Published : Jan. 16, 2012 - 19:06
Except for some conglomerates, most companies are bracing for the prolonged global economic slump with plans to downsize or delay investment and recruitment, or to promote managerial efficiency.
But a corporate management expert says opportunities for entrepreneurs do not disappear even during an economic crisis.
“It’s not that people don’t need TVs anymore, it’s that they don’t need expensive TVs, for example,” said professor Pablo de Holan, IE Business School chair of the Entrepreneurship Management Department.
“Large firms have a hard time adapting, but entrepreneurs can, and they need to understand the basis that the crisis brings and move on it,” he told The Korea Herald during a visit to Seoul last week.
Holan emphasized that for most countries, the issue was not how to foster entrepreneurship, but how to remove barriers that impede the startup of new companies.
“One of the issues we see around the world is that it’s immensely difficult to create a firm. The large countries in Europe are not entrepreneur-friendly so that creates a series of problems that makes it complicated for people,” he said.
Another is financing
“I’m a bit skeptical about that because you can give financing to bad ideas,” he said. “Still, getting the money and making sure there is a system of people willing to finance ideas is important.”
Holan suggests that would-be business owners not put their entire lifesavings in a startup.
“I don’t think the government can or should give microloans to people, but there’s got to be a place or nexus for people who want to invest with people who have ideas … that can be done,” he said.
Pablo de Holan
Holan noted that there have been good experiences around the world where governments assisted banks for the purposes of lending money.
Taxes are also an avenue where governments could play their hand in assisting those with ideas move forward into a viable business.
“What happens if investors failed? Hopefully they can deduct their losses from their taxes. But if the investor has to absorb the loss then it would make them much more reluctant to open small firms,” he said.
The third important factor is giving future investors the right tools to make their dreams come to fruition.
“Entrepreneurs believe they are unique, like all 7 billion people on the planet, some of the mistakes they make are (not) predictable, some of the mistakes are systematic,” Holan said.
To avoid mistakes and learning how to prepare a proper business plan, Holan suggests training either from an institution or with government sponsored programs, if offered.
In the nation’s capital for example, the Seoul Global Business Support Center offers business courses to foreign nationals free of charge.
“Training is important because to some extent, entrepreneurs are so in love with their ideas that they forget that their idea is to get someone to buy what they are selling.”
Holan believes that there is more to that notion; that entrepreneurs need to bring value to the customer’s mind, “and that part entrepreneurs don’t understand very well,” he said.
By Yoav Cerralbo (
yoav@heraldcorp.com)