Entrepreneurship in Latin America

Entrepreneurship in Latin America

Introduction

In the past few years, a lot of policy makers emphasized on the importance of entrepreneurship especially in the developed and the developing nations. It has gained immense amount of attention with the passage of time as it has been actively contributing to the economic development. It contributes in different ways like acting as an essential and key channel which converts ideas that are innovative into different economic opportunities. It also acts a means of employment generation and also paves way to increase the productivity. Most importantly it creates competitiveness by reviving networks that are social and productive. Considering the latest studies and literature in mind, they are now elucidating the creation process of the enterprise. Entrepreneurial process kicks off from a stage when a probable entrepreneur gets an idea and motivation to start up a new business or venture followed by its setup and development and growth. Still it may be unsure, that what are the main factors that encourage individuals to start up a new business or enter in to a volatile and competitive organization. This paper aims to recognize and explore the factors that lead to and stimulate entrepreneurial activity focusing on Latin American region.

Discussion

Entrepreneurship can be defined as the ability or capability to start and develop new business ventures. With technological development and new business models emerging; it has enabled the shift towards new small and large ventures from corporations during the last two decades (Acs and Audretsch, 1988; Jorgenson, 2001; Audretsch and Thurik, 2001; Thurow, 2003). Entrepreneurship paves way for increased economic performance by creating competition, commencing and establishing innovation and enhancing rivalry (Wong et al., 2005). However, the entrepreneurial activities and efforts differ from country to country or regions (Wennekers et al., 2005). Keeping the history of Latin America in mind, various economists have devised and proposed various formulas and guidelines that would help in contribute in to economic growth of Latin America (Carree et al., 2002). Thus a lot of specialists have made convincing arguments that entrepreneurial activities are closely related and linked to economic growth and institutional development of any country. According to Mises ([1949], 1996), he described entrepreneurship as a human action that expresses creativity, originality which is a basic and major driving factor of economic growth.

A lot of emerging economies like Singapore, Korea or Israel, have undergone significant changes and renovations in the last 20 years in terms of institutional and economic growth. On the other hand, both Africa and Latin America have shown slower progress in terms of growth and development. Therefore Latin America has been less successful in recuperating its economic performance compared to the different emerging markets. Due to this, entrepreneurial activities have not been growing at sustainable rate (Blejer, 2006; López-Claros et al., 2006). This was due to the fact that economies of Latin America possesses limited and inadequate ventures under the concept of entrepreneurial activity as it has a lot of restrictions related to the creation of knowledge ...