Entrepreneurs, Risk Takers, and the Economy

Article excerpt

Byline: Fidel V. Ramos

THE annual "Ernst & Young Entrepreneur of the Year (EYEOY) - Philippines" Award organized by the SGV Foundation is one of the most hotlycontested business events of the year. EYEOY has evoked tremendous interest and wide participation due to the international prestige it gains for the winners and the high credibility of the SGV-EY combination - which is supported by strategic partners of the likes of the DTI, AIM, PBSP, and the Philippine Stock Exchange. In an awards banquet last 20 March at the Makati Shangri-La Hotel, the 2006 winners were announced after meticulous screening, financial investigation and evaluation of each nominee's management practices, market outreach, job generation, corporate social responsibility, and benefits to the economy in general. Senen Bacani, Chairman of La Frutera, Inc. (former Agriculture Secretary), won the coveted EYEOY-Philippines Award, in addition to garnering the "Master Entrepreneur" Award.

In my keynote address as Guest of Honor, I called for the nurturing of a nationwide entrepreneurial culture - impelled by calculated risk-taking and deliberate choice on the part of smart businesspeople to become "better than the others." While it is true that necessity is the main driver of entrepreneurial activity, this is primarily because of the poverty and joblessness of so many Filipinos. Thus, most people wrongly think of entrepreneurship as just "buy-andsell" ventures. (Please read my Sunday Bulletin columns of 04 March 2007, "Elections, Poverty and People Empowerment" and 11 March 2007, "Empowerment Thru MicroCredit/Finance/Enterprise" on the positive contributions of entrepreneurship against which we should measure the promises of candidates in the coming elections.)

Statistics indicate that entrepreneurial activity is increasing steadily in our country, particularly in the field of micro, small, and medium enterprises (MSMEs). Making up 99 percent of all our registered business companies, MSMEs are particularly important to the economy since they employ 70 percent of all our work-people and contribute 32 percent to our GDP. According to the National Statistics Office, the regions with the largest number of MSMEs are the National Capital Region, Southern Tagalog provinces, and Central Luzon. Economists distinguish people who become entrepreneurs out of necessity from those who, by calculated choice, become risk-taking entrepreneurs because they are impelled by what they see as business opportunities that other people cannot discern. The vast majority of our entrepreneurs are in business out of the sheer necessity to survive under today's harsh conditions like the poor housewife who opens a small store because she knows no other way of helping her family.

Entrepreneurship as a team sport

Filipinos harbor many cultural misconceptions about entrepreneurs and entrepreneurship. First, there is the view that entrepreneurs are people who are somehow "lucky" in business - who hit on the right idea at the right time, and in the right location. Then everything else falls into place. But, of course, entrepreneurship is not like that at all. Entrepreneurship starts with a VISION. Always there is HARD WORK. And a lot of PATIENCE. Then there is the probability of failure. But the entrepreneur-leader combines certain qualities to make things work: determination, passion, faith, intelligence - and the ability to get up one more time after being knocked down.

A second misconception is the view that entrepreneurs routinely and recklessly take risks that sensible business people would not take. But, after making the plunge, good entrepreneurs meticulously monitor and evaluate the results. And, if they had made a mistake, they do not hesitate to go back to the drawing boards to come out with a better solution. They make a second decision to change course with a new roadmap, and move on.

Third is the myth that entrepreneurial organizations are dependent for their success on just one person - the fearless visionary who leads the corporation from up front. …