Fireside vs fire within: Entrepreneurs at centerstage

It was amazing to see the overwhelmingly enthusiastic response to the much acclaimed “Fireside Chat” held recently. It not only showcased seven fiery entrepreneurs, but paved way for their frank expressions without fear or favour. They enjoyed the freedom of expression in being critical of state support, and collectively demonstrated the adventurous voyage of the “precious ship of entrepreneurship”. There is a growing relevance of entrepreneurs to the economic growth of Sri Lanka. Today’s column is an attempt to explore entrepreneurship in the Sri Lankan economic context.  

Overview

Raigam Group Chairman Dr. Ravi Liyanage was telling me yesterday of his entrepreneurship journey. When he tendered his resignation from being a senior Customs Officer, his boss has seriously asked him, “Have you gone mad?” Leaving a secure Government job to take up and expand a risky business was in line with his purpose. This highlights a typical mind of an entrepreneur, taking risks and moving ahead in confidence. 

“If you just work on stuff that you like and you’re passionate about, you don’t have to have a master plan with how things will play out.” So said Mark Zuckerberg, the founder of Facebook. It highlights the mind of an entrepreneur. From Gutenberg the book printer to Zuckerberg the Facebook creator, we have come a long way. The journey is full of success stories of enthusiastic entrepreneurs. 

It is interesting to investigate what entrepreneurship is all about. The textbook description tells us that it is the capacity and willingness to develop, organise and manage a business venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new businesses. 

As we know, in economics, entrepreneurship, combined with land, labor, natural resources and capital can produce profit. 

Entrepreneurial spirit is characterised by innovation and risk-taking, and is an essential part of a nation’s ability to succeed in an ever changing and increasingly competitive global marketplace. 

I still remember learning entrepreneurship in my MBA program at the Postgraduate Institute of Management (PIM). In fact, one out of five graduates of PIM end up in becoming an entrepreneur. With the aid of “PIM Genesis”, our business incubator, we want to double that during next three years. 

The term “gale of creative destruction” still echoes in my mind. It is the term used by Joseph Schumpeter, a veteran on entrepreneurship, about replacing whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models. 

Entrepreneurs and uncertainty 

Entrepreneurship is often associated with true uncertainty, particularly when it involves something really novel, whose market did not already exist. However, even if a related market already exists, nothing guarantees that room exists for a particular new entry. Risk taking is part and parcel of it. “When everything seems to be going against you, remember that the airplane takes off against the wind, not with it,” said Ford Motor Company founder Henry Ford.

Among the pioneering entrepreneurs of the world, one name comes to my mind is Thomas Edison. What do you say about the man who gave the world the electric light, the phonograph, talking motion pictures and more than 1,300 other patented inventions? Moving beyond innovation, he was also able to exploit the profit potential in his creations, an entrepreneurial bent that asserted itself when Edison was a teenager, printing a newspaper in the baggage car of a rolling trai,and then selling copies to passengers. His impact on the way people live was and is pervasive. As a combination of inventive genius and entrepreneurial flair, he stands special. 

Henry Ford was another icon of the same breed. He earned the seed capital for his enterprise by working as an engineer at the Edison Illuminating Company in Detroit, USA. Ford also fundamentally changed lifestyles by making available a vehicle, the Model T, that vastly extended people’s range of movement. He had a profound  impact on manufacturing industry. The moving assembly line he designed to build his cars was the signal breakthrough of the Industrial Age. 

Entrepreneurs at the pinnacle

A recent issue of Forbes magazine highlighted a record 2,208 billionaires from 72 countries and territories, including the first ever from Hungary and Zimbabwe. This elite group is worth $9.1 trillion, up 18% since last year. Interestingly, their average net worth is a record $4.1 billion. As in the case of last year, Americans lead the way with a record 585 billionaires, followed by mainland China with 373. Jeff Bezos of Amazon fame occupies the list’s top spot for the first time, becoming the only person to appear in the Forbes ranks with a 12-figure fortune.

Though not in the top ten list, one I prefer to talk on is Richard Branson. He is the founder of Virgin Group, which consists of more than 400 companies around the world, including Virgin Atlantic, Virgin America, and Virgin Mobile. He is the author of six books, including his latest, Like a Virgin: Secrets They Won’t Teach You at Business School.

One of Britain’s highest profile billionaires, Richard Branson owes his fortune to a conglomerate of businesses bearing the Virgin brand, many of which he no longer controls. In 2014, budget airline Virgin America went public, as did Virgin Money, of which he owns 35%. Among his more famous exits: the sale of Virgin Records for $1 billion in 1992, which reportedly made Branson run down London’s Ladbroke Grove crying. Branson’s stakes in terrestrial aviation (Virgin Atlantic and Virgin America) have increased, while his space flight endeavor (Virgin Galactic) is having trouble achieving lift-off. One of its spaceships exploded in mid-air in 2014, killing a test pilot and injuring another. Branson continues to expand his travel business, recently announcing Virgin Cruises. He lives on Necker Island, the British Virgin Islands retreat he bought in 1978 for $180,000.

Entrepreneurial spirit is characterised by innovation and risk-taking, and is an essential part of a nation’s ability to succeed in an ever changing and increasingly competitive global marketplace.

Entrepreneurship is often associated with true uncertainty, particularly when it involves something really novel, whose market did not already exist. However, even if a related market already exists, nothing guarantees that room exists for a particular new entry. Risk taking is part and parcel of it.

The spirit of Sri Lankan entrepreneurship has been a beacon of hope for the nation. Sri Lankan entrepreneurship have taken the lead in fostering growth and economic development, creating and sustaining businesses in challenging environments and have gone to yield outstanding results for the country.

The key challenge is to move beyond petty political agendas and to ensure the engagement of rural and urban youth towards excellence. The usual Sri Lankan practice of impressive concepts getting ignored without concrete actions should not be the case here. The actual results will speak volumes of the scheme in time to come. 

Sri Lankan entrepreneurs

Small and Medium-Scale Enterprises (SMEs) in Sri Lanka account for 80% - 90% of the total number of enterprises, and the development of the sector is the key for resilient national economies, according to  the Asian Development Bank. The Asia SME Finance Monitor notes that the SMEs contributed to 30% of GDP, 20% of exports, 30% of the production value added in the manufacturing sector, and employed 35% of the total workforce. The backbone of this is entrepreneurship.

The spirit of Sri Lankan entrepreneurship has been a beacon of hope for the nation. Sri Lankan entrepreneurship have taken the lead in fostering growth and economic development, creating and sustaining businesses in challenging environments and have gone to yield outstanding results for the country.

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) salutes these outstanding and enterprising people by recognising and rewarding them through a prestigious awards program running for almost two decades. Sri Lankan Entrepreneur of the Year is recognised as Sri Lanka’s Premier Entrepreneurship Awards and has been recognising business success in Sri Lanka for last two decades. This gives an opportunity for a broad range of businesses from across the country to celebrate and showcase their excellence.

Enterprise Sri Lanka 

According to the concept paper published by the Department of Development Finance, under the theme of “Enterprise Sri Lanka”, the Government aims to foster entrepreneurship  to achieve the Government’s medium-term targets, such as per capita income of $5,000, one million new jobs, doubling exports, more than 5% continuous GDP growth etc. There are 15 tailor-made, local-funded and donor-funded financial and non-financial schemes under the umbrella of “Enterprise Sri Lanka Credit Program” with an aim to support the Small and Medium Enterprise (SME) sector. 

According to the above concept paper, “Enterprise Sri Lanka” will facilitate not only the established private sector enterprises, but also micro enterprises, self-employees, and young entrepreneurs to be the engine of the economic model. It is also facilitated the selected vital groups of the society such as school service van owners to move to 32-seater buses from old van models in order to establish more secure school services; low income groups to upgrade and complete their houses; and media personal correspondents who work under difficult circumstances to purchase necessary equipment. 

The key challenge is to move beyond petty political agendas and to ensure the engagement of rural and urban youth towards excellence. The usual Sri Lankan practice of impressive concepts getting ignored without concrete actions should not be the case here. The actual results will speak volumes of the scheme in time to come. 

Way forward 

We need to promote more entrepreneurs in the local soil. They need to have global reach with local roots. It is very encouraging to see the award and reward schemes such as Entrepreneur of the Year, felicitating the deserving candidates. Instead of finding comfort of the seashore of a stable organisation, some may enjoy launching a ship into a rough sea. That journey is entrepreneurship. With the required mindset of creativity and confidence, one can clearly see a dream and cleverly pursue the dream. That’s how entrepreneurs succeed.

(Prof. Ajantha S. Dharmasiri can be reached through [email protected] , [email protected]  or www.ajanthadharmasiri.info)