Economy

In these times of economic turmoil, governments and other agencies are reflecting on ways to develop the economy and put it back on track. Statistics show that it is not principally through big companies that jobs are created, but rather through small and medium-sized companies. However, before reaching that point, we tend to forget that behind each company there is a man or a woman who has spent time developing a business idea, pursuing a dream, creating something …

More than twenty years ago UNCTAD set up a programme, Empretec, on how to support and encourage entrepreneurship. It’s one of the UN success stories which should be better known. Thanks to this successful program more than 200’000 persons have been trained to become entrepreneurs all over the world since 1988.
Through the ongoing efforts of the UNCTAD team, networking activities and conferences, many people have set up their businesses, hired others and dragged themselves out of poverty. We wanted to know more about what UNCTAD does in this field, so we knocked on Ms Mugione’s door. Despite her busy schedule, she took the time to receive us and to talk about something that she is really committed to: creating entrepreneurs, helping people to become confident and self-sufficient. So now we now leave the floor to Ms Mugione.

Q: Could you tell us something about your background?

My name is Fiorina Mugione and I have been working with the United Nations since 1987 in different positions, in different duty-stations. I have worked for the UN in Bangkok and New York, OECD in Paris and now I have been in Geneva for a number of years. For the past four years, I have been given the assignment of developing entrepreneurship in UNCTAD. We aim to improve entrepreneurship policy and also to deliver technical assistance to developing countries to foster or inspire entrepreneurship.

I’m an economist and I have experience of international investment. I worked for many years on investment policies and now on entrepreneurship. To me they are linked –– you cannot have one without the other. I also bring some experience from my MBA. I try to bring together all of these elements.

Q: The Division on Investment and Enterprise of UNCTAD every year organizes huge meetings here in Geneva regarding entrepreneurship. Why?

We all know that the financial crisis has hit and it brings profound change. Change also generates opportunities for aspiring new entrepreneurships. We are trying to be constructive and positive in this time of crisis and to bring up optimism, because entrepreneurship can generate the change that the economy needs. It brings innovative products to the market and inspires new policies.

Entrepreneurship can be fostered by the government. The relationship between the public and private sector is changing. With the Multi-year Expert Meeting on Enterprise Development Policies and Capacity-building in Science, Technology and Innovation we are building up awareness about the policy issues to encourage entrepreneurship and what they should be like. In fact, we have identified six areas and we are building a policy tool-kit that shows policy-makers how they can inspire entrepreneurship. The last meeting dealt with education and what you need to do at the policy level to bring change to the education sector. We were looking not only at the formal education system, but also at what the private sector should be doing to provide entrepreneurship education and skills development.

First of all, the fundamental change in education today is the move towards a lifelong learning cycle. With the fast changing environment, today there is a higher need to stay competitive and up to date. In earlier times, you may have spent fifteen or twenty years in school and at the end you could obtain a Ph.D. as the highest level –– and that was it! Now you have to be flexible, learning new skills throughout your whole life. What we find increasingly is that, alongside the formal education system, there are other forms of education and capacity-building taking place throughout life.

For the education sector, what we are recommending is that you start to teach kids to become entrepreneurs at the primary level. We say that an entrepreneur is not only a person that starts his/her own business; he or she is a person who will launch a project and will also behave in a different way in a working environment. In any structure, even in a bureaucracy or a government, you can become entrepreneurial and make things happen.

By starting to teach entrepreneurship to children at the primary level, you can build an attitude among them of wanting to build things, of being self-confident and also being able to calculate risk. Within the Empretec programme methodology that we have developed at UNCTAD, we are focusing at ten competencies contributing towards becoming an entrepreneur, and one of them is “calculating the risk”. Taking a risk is something that people can do, but calculating a risk is something that you need to learn. An entrepreneur needs to calculate the risk and to manage it. Whatever you do in life, especially if you are saving or investing, you need to calculate the risk. Thus, a person with an entrepreneurial attitude will be one who, while managing his/her accounts, would also be calculating the risk, i.e. not taking unnecessary risks. When you are in business you need to calculate risk, to plan and to predict. In life these are useful skills.

So, we start by bringing awareness to children about entrepreneurship and tell them that they are not just studying to get a job. They are studying to learn and they are going to be able to grow and think as entrepreneurs. They will be able to develop their inner strength and become better human beings. Primary education is very important. There should be more school programmes with the participation of the private sector –– visiting a factory or learning about water treatment, for example –– all of these things are part of the business environment. We are also talking about social entrepreneurship –– what the entrepreneur can bring to the community, as entrepreneurs are engaged in providing social services and public goods. The earlier you teach this to children the better because it will encourage them to confront situations in their lives when they are going to lose their job or be faced with a crisis, because then they will be better equipped to answer the question: what do I do now to face these challenges?

If the government cares at the policy level about inculcating entrepreneurship, then education is number one priority. Then you have networking –– the ability of putting people together. Then you have the regulatory framework, support, the general policy and finally finance. There are several ways of facilitating financing. Next, we have the level of implementation.

We provide technical assistance in thirty-two countries. How do we do it? We teach these competencies through a programme consisting of six- to ten-day courses. We teach at several levels. For instance, we have one for low-level literacy groups that can be taught to people who are not strong in writing. We use a methodology that will teach them the basic competencies of entrepreneurship behaviours. Through games and practice we are communicating these messages.

These thirty-two countries include the largest programme covering all the states in Brazil, hosted by SEBRAE, which is a governmental organization. In other countries there may be a non-governmental organization involved or a private-sector partnership. We also work with banks.

Q: What do you do to help young entrepreneurs find funding?

First of all, when we teach entrepreneurship we do not see financing as the big issue. We try to demystify the matter: just because you do not have the funds does not mean that you cannot start your project. If your business idea and your business plan are good, you should be able to obtain funding. Do not make financing the obstacle. Financing is a means to reach your end. But we do recognize that there are backlogs and we try to help.

To give you an example, Judith in Uganda is a young entrepreneur. Judith was still in school when she took our course, and she then decided that she wanted to be an entrepreneur. She made a bid to start constructing low-cost housing for the community where she lives. She does not come from a very poor family but rather a modest family. She went to all her family and friends and said: “I’m going to graduate soon and you are probably thinking of giving me a present, but I will take cash from you instead of a present because I’m going to start my own business”. She was very determined and started to build the first housing block. She started to mobilize a great deal of interest as her determination was evident. She started with funding from her family and friends, but what made a difference was her determination and intention to serve the community. By the time she had completed the first block, she has the support of sponsors –– she was even received by the First Lady and had access to the President. She continues to receive a lot of sponsors for her project and we have helped her. Of course, when she started nobody believed in her, but she believed in herself.

Credit will come when you make the hard step of believing in your project and having a good support system. UNCTAD can make a difference, other institutions can make a difference and there is a lot of help available in making financing accessible. It is an obstacle and there are a lot of people looking into how to facilitate financing and to make changes. From our point of view, we need to make these changes. But in the meantime, what do we do? Lots of businesses have started up in times of crisis; you can read about them in management books. These are enterprises that have been created because there were new challenges and new opportunities. We are also trying to encourage green entrepreneurship and to protect the environment and build novel products.

Q: Do you have special courses for female entrepreneurs?

We teach the same course to everyone because business is the same. Sometimes we may have women-only courses; sometimes we have short and flexible teaching hours. We have found out through our research that women have more issues with self-confidence, planning and networking. Particularly in some developing countries, there are problems with networking aspects. Boys’ clubs are there and are very present, but not for girls. So when we are teaching women we reinforce the messages as we know that these are critical areas. Other than that, the material is the same. We do not believe that there is a difference.

We are also introducing some information technology elements for women, because they are less experienced. For example, we encourage them to have a mobile phone and use it for business, etc. We emphasize cases where women have less opportunity than men because of cultural issues. In certain countries, women would not go to a bank alone. It’s difficult to change such behaviours but, little by little, we teach them that they can achieve self-confidence.

We are also doing a study on “women, innovation and entrepreneurship”. We are studying some Nordic countries and comparing them to developing countries. Although the results have not yet been published, there are some really interesting findings that will be released within the year showing which are the obstacles for women to innovate in business.

Q: What do you do with the different business schools?

With business schools, we are trying to link up our programme. We are trying to participate in their network and to develop new business models for the poor. We would like business schools in as many countries as possible to think along these lines, encouraging entrepreneurship, investments, etc.

Q: Is it difficult to draw the attention of business schools to entrepreneurship?

There is a lot of interest from business schools in entrepreneurship, and quite a number of them have well-developed courses. However, the main problem is the traditional education model of business schools which is still very academic and theoretical; focus on behaviours and attitudes is lacking. Entrepreneurship, we say, is a way out of poverty. That’s the reason why we would like to involve business schools to work with the poor and encourage them –– building awareness about what we need to do to get people out of poverty. People cannot continue being poor, and we would like to encourage them to get out of poverty and build up their wealth. Often it can be done, and people have a lot of energy for survival. But if you can also make them think: “I can do better, I can improve my life”, there is a change. Also development aid is not designed to maintain them in poverty but to get them out of poverty. We believe it’s possible. I wish we had more resources to make changes in more people’s lives. 200,000 people since 1988 have been trained around the world, but it’s not enough! We have been operating for twenty years in thirty-two countries, but it’s not enough!

Q: If somebody said: “I will support your programme”, what do you need and what would you like to achieve?