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Hunting for Heffalumps

David Burnett
Founder, Technopreneurial.com
September 2000

The Entrepreneurial
The History of
Entrepreneurship Theory
& Economic Development
The Supply of
Two Case
Calling for

Entrepreneurship-led development strategies have been successful in several countries. The following case studies provide a glimpse at some of the policies that have been used to increase the supply of entrepreneurship.

Entrepreneurship in Nigeria

Africa is the poorest, less-developed continent in the world. In most countries in Africa, the governments have typically played a significant role in determining the course of development. Many state-owned enterprises in Africa were created when it was believed that the fastest route to development occurred when the state took on the role of the entrepreneur. Unfortunately, in many countries, the performance of these state-owned firms, or parasatals, has been substandard. Part of the problem with the state-owned enterprises is that they are run by bureaucrats and are plagued with red-tape. Thus, these firms are typically run according to state procedures, instead of according to cost-cutting and profit-maximizing concerns. The typical result is rampant inefficiency (Elkan, 1988). Although Nigeria was at one time characterized by such inefficiencies, it has recently has pursued entrepreneurship encouragement policies, and the initial indicators suggest that the policies have been successful.

In Nigeria the state-owned enterprises traditionally clogged business opportunities and state restrictions prevented entrepreneurs from entering the market. However, in the mid-1980s, Nigeria abolished its marketing board, which prevented entry into certain industries, and opened up its markets to competition from domestic entrepreneurs. Additionally, lower taxes and increased price ceilings have increased the incentives to entrepreneurs. Although Nigeria is still plagued by many development problems, "preliminary evidence suggests a favorable response by the private sector to the new entrepreneurial opportunities thus created" (Elkan, 1988).

Technopreneurship in South and South East Asia

Entrepreneurship in parts of South and South East Asia has recently undergone rapid revitalization. The term "technopreneur" arose from within Singaporean culture to describe an individual whose entrepreneurial endeavors focus on a technology-centered enterprise. The government of Singapore has embraced technopreneurship and has launched several initiatives to promote technopreneurship as a means of economic development. In the past three years, Singapore has restructured the focus of many of its economic policies to fully support the growth and development of domestic technopreneurial firms.

Singapore is a small island city-state and has few natural resources that it can exploit in order to promote economic development. Thus, Singapore has had to largely rely on its people and human capital for the sustainment of development. Initially, the government improved the country's human capital by dedicating a large amount of the annual budget to education expenditure. However, now that the country can boast high literacy rates, traditional human capital development is no longer sufficient to sustain economic growth.

Recognizing the need for a new strategy for economic growth, Singapore's government turned towards the technology sector. With the creation of the Technopreneurship 21 Initiative and Ministerial Committee, Singapore began promoting technopreneurship encouragement policies. For example, the government now sponsors university courses on technopreneurship and helps connect venture capital companies with budding technopreneurs. This greater openness has encouraged many new start-ups to form, and the country is well on its way to fully integrating itself into the New Economy. Singapore's success with technopreneurship policies has influenced other Asian countries to begin such initiatives. For example, Malaysia recently launched its Multimedia Super Corridor to encourage domestic technology development, and Hong Kong recently completed the construction of its CyberPort, a technopreneurship-friendly business district. Finally, technopreneurship encouragement has also taken place in certain cities in India.

As a whole, India is still one of the most underdeveloped countries in the world. Despite the grim situation that faces much of the country, several technology-focused cities have recently had impressive success with technology driven development. In 1991, the Indian government introduced numerous market reforms to overhaul the Indian economy. The information technology industry is probably that which has benefited most from the reforms. For the educated urban class, information technology businesses have provided a new source of income. To utilize the educated youth, who have been trained in engineering and computer programming, international IT companies began locating in India, particularly in Bangalore. The result is that Bangalore has become a powerhouse for software production. Although Indian technopreneurs were not originally at the center of Bangalore's technology development, they are now beginning to pop up throughout southern India, largely due to the government's help in creating "the right climate to encourage this sunrise industry" (Soota, 1998). The government created policies to boost technopreneurial education and to encourage the creation of domestic software parks. Additionally, domestic entrepreneurship is encouraged in Bangalore with tax incentives and a relatively advanced communications infrastructure (Soota, 1998).

Bangalore's localized success is gaining great praise for its rapid development. Although Bangalore was the first major technology center in India, Hyderabad is now following its example. Although smaller in scale, the success of Hyderabad suggests that the Bangalore model of technology-led development may be applied in other parts of the country. Since much of India is still far behind Bangalore and Hyderabad in terms of human capital development, it is unreasonable to suggest that all of India should adopt policies to promote technopreneurship. Nonetheless, the rest of the country could likely benefit from the implementation of policies that encourage entrepreneurs to fill the market's deficiencies, whatever they may be in the local markets and specific regions of India.

 Calling for Heffalumps

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