7232019 Unleashing Entrepreneurships Potential in Myanmar

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THE economy requires structural

change and technological catch-up for

growth to be inclusive in MyanmarEconomic policy and development part-

ners need to promote entrepreneurship

in order to unleash the potential of a

growing private sector Whatrsquos morethe stranglehold of the current politi-

cal elites must be eased and economic

policy must benefit all

In the past economic policy has

been used to reinforce the dominanceof the predatory elite and weaken the

entrepreneurial groups that could

threaten the status quo if they became

too affluent While some people argue

that working with the crony companiesis the only way to quickly develop the

economy others insist that it does the

opposite But another option is often

overlooked ndash unleashing the potentialof entrepreneurship to build up a new

class of businesspeople which can have

a multiplier effect on the economy

There is substantial unrealised po-tential within Myanmarrsquos private sec-tor that just needs a more favourable

environment and targeted support to

flourish Decades of restrained energy

talent and aspirations are just now be-ing released People around the country

are eager to seize the moment to create

a future for themselves and their fami-

lies by starting a new business

Current activities encouraging en-trepreneurship and start-up activities

are successfully focusing on organising

events doing trainings and basically in-

vesting in catalytic individuals One of

the most compelling ways to help firms

succeed is by increasing the power of

the linkages and networks they are

part of Networks support indigenousand private systems of learning so that

entrepreneurs can be encouraged to

learn from their peers Many business

ecosystems bypass weak regulatory en-

vironments by creating private capacityfor regulation and enforcement within

the network

But there is a need to think system-

atically about what it takes to supporta start-up ecosystem To flourish entre-

preneurial activity requires a concen-

tration of talent infrastructure capital

and networks ndash key success factors of

a start-up ecosystem as epitomised bySilicon Valley Additional research on

entrepreneurship is needed to better

understand the interplay of entrepre-

neurial characteristicsand the businessenvironment in Myanmar

A great opportunity for levelling the

playing field is the fast rising usage of

ICT in Myanmar Mobile technology es-

pecially is generating new possibilities

for entrepreneurs to change the local business landscape by opening up new

markets and finding new innovative

ways to compete within the established

power structuresThe disruptive force of ICT entre-

preneurship may be a chance to bring

innovation to sectors that otherwise

will be dominated by connected com-panies for years to come But the gov-

ernment holds the key to ICT infra-

structure development and will play a

decisive role in shaping the direction

of the industry and its potential for in-novative disruption

ICT is also holding great promise for

deepening financial access in the coun-

try ICT offers new ways to finance forlocal people and enterprises that previ-

ously had no access to flexible financing

due to rigid banking regulations and

the information monopolies of govern-ment and connected businesses ICT

offers innovative ways to open up the

financial sector and put private capital

to work where it is needed most

Putting aside the regulatory is-

sues new financial arrangements

like business angels crowd financing

start-up equity funds and venturecapital can be mobilised to provideentrepreneurs with targeted financial

solutions outside the banking sector

Waiting for the current banking sys-

tem to provide effective services toSMEs will take years to come Only a

substantial shift in government pol-

icy can address the systemic failure

affecting access to finance for SMEs

An interesting phenomenon ofMyanmarrsquos entrepreneurship scene is

the unusual strong presence of social

enterprises This is driven by a large

number of young people with a busi-

ness education a plethora of social is-

sues and the governmentrsquos increasing

acceptance and support of independ-

ent social businesses In an environ-

ment like Myanmar social enterpris-es can achieve social impact more

efficiently than the government more

sustainably and creatively than not-

for-profits and more generously than business Its potential to contribute to

inclusive growth is huge

But for current social enterprises to

grow into a sustainable economic force

substantial challenges have to be over-come Most of the social enterprises

are owner-driven focusing on small

niche or regional markets with limited

growth potential While they can makea big impact in a short amount of time

by focusing on niche markets in the

long-term they will need to transform

from niche to mass markets develop

repeatable business models improvefunding and develop into professional

run businesses

To support the rise of the social en-

terprise sector beyond its nascent stage

more systematic and long-term support with increased cooperation between

government development partners

and enterprises will be necessary

Development partners in Myanmarhave a responsibility to ensure that a

favourable business environment exist

for all private sector actors A ldquobusiness-

as-usualrdquo approach will not be enoughto generate the higher and more inclu-

sive growth patterns needed to make

substantial and sustainable inroads

into reducing poverty They therefore

need to be aware of the key constraintsfor different private sector entities to

contribute to broader growth

The momentum created by currentreforms is unlikely to be sustained un-

less non-connected enterprises find

the space to innovate and operate on a

level playing field While there are well-documented examples of crony com-

panies there are also companies who

succeeded by identifying and exploiting

legitimate opportunities albeit within

a climate of corruption They are veryeffective at recognising opportunities

mobilising resources managing risks

crafting compelling strategies and

building strong business modelsThese companies show innovative

ways of working in this country that are

well worth being replicated and scaled

up as best practices They may well

define a new age for entrepreneurshipand innovation in Myanmar that could

redefine the paradigm of the economy

Entrepreneurship can help to un-

leash some of the countryrsquos great poten-tial but whether the economic devel-

opment will be more broad-based will

ultimately depend on the role SMEs will

play in futureSubstantial work is needed to de- velop targeted support regulations in-

vestment and policy initiatives that are

actively designed to level the playing

field and help all businesses to equallygrow and prosper

Henrich Dahm is an independent private

sector development expert based in Yangon

who specialises in SME development

entrepreneurship development incubators

and business development services He

has 25 years of experience in Southeast

Asia especially in Vietnam

Unleashing entrepreneurshiprsquos potentialHENRICH DAHM

henrichdahmgmailcom

There is a need to

think systematically

about what it takes

to support a start-up

ecosystem

OPINION

32BusinessViews THE MYANMAR TIMES OCTOBER 27 983085 NOVEMBER 2 2014