Why startups in developing countries need more support

Editor,Refer to Sunny Ntayombya’s article, “Entrepreneurship in Rwanda: We are our own worst enemies” (The New Times, December 4).I thank The New Times for encouraging Rwandan youth to seriously consider entrepreneurship in lieu of a salaried career. It is right to underline the attitudinal impediments to self-employment and enterprise that our youth face from an early age, both at home and at school.Nothing can truly change until there is a fundamental transformation in our social outlook towards a cultural mindset in which entrepreneurship is prized at the same level if not at a higher level than salaried employment or ubukalani, preferably in government (or as it strangely seems in Rwanda, in an NGO, preferably foreign or foreign-funded). The author himself put his finger on the core problem: the hurdles our business owners have to jump in order to start a business.On the family front the constraints are understandable, of course. Many families labour under highly constraining financial circumstances and are impatient for their educated progeny to start working in order to contribute to the household income.To such families the probably long and extremely uncertain payoff from starting a business, nursing until it becomes profitable – if ever (remember there is an extremely high death/attribution rate for business startups; for every Bill Gates, you have thousands than never made it to profitability and left their would-be millionaires saddled with debts they will never be able to pay off).A small starting salary, with the hope of regular increments would look like a more attractive proposition to many parents than the uncertainty of their child jumping into starting a business with money none of them had, no access to affordable credit without substantial collateral, little if any business experience from anyone in the family or among their circle who could point the young person in the right direction and provide critical advice and support along the way, etc.Remember too, contrary to most, Bill Gates was born into serious money, providing him with a cushion in case his idea tanked.In many Western countries – and not a few emerging economies – would-be entrepreneurs have a plethora of support mechanisms, including angel investors, public and private institutions to help with business plan design, marketing and financial plans and management.In addition, startups are exempt from paying taxes until they achieve a certain level of profitability. Not so, in many of our countries, where a would-be entrepreneur hardly receives significant assistance, but may in fact be required to pay taxes on notional future profits. Thus our aspiring entrepreneur is hamstrung even before they learn to walk in their business. As a last point, there is nothing mutually exclusive between being a lawyer, engineer, doctor, or a journalist and being an entrepreneur.Education and training in any of those disciplines can be an excellent basis for setting up a legal practice, an engineering consultancy, a medical institution or a news organisation or a public relations or communications consultancy company. All these, too, are examples of entrepreneurship.Mwene Kalinda, Kigali

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Why startups in developing countries need more support