ENTREPRENEURSHIP : An emerging career path for Filipinos

in #business8 years ago

In the Philippines, 6.2% of the adult population are established  business owners and 18.4% are engaged in early-stage entrepreneurship  (TEA). The country’s TEA rate is far higher than the average for Asia  and Oceania (13%) .

On the other hand, the country's business  discontinuance rate (12.6%) far exceeds the ASEAN average (4.8%). Poor  profitability and a lack of access to capital are the major reasons for  business closure. 70.5% of Filipinos engaged in early-stage  entrepreneurship are driven by the opportunity to improve their  financial standing while only 29.4% are necessity-driven. 

Nearly  half (46%) of all Filipinos have a very positive view of the  entrepreneurial opportunities in their country; furthermore, 66% believe  they have the entrepreneurial capabilities needed to start a business.  Although perceived entrepreneurial capabilities of Filipinos are high,  89.5% did not receive formal training at school. Filipino entrepreneurs  see owning a business as a path to being independent as well as the  opportunity to earn a living and improve one’s economic lot. 

 More than half (52%) of Filipino entrepreneurs are in the age group  18-44 years. Eighty –three percent of entrepreneurs are involved in  retail trade, hotels, and restaurants while only 3% are involved in the  transformative sector – manufacturing, construction, and transportation.  Four percent (4%) are in agriculture, forestry, and fishing. Notably,  there are more women (58%) involved in entrepreneurship at the early  stage as well as in established business (55%). 

 

Enablers and Constraints

Entrepreneurship  is seen by Philippine society as a very good means to improve one’s  economic and social standing. This social and cultural orientation  serves as one of the major drivers promoting entrepreneurship. The large  domestic market with high consumer spending as well as good education  and training also drives the population to try entrepreneurial  activities. There are also several government programs that support  entrepreneurship.

On the other hand, there are several constraints to the development of entrepreneurship in the country:

  • A lack of financial support and working capital, hindering business expansion;
  • Poor  information dissemination – the inconsistent implementation of  government policies and programs that support entrepreneurship;
  • Poor provision of training aimed at expanding and sustaining businesses.

 

Initiatives Supporting Entrepreneurship

Entrepreneurship  is encouraged in the Philippines through the activities of the  different government departments, such as the Department of Trade and  Industry, the Department of Science and Technology, Bangko Sentral ng  Pilipinas and the Commission on Higher Education.

Entrepreneurship  is offered as a formal degree program at both bachelor and graduate  levels (BS, MS, and PhD) aiming to provide formal training to aspiring  entrepreneurs. Financial institutions like banks are required to set  aside a certain percentage of their loan portfolio to the capital  requirements of small and medium sized businesses.

The Department  of Trade and Industry, through the Bureau of Small and Medium Enterprise  Development, have programs that assist SMEs in developing their  entrepreneurial capabilities.

The technological needs of SMEs are  also being addressed by the Department of Science and Technology thanks  to a program known as the Small Enterprise Technology Upgrading Program  (SETUP). Partnerships between government, academia and industry are  implemented in developing technology-based entrepreneurship through the  business incubator and technology parks programs. 

 

Trends Over Time

Among Filipino  youth, a new attitude is forming; they are progressively viewing  entrepreneurship as a viable alternative to employment. The supporting  framework for this is slowly improving, with the offering of formal  academic degrees on entrepreneurship, the encouragement of industry, new  graduate partnerships on start-ups, and enhanced interest from civil  societies/ NGOs in supporting entrepreneurial development and  activities. 

 

Challenges for the Future

The  biggest challenge the country faces in promoting entrepreneurship is to  develop the capability and skills of Filipinos in starting and growing  businesses; furthermore, it needs to promote innovation to increase  penetration in both domestic and global markets. All this has to be well  supported by the inclusion of entrepreneurship and management courses  in the formal education system as well as the teaching of creativity and  innovation among the youth. Capability building of entrepreneurs  through formal and informal training has to be more actively pursued.  The country must take advantage of new developments in the basic  education sector, and make entrepreneurship a formal part of the  curriculum; it should also redesign tertiary education programs to  promote entrepreneurship as an alternative to employment. 

For more information, visit:  http://www.gemconsortium.org/country-profile/98

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