Yet there seems to be a rejection in academic and policy circles of this truth. Entrepreneurship too often is talked about as a rare trait and that people who run small businesses are doing nothing different to set them apart.
I disagree again. I recently viewed a short documentary on women in India running vending businesses on the Indian railway network. They hawk their small range of wares up and down the carriages of overcrowded Indian trains.
These are slum-dwelling women trading illegally. They are regularly arrested and fined. Yet they immediately return to the trains. Then their motivation is revealed.
The documentary shows the viewer the (basic) two-room apartments these women are buying. Their business activity is taking them and their families out of the slums. This is entrepreneurship!
To run their businesses, these women must be highly attuned to the needs of their customers (the market). They must shift and change what they do constantly to meet the demands of their market.
If they don’t, they don’t have sales or profit. This is the mark of entrepreneurship. It’s mostly small things involving fine-tuning to market demands that make up entrepreneurial activity. And it needs to be recognised as such.
If the activity of small business people is not recognised as entrepreneurial at its essence, government policy and economic regulation will misfire.
It will focus on the glamour, glitz and excitement of big economic numbers produced by big business.
This is so much of the history of economic policy in the ‘developed’ world since the Second World War. In the developed economies, small business activity mostly happens in spite of government policy rather than because of it.
If there’s one thing that developing economies should consider, it is to learn from the successes and, more importantly, the errors of the developed economies.
Economic policy should work against concentrations of wealth. Policy should frustrate wealth concentration.
Many of the economic problems currently on view in Europe and the USA relate to wealth concentration – the banks, Wall Street and the likes.
Policies should encourage, allow and rejoice in wealth creation. But it must be wealth creation that occurs through the greatest spread of the population possible.
It’s in the small business, with the individual, self-employed entrepreneur, that wealth creation and its widest distribution is most likely to occur.
If there’s a message I took from the Laos small business conference last week, it was that this message still has a long development path before it’s fully understood and implemented.
