How to strengthen Central America's Entrepreneurial Ecosystems?

In today's world, promoting innovation and economic development is crucial for the prosperity of our regions. Achieving this objective requires the strengthening of Entrepreneurial Ecosystems.?

In this article, we summarize a dialogue on the topic between Dr. Allan Villegas, Ph.D. , professor at HEC Paris Business School in Qatar -with research on the ecosystems of Mexico, Chile, and more recently, Qatar- and Dr. Octavio Martinez , professor of business strategy at INCAE, consultant and researcher on issues of strategy formulation and implementation in the region. The dialogue was part of our EmpreSomos series, Entrepreneurial Connectivity Central America

What are entrepreneurial ecosystems?

Entrepreneurial ecosystems are the social and institutional environment facilitating the initiation and sustainability of entrepreneurial, conventional, or social initiatives. In Central America, where economies are highly dependent on small and medium-sized enterprises, it is essential to have adequate conditions that allow them to prosper and develop.

For these ecosystems to be robust and generate positive dynamics, Villegas agreed to highlight these five key players and processes:

1. Support organizations: Incubators, accelerators, applied research, mentoring, or networking entities that stimulate knowledge transfer for entrepreneurship and innovation.
2. Education: The training of talent, access to highly skilled human capital, and, more generally, an education system that promotes entrepreneurship and a culture of innovation.?
3. Financing: It is essential to attract risk investors, as traditional banks tend to be conservative concerning financing new business ideas.
4. Government: The role of government as a facilitator of entrepreneurial activity is critical, particularly in legal provisions for setting up businesses, taxes, licenses, and tax incentives.
5. Entrepreneurship skills: Events such as demo days or hackathons pave the way to interactions between different ecosystem actors and facilitate the creation of networks, synergies, and connections that enhance joint learning.

In the case of Central America, Villegas, and Martinez's discussion focused on the importance of improving the following processes.?

• One is the appropriate involvement of what he calls the triple helix of government, academia, and industry. These three agents must collaborate and contribute in their respective areas to co-create the ecosystem. Entrepreneurs bring new ideas, and academic institutions moderate, propose and generate ideas that can be converted into future ventures. At the same time, the government, among other things, must be a facilitator by enforcing the rule of law, investing in infrastructure, and providing institutional support for business development.
• The second is to recognize each ecosystem component's strengths and how best to leverage available resources and capabilities.
• Another is to position the ecosystem internationally, that is, to foster competitive advantages and create new ones to attract international investment, ideas, and talent.?
• Adopting a global vision is essential because accessing specialized resources from other places is always beneficial.?

One of Dr. Martínez's questions as moderator of the dialogue was: how to support young export-oriented companies seeking to internationalize and overcome challenges in their initial stage?

Dr. Villegas suggested using Central American countries as spaces for pilot testing, prototyping, and validation of business models to lay the groundwork for scaling. Once the company's capacity has been strengthened, the next step is to build bridges to larger markets (such as Mexico or Brazil) with the help of support organizations such as accelerators.

These collaborations can be facilitated by understanding each party's objectives, creating a win-win approach, and considering that entrepreneurial ecosystems must always consider the challenges entrepreneurs must overcome to start and grow.

These are some of the highlights of the dialogue between Allan Villegas and Octavio Martinez in the context of our program EmpreSomos, Entrepreneurial Connectivity Central America.

If this topic interests you, you will find it helpful to watch the full video on our YouTube channel by clicking here.?