year-old Mathew Kiilu launched a sunflower oil-pressing business in 2007, he had to overcome unexpected obstacles. To avoid high rents in his hometown Nairobi, he located his plant in a far-off village. But a power company took 10 months to provide electricity to his business, and post-election violence cut him off from sunflower seed suppliers. He survived by finding a power generator for electricity and alternate sources of sunflower seeds. The challenges Kiilu faced are familiar to entrepreneurs in developing countries. The general rules for small businesses to succeed in the developing world are not that different from those in the developed world. What is different is the much higher level of energy and perseverance required of entrepreneurs in developing markets in which institutional and infrastructure hurdles often are daunting and persistent. These hurdles range from onerous government regulations to poor infrastructure to weak law enforcement. “It takes a great willpower to do business in my country,” said Kneeyee Alex, founder of ESTREET, a foundation promoting entrepreneurship in Nigeria. Many policymakers and development experts in wealthy countries view entrepreneurship as a way of providing self-employment and creating jobs in markets that offer limited opportunities for wage employment, according to Wim Naudé of United Nations University in Helsinki, Finland. Entrepreneurship also increases social mobility and empowers marginalized groups such as women or migrants, Naudé said. Self-employment is often the only option for young people who lack experience and connections necessary to secure jobs in the private or public sectors. But in countries with less-than-friendly business climates, showing persistence and gaining entrepreneurial experience counts more than anywhere else, Naudé said. For young people, Naudé said, the lack of experience makes it particularly difficult to see and seize business opportunities. In the United States or United Kingdom, aspiring entrepreneurs can benefit from entrepreneurship programs and courses, which rarely are available in developing countries. In addition, young people usually lack the collateral necessary to get a bank loan and are more susceptible to being side-tracked, for instance, into illegal activities, according to Naudé. Having a mentor with some business experience or knowledge often helps. Kiilu got helpful advice from his father, who also runs a business. Alex recommends that entrepreneurial novices connect and share their stories with each other. “Usually there will be someone with a solution,” he said. Another advantage of networking is that other entrepreneurs or business experts, either local or international, may offer vital contacts or other forms of support. Such mentors can eventually become investors or customers, said Ayman El-Tarabishy of George Washington University in Washington. The Internet equalizes chances to succeed for entrepreneurs in the developing world who understand technology well. Young entrepreneurs with small businesses often survive by street smarts, as illustrated by Kiilu, who learned to fix his equipment when he couldn't find anyone to do it for him. Small business owners also resort to finding public-sector “patrons” or building their businesses “under the radar,” without government registration. A public sector patron might be a government official who does favors for a young entrepreneur. However, the lack of official approval, a title to property or an enforceable contract limits small businesses' ability to grow. Informal businesses have higher capital and transportation costs, more storage problems, greater difficulty hiring quality staff and less ability to enforce contracts, according to Julio De Castro of Babson College in Wellesley, Massachusetts. For these reasons, more ambitious entrepreneurs often bend over backwards to register their firms and obtain necessary licenses. Whatever they do, they must resist corruption and establish a reputation for high ethics, according to experts. “Stand firm on ethics and radiate it around you and simply be persistent,” said Shaffi Mather, a social entrepreneur in Kerala, India. As governments recognize the importance of entrepreneurship to economic development and growth, they slowly are loosening regulations and implementing programs to support entrepreneurs, said Kenneth Morse, an entrepreneur and visiting professor at ESADE Business School in Barcelona, Spain. He noticed positive changes in attitudes toward entrepreneurship in Jordan, Lebanon, the United Arab Emirates and Pakistan. In 2010, Kazakhstan, Rwanda, Peru, Vietnam, Cape Verde, Tajikistan, and Zambia were among economies that improved the most in the ease of doing business, according to the World Bank report. This article has been contributed by the Bureau of International Information Programs, US Department of State
