A growing number of people are seeing entrepreneurship as the way out of the economic downturn: in the United States, business creation is enjoying its biggest renaissance since the late 1990s.
Many household names were created during a recession: General Motors, Microsoft, HP, AT&T, Disney and MTV to name a few. A 2009 study by the Kauffman Foundation entitled "The Economic Future Just Happened", found that more than half of the companies on the 2009 Fortune 500 list were actually launched during a recession or bear market.
The latest release of the "Kauffman Index of Entrepreneurial Activity," a leading annual indicator of new business creation in the United States, showed that 0.32 per cent of American adults created a business per month in 2011 – a 5.9 percent drop from 2010, but still among the highest levels of entrepreneurship over the past 16 years.
So why in the midst of the most severe global downturn since the Great Depression do individuals experiment with entrepreneurship? "The Great Recession has pushed many individuals into business ownership due to high unemployment rates," says Robert Litan, vice president of research and policy at the Kauffman Foundation. Being jobless represents a unique opportunity for people with a great business idea to act upon it. When there is “nothing left to lose,” why not take the plunge?
"However, economic uncertainty has likely made people more cautious, with many opting to start sole proprietorships rather than more costly employer firms,” Litan adds. In other words, start-up founders are more likely to fly solo than employ others. This is mixed news for the economy, as it needs the kind of entrepreneurship that will lead to job creation.
America continues to produce the largest contingent of entrepreneurs. But the rest of the world is not immune to the phenomenon. In the Middle East, as pro-business reforms take effect across the wider region, Vangelis Souitaris, Professor of Entrepreneurship at the Cass Business School, part of City University London, "foresees a sharp rise in start-ups. This, in turn, will lead to increasing demand for entrepreneur-focused business programmes at a level and scale never seen before in the Middle East".
As a result, the Cass Business School’s Dubai Centre announced in mid-April that an Entrepreneurship stream will be introduced to its Executive MBA programme.
“Here in the region, almost nine out of 10 businesses are small and medium size enterprises, yet many often reach a plateau. Our new entrepreneurship stream has been designed specifically to overcome this and to help the next generation of the region’s business leaders turn their ideas into successful ventures,” said Ehsan Razavizadeh, MENA Regional Director of Cass Business School, and Head of Cass Dubai Centre.
Dubai's Ruler, recognising the value in having a strong SME sector, launched the Mohammed bin Rashid Establishment for Small and Medium Enterprises Development (Dubai SME) in 2002 to help new businesses. It's website, SMEconnect, is designed to provide a strategic link between SMEs and relevant service providers. Elsewhere in the Emirate, ‘innovation campus’ The Shelter was established with the support of the Dubai Culture and Art Authority to help small start-ups. The facility aims to help small businesses in the creative industries by providing space for new ideas and dialogue between creative people.
To surf on the entrepreneurship wave sweeping the region, du, the Dubai-based telecoms company, will soon launch The Entrepreneur, a reality TV programme aimed at boosting local small and medium enterprises (SMEs). The show will pit budding businessmen against each other in a bid to win a cash award of Dh1m (US$272,000) for investment and professional services to support the growth of their enterprises. The format will follow a similar vein to hit US and UK television programme The Apprentice.
"We are convinced there are many good ideas out there which need to be heard and need to be promoted," said Hala Badri, executive vice president for Brand and Communications, at du. "The UAE is brimming with entrepreneurial talent which just needs a platform to take it to the next level. The Entrepreneur aims to empower and support those who build new businesses that are innovative, sustainable and, most importantly, contribute meaningfully towards the social development of communities."
"The Entrepreneur" is expected to air on the Dubai One channel later this year.