Make it your homepage |   E-mail: Subscribe Unsubscribe

IBM Watson Group Invests in Fluid to Transform the Consumer Shopping Experience


Friday, April 25, 2014
News Making Money

How can Georgia stimulate innovative entrepreneurship?

Written by Daan Harmsen, FINANCIAL MANAGER, GEOCAPITAL MICROFINANCE ORGANIZATION

17/02/2013 20:46 (431 Day 09:23 minutes ago)

The FINANCIAL -- Entrepreneurs: everyone loves them.

ADVERTISEMENT

 

They are full of energy, and always have new ideas that excite people. I see two different types of entrepreneurs: those that run the small business that form the lifeblood of the economy, and those that create new products and ideas that stand at the basis of revolutionary new enterprises. Your small neighborhood supermarket falls in the first category, while Facebook falls in the second category.

The developing world, Georgia included, has no lack of the first category of entrepreneurs: small business entrepreneurship is very common indeed. Often these small businesses are an alternative form of employment: with no intention to expand, they often only employ the owner and a few others. Instead of finding a job somewhere, the owner simply creates one for herself.

The second category of entrepreneurs is harder to find: this form of entrepreneurship is strongly intertwined with innovation and technology. However, if entrepreneurs in the second category succeed, they create big businesses that often employ thousands of people. In this article, I’ll discuss with Georgia can do to support entrepreneurs that will eventually create innovative new companies. We’ll see that for entrepreneurs, it is crucial to have simple rules and regulations, fast bankruptcy procedures, and knowledge hubs.

First, barriers to starting a business and running it should be low. Someone who starts a new business doesn’t necessarily know much about the administrative and legal sides of things, and we don’t want potential entrepreneurs to waste too much on this. Georgia has already done much in this respect by simplifying business registration procedures. Tax procedures are also relatively simple, and done online, although this is can be complicated for a foreign entrepreneur, since online tax filing is only possible in Georgian.

Second, make it easy to go bankrupt. Entrepreneurs most often fail, and that is part of the process. Entrepreneurship is about taking risk, and sometimes a business doesn’t work out the way the owner had expected it to. This often involves substantial financial risk. Many entrepreneurs go through personal bankruptcy with another venture before starting the company that actually leads to their success. The ability to go through personal bankruptcy quickly is essential: if it takes many years to get out of personal bankruptcy, entrepreneurs will be hesitant to put too much on the line financially.

Third: knowledge hubs are essential for entrepreneurs to start high-value added businesses. An prime example of this is Silicon Valley: thousands of technology entrepreneurs work in a relatively small area there, not only because they can find other entrepreneurs there, but also because there is a university nearby (Stanford) that consistently delivers high-quality graduates who can work with these start-up businesses. Another example of this Boston, where many science-related startups are born, because of the presence of a large biotech industry and two world-class universities (Harvard and the Massachusetts of Technology). In these knowledge hubs, entrepreneurs get to interact with each, find new partners, benefit from existing knowledge, and “ideas have sex”. In Georgia, some proto-knowledge hubs are starting to emerge around some of the universities in Tbilisi , but there is still a lot of work to be done. The government can stimulate this process by focusing on technical education, with skills that allow graduates to become twenty-first century entrepreneurs: if a university is very good in technical fields, a knowledge hub will often naturally come into existence around it.

Georgians have learnt how to run small businesses: now it is time to think about how we can create new big ideas. Simple rules and regulations, and quick bankruptcy procedures are prerequisites, and knowledge hubs can be the birthplaces of these new ideas and businesses.

 

 

Make Your Comment

Add NewSearchRSS
Only registered users and facebook social network members can write comments!

This text is replaced by the Flash movie.
This text is replaced by the Flash movie.
Politics
“The former Yugoslav Republic of Macedonia”: presidential election and early parliamentary elections

23/04/2014 16:38 (1 Day 13:31 minutes ago)

The FINANCIAL -- A 14-member delegation of the Parliamentary Assembly of the Council of Europe (PACE), led by Stefan Schennach (Austria, SOC), will travel to “the former Yugoslav Republic of Macedonia” from 25 to 28 April to observe the conduct of the presidential election (2nd round) and the early parliamentary elections, alongside observers from the OSCE’s Parliamentary Assembly and Office for Democratic Institutions and Human Rights (ODIHR), according to PACE.

Read more...
TRAVEL BIZ
American Express Reports First Quarter EPS of $1.33, Up 16 Percent from a Year Ago

19/04/2014 14:24 (5 Day 15:45 minutes ago)

The FINANCIAL -- American Express Company reported first-quarter net income of $1.4 billion, up from $1.3 billion a year ago. Diluted earnings per share rose 16 percent to $1.33, from $1.15 a year ago, according to the American Express Company.

Read more...



World News
Helping Bulgarian farmers to become landowners

19/04/2014 11:39 (5 Day 18:30 minutes ago)

The FINANCIAL -- The EBRD is providing a €5 million to loan to Elana Agrocredit AD to co-finance the development of Bulgaria’s agricultural land market.

The World Bank Supports Small and Medium-sized Businesses in Tunisia

19/04/2014 10:29 (5 Day 19:40 minutes ago)

The FINANCIAL -- The World Bank approved an additional loan for US$100 million for Micro, Small and Medium Enterprises (MSMEs) in Tunisia.

EBRD loans to boost energy efficiency and support competitiveness of Macedonian companies

16/04/2014 16:42 (8 Day 13:27 minutes ago)

The FINANCIAL -- The EBRD has teamed up with Macedonian bank, NLB Tutunska banka, to increase the competitiveness of the Macedonian private sector and to promote energy efficiency in the country with a €6 million financing package, according to EBRD.      

EBRD helps modernise Baltic freight handling

16/04/2014 16:29 (8 Day 13:40 minutes ago)

The FINANCIAL -- A €32.5 million loan from the EBRD to Klaipedos Smelte, the company operating the container terminal at Klaipeda port in Lithuania, helped modernise its freight handling capacities and upgrade the whole Baltics region as a transit hub, according to EBRD.

CityLife
Africans among the most morally opposed to contraception

19/04/2014 08:33 (5 Day 21:36 minutes ago)

csi_2.jpg

The FINANCIAL -- Speaking to bishops from Tanzania last week, Pope Francis praised church workers in Africa “who strive diligently to educate people in the area of sexual responsibility and chastity” with the aim of preventing HIV and AIDS.

TRAVEL BIZ »
PRESS RELEASES »
FINANCIAL »
UKRAINE »
GEORGIA »
WORLD »
BANKS »
BUSINESS »
TECH »
MARKETS »
B SCHOOLS »
SPECIAL REPORTS »

Markets
Major Cloud Service Providers Slash Prices; Threaten Smaller Players’ Existence: IDC Warns

19/04/2014 13:40 (5 Day 16:29 minutes ago)

The FINANCIAL -- In the last week of March, major Cloud Service Providers (CSPs) in Asia dropped their prices for core services dramatically and IDC believes that this will make it very difficult for smaller CSPs to remain in business if they continue to rely on provision of basic, undifferentiated services, according to International Data Corporation (IDC).

Jobs
Philippines: Further reforms to strengthen growth, create more and better jobs

11/04/2014 12:00 (13 Day 18:09 minutes ago)

The FINANCIAL -- The Philippines is likely to remain as one of the fastest growing economies in the East Asia and Pacific region in the next two years.

Oil&Auto
Gazprom and Turkey to look into possible increase in Blue Stream capacity

24/04/2014 08:03 (22:06 minutes ago)

The FINANCIAL -- Ankara hosted a working meeting between Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee and Taner Yildiz, Minister of Energy and Natural Resources of the Republic of Turkey, according to Gazprom.

Read more...
INSURANCE
Zurich identifies seven cyber risks that threaten systemic shock

23/04/2014 17:00 (1 Day 13:09 minutes ago)

The FINANCIAL -- The recently published Zurich Cyber Risk Report, created in collaboration with the international think tank Atlantic Council, argues that cyber-risk management professionals need to look beyond their internal information technology safeguards to interconnected risks which can build up relating to counterparties, outsourced suppliers, supply chains, disruptive technologies, upstream infrastructure and external shocks, according to Zurich Insurance Company.

Read more...






Developed by Aleksandre Chiabrishvili

Design built by Creo Group