They are some of the biggest success stories today: Tony Tan Caktiong, the poor boy from China whose small ice cream franchise turned into Jollibee, the world’s fast-rising fastfood superstar; Injap Sia II, self-made billionaire before he turned 40, courtesy of a fastfood chicken barbecue chain called Mang Inasal; and Dennis Uy, another young tycoon from Davao City who is building a vast empire out of Phoenix Petroleum and a diverse range of shipping, logistics, and real estate ventures.
They are not just your typical Cinderella stories — they are successful entrepreneurs who are hailed as agents of change, drivers of innovation, and nation builders. And for a good reason. Here are some of the reasons entrepreneurs are important in transforming developing economies:
1. They spawn a winning cycle of job and income creation. An entrepreneur is one less job seeker in an economy, and he provides employment for multiple other job seekers. When led by the right kind of people, these businesses grow and create more jobs, more products and services, and more income. The pooled capital and resources mobilize wealth creation, which is among the basic imperatives of economic development.
2. They uplift standards of living by delivering innovation — from providing customers the same goods at lower prices to adopting digital automation to reduce operational cost and rev up productivity.
3. They set off a tidal wave of social change. Businesses ease poverty and struggle at the grassroots level, not just by extending access to products and services to them, but by getting the poor and marginalized involved. Reese Fernandez-Ruiz is a perfect example. In 2007, she co-founded Rags2Riches to offer opportunities for women living in the Payatas dump site in Quezon City to craft scrap fabric into marketable fashion items such as handbags, wine bottles, and eyeglass cases. Rags2Riches has managed a 100% annual growth rate in its first five years while training and empowering more than 900 community artisans.
4. Entrepreneurs advance the fight against climate change through providing clean water, harnessing affordable off-grid power, and adopting smart, energy-efficient agricultural and manufacturing methods. For the Philippines, which ranks high among countries most vulnerable to extreme weather conditions, entrepreneurship has massive impact. Take the case of 44-year-old Illac Diaz. From the Philippines to Peru, his Liter of Light has already lit up more than a million homes in impoverished areas all over the world just by converting recycled plastic bottles into a clever lighting concept.
5. Entrepreneurs transform communities. Businesses become true game changers by helping members of the communities acquire skills and education via academic institutions, technical training, and internship opportunities.
Entrepreneurship is driven by passion. To nurture this passion, the government has a crucial role to play — from giving micro, small and medium enterprises access to credit, supporting startups and early-stage business development, to ensuring an enabling environment, and prohibiting unfair market practices, corruption, and even criminal activity, among others.
There are many examples around the world where government has played a catalytic role in creating a spark for entrepreneurs to thrive, such as Tel Aviv and Singapore. Such stories often get lost in the common perception that government just bungles things when it interferes with the private sector. More importantly, the government must have a good understanding of what entrepreneurial ecosystems are, how they are formed, and when the right comes for it to step back and just let entrepreneurs do their magic.
The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at marivic.espano@ph.gt.com.
Marivic Españo is the President of the Financial Executives’ Institute of the Philippines (FINEX) and the Chairperson and CEO of Punongbayan & Araullo Grant Thornton, one of the leading Audit, Tax Advisory and Outsourcing firms in the Philippines.
