OXFORD, Ohio — “We didn’t know what the word ‘start-up’ was two years ago. I didn’t know anything about it,” said Gary Urteaga, a Peruvian entrepreneur who co-founded the successful online ticket purchasing platform Cinepapaya.com.
Entrepreneurship as part of an advanced start-up culture is a new phenomenon in Latin America. According to the World Bank, although 60 percent of Latin America’s workforce is employed by small businesses, a lack of innovation has subdued the region’s competitiveness and business growth.
Latin America is known for its export of raw materials, not its novel business ideas. Eight percent of the global population lives in Latin America, but not even three percent of the world’s patent applications come out of this region.
In the struggle against poverty, many people in Latin America have embraced an entrepreneurial drive as a survival mechanism. Window washers, fruit vendors and newsies fill the streets of Latin American cities. When no jobs are available, new businesses arise.
Yet in recent years, given greater human development and successes in poverty alleviation, Latin Americans are increasingly choosing the entrepreneurial life rather than taking it up out of necessity.
The current challenge for Latin America is to become an entrepreneurial society with a start-up culture dedicated to both business creation and growth.
Augusto de la Torre, the World Bank’s Chief Economist for Latin America and the Caribbean, explains that “the landscape of the economy in Latin America is such that firms tend to start small and stay small. There’s nothing bad about being small, per se, but staying small forever is a problem.”
President Sebastian Pinera of Chile declared 2012 and 2013 as years of entrepreneurship and innovation. In line with this declaration, Pinera has launched Start-Up Chile, a government program that provides grants and work visas to international entrepreneurs, in the hopes of bringing new ideas to Chile and bolstering the country’s own entrepreneurial culture.
Similar programs are beginning to take root in other countries throughout the region.
Over the past ten years, 50 million people in Latin America have been boosted out of poverty and into the middle class. It is this segment of society that now has the power to transform small business culture in the region, and create new and competitive ideas for consumption on the world market.
Poverty remains a pressing issue in Latin America. Basic social services, like healthcare and education, continue to have priority over research and development for many regional governments. Entrepreneurship, however, is already a part of life for most of the Latin American workforce. The next step is to harness creativity in a way that avoids stagnation and supports ongoing, competitive growth.
– Kayla Strickland
Sources: Forbes, BBC, World Bank