%; Cambodia, 34%; Philippines, 34%; Thailand, 34%; Indonesia, 31%; Laos, 30%; Myanmar, 24%; Vietnam, 20%.
With the exception of Singapore and Malaysia, no country in Asean is doing well here. To some extent, then, this reflects the inability of governments to really understand the value of opportunity entrepreneurs. They may, here and there, support some of their individual projects, but as a class they remain below the radar.
Of course the other issue – governance – will also be reflected in the Philippines’ score. This is a country with a massive bureaucracy which is both cumbersome and inefficient. And although efforts have been made to improve the ease of doing business in the Philippines, acres of red tape and petty regulations still throttle the life out of new and young businesses as they try to find their feet. Corruption – government officials on the take – is another matter. All that needs doing away with.
But equally important is for the public and the private sectors in the Philippines to provide the oxygen for opportunity entrepreneurs to breath and flourish – indeed, it’s an opportunity they should seize. Fact 1: Those who’ve started small businesses out of necessity cannot drive economic growth. Fact 2: Those who spot new opportunities and address market needs by launching new enterprises can.