New research argues that the world’s poorest countries need to change their approach to entrepreneurship, if they want businesses to boost sustainable development.
The 2018 Report on Least Developed Countries (LDCs) by the United Nations Conference for Trade and Development (UNCTAD) was launched at the Commonwealth headquarters in London on 21 November, outlining how ‘transformative entrepreneurship’, with the right support, could create jobs and help end poverty in these countries.
Presenting the report, Chief of the LDC Section at UNCTAD Rolf Traeger said that while nearly half the adult population in LDCs is engaged in entrepreneurial activity, most involve low-wage self-employment, with little innovation and low value-added activities.
“These are not the type of entrepreneurs who can lead the development process in the long run,” said Dr Traeger.
Instead, governments should focus on supporting ‘transformative’ entrepreneurs who are innovative, growth-focused and inclusive. This calls for government policies that go beyond the usual focus on enhancing business environments, to include long-term support throughout the lifecycle of dynamic businesses – especially medium sized companies seeking to grow.
These high performing enterprises will enable LDCs to take advantage of opportunities in global value chains.
The Commonwealth’s Acting Head of International Trade Policy Teddy Soobramanien welcomed the findings of the report, highlighting the importance of structural economic transformation in the 14 Commonwealth countries classified as LDCs.
“This report provides us with the opportunity to reflect on how domestic policy intersects with trade policy formulation so as to generate the entrepreneurial opportunities needed to break out of poverty,” he said.
Head of Social Policy Development Layne Robinson supported a ‘system-wide approach’ to promoting entrepreneurship, which is multifaceted, connects sectors, and engages all stakeholders from government to grassroots.
“The question is how do we shift the mind set in our countries to move to this new approach. We need to bring ministries together and think about industrialisation and job creation, entrepreneurship and development, in a holistic and coordinated manner,” he said.
Discussions also focused on the role of youth in transforming the economy, spotlighting the work of the G20 Young Entrepreneurs Alliance (represented on the panel by Alex Mitchell), the Commonwealth Association of Young Entrepreneurs (CAYE), as well as a newly launched Commonwealth toolkit for promoting youth entrepreneurship in blue and green economies.