Assessing entrepreneurial ecosystem of Bangladesh
Entrepreneurship plays a multidimensional development role in a country
Md. Joynal Abdin
Bangladesh entered into a new era of lower middle income country in 2018 and is hopeful to graduate from the list of Least Developed Country (LDC) by 2024. At the same time we have a vision to be a developed nation by 2041. Bangladeshs achievement in different parameters of the Millennium Development Goals (MDG) has been praised by the global think tanks and investment banks. Renowned investment bank Goldman Sachs and economist Jim ONeill identify Bangladesh as one of the Next Eleven (N11) countries along with the Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam in 2005. In one of his recent assessment article published by BARRONS on April 28, 2018 Jim O Neill praised Vietnam for its successful journey of economic development from 2005 to 2018. He described the standard of living in Turkey and South Korea like that of European countries. But he was completely silent about Bangladesh.
Similarly JP Morgan identified Bangladesh as one of the Frontier Five (Frontier 5) countries along with the Vietnam, Nigeria, Kazakhstan, and Kenya in 2007. JP Morgan revised this list of Frontier five in 2017 with Ghana, Dominican Republic, Egypt, Peru, and Colombia where they think have more investment opportunities and prospects. In this case Bangladesh is missing too. Therefore it is time for Bangladesh to rethink with our entrepreneurial ecosystem, why we are missing out in such influential global ratings? Is it like that LDC Bangladesh in 2005 or 2007 was more promising for investment than that of the developing Bangladesh today? Or is it that our entrepreneurial ecosystem is becoming more complex due to absence of any of the entrepreneurial tendency or features?
Lets try to analyze what is entrepreneurship, factors influences entrepreneurs, models of entrepreneurship development, and significance of entrepreneurship for a developing country like Bangladesh. Long lists of scholars have defined entrepreneurship as many ways. For example; Kuratko Hodgetts defined entrepreneurship as a dynamic process of vision, change, and creation. It requires an application of energy and passion towards the creation and implantation of new ideas and creative solutions. It must include the willingness to take calculated risks in terms of time, equity or to marshal needed resources and fundamental skill of building solid business plan, the vision to recognize opportunity and others such as chaos, contradiction, and confusion.
Harvard School entrepreneurship consist of earnest activity that starts, maintains, and develops a profit-oriented business in interaction with internal situation of the business and with the external situation such as economic, social, and political situation surrounding the business. In simplified form we can say that, entrepreneurship is an entity to commercialize an idea or innovation with a profit motive by taking calculated risks. Entrepreneur is that risks taker who organizes all of the factors of production and converts an idea into a profitable venture.
Two types of environmental factors have influenced over entrepreneurship namely internal or controllable factors and external or uncontrollable factors. Controllable internal factors are lack of efficient manpower, absence of technical knowledge or appropriate machineries, managerial know how, cost of the factors of production etc. One of the most important comparative advantages of Bangladesh is its young manpower. But skilled manpower has a shortage in the market; as a result local entrepreneurs are employing foreign managers and technicians in the RMG sector mainly. We have a scope to develop need based industry specific skilled manpower here in Bangladesh. But unfortunately all the public and private universities are generating educated jobseekers with old fashioned curriculums. As a result they are not capable to fulfil needs of different industrial sectors and remaining unemployed. More than 3 million educated youth are unemployed in the country now. Another two million educated jobseekers are entering into the market every year. Therefore competition for availing a job is becoming stringent every day. Government can revise education curriculum in consultation with the industries and adopt concurrent issues to mitigate this challenge. Private sector entrepreneurs could be encouraged to spend money for training up their employees from home and abroad for skills development as well as productivity improvement in the local industries. Next national budget can have probation for allowing private enterprises to spent 5 percent of their income for capacity development of their staffs by offering equal amount of tax exemption.
Uncontrollable or external factors influenced entrepreneurship ecosystem are mostly relevant with inconsistency of government policies, discontinuation of the policies, frequent shift of policies, unjustified taxation system, industrial infrastructures, availability of industrial utilities, corruption in civil and professional bureaucracy, control of law and order situation, collection of political parties and their allies etc. Bangladesh is suffering from each of the uncontrollable factors negative impacts. Therefore doing business here is more complicated and costlier than its competing countries. As a result it is performing measurably in the global doing business index every year.
Our stringent, time consuming, complex and corrupt process of business registrations, permissions is discouraging local youth to be entrepreneurs and demotivating foreign investors to come in.
Bangladesh needs a healthy entrepreneurial ecosystem to sustain as a developing country and graduating into a developed nation, entrepreneurs play a very significant role in economic progress of a country as follows:
1. Entrepreneurs invest their money to innovate process and techniques of increasing productivity in respective enterprises and sectors. Thus they contribute in national productivity improvement and increasing GDP growth of a country.
2. Entrepreneurs are generating employment opportunities by establishing new enterprise and help the government to reduce unemployed manpower and offering a peaceful society.
3. Entrepreneurs adopt new technology in respective industry and facilitate the transfer of technology throughout the nation.
4. Entrepreneurs play a strategic role in commercialization new inventions and product invented by the scientists and scholars of that society.
5. Entrepreneurs invest money and takes risks to produce new products by utilizing resources available in a society.
6. Progress of a business venture or particular industry helps to improve the standard of living of that particular community.
7. They play a curial role in the restructuring and transforming economy from one form to another one. For example Bangladesh economy is transferring from its traditional agrarian types into an industrial one.
8. Balanced industrialization could facilitate a balanced economic development of a country.
9. Entrepreneurship ensures dynamism in industries by lunching innovation products and service.
10. Entrepreneur searches for new international market and creates new market mechanism locally.
Finally; we could state that, entrepreneurship plays a multidimensional development role in a country. Therefore government should ensure a healthy ecosystem to grow new entrepreneurs and ensure proper growth of the existing players by maintaining business friendly policies, regulation, processes, and law and order situation etc.
Political activists may encourage being entrepreneur by giving up unofficial collection from the entrepreneurs.
Bangladesh has to go a long way for creating a congenial entrepreneurial ecosystem and improve our current performance in the global doing business index. Otherwise foreign investors will never come here and local investors will be leaving this country by hook or by cook.
The writer is Executive Director , DCCI Business Institute
