Mapping the Ecosystem for Entrepreneurship Support in Venezuela

Mapping the eco-system for employment and entrepreneurship

National Report

This project has been funded with support from the European Commission.

This publication [communication] reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

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INTRODUCTION Known in the world as the “the pearl of the Caribbean” because of its countless natural wealth, flora, fauna, minerals, paradise landscapes, weather diversity, apart from its most precious treasure: its people, Venezuela is actually going through one of the toughest crises of the last 50 years. A political model that has affected all the areas in the population; socially, politically and economically. A deficient infrastructure of basic services, an accumulated hyperinflation until August 2020 of 1,097.67% according to the Assembly, the biggest diaspora in history, with approximately 4.5 million Venezuelans who have left the country until late 2019 according to UNHCR figures and, not to mention, the world crisis after the coming of the COVID 19 virus.

In this complex scenario, entrepreneurship has become an emerging solution to fight poverty and allowed us to open new possibilities to those who still bet on the country’s rebuilding, development, and progress The countless needs that Venezuelan citizens have to face encourage the generation of creative ideas to work out through undertaking, but they are generally informal, familiar, small, shorttermed, and with little strategy. Therefore, the Venezuelan context has great potential for anyone who can create their own entrepreneurship and generate necessary income; however, entrepreneurships may be diluted since they don’t count on a strong strategy from the artists handling a business so it becomes sustainable.

The report we now present shows a current glimpse of the Venezuelan enterprising ecosystem, the different projects and programs that are being carried out in our country, the key players who are giving life to enterprising movements nationwide, as well as some experiences from some entrepreneurs who have been benefitted while participating in such programs.

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ENTRERPRISING CONTEXT | Key Players There are actually several key players within the Venezuelan Enterprising Ecosystem who, still in the middle of the existing difficulties, are giving support to entrepreneurs in different areas of the country.

We find the biggest concentration of organizations that support entrepreneurship in the country’s capital (Caracas and Miranda). Some organizations support enterprising groups nationwide, just as we also monitor important movements towards the east (Nueva Esparta and Maturin), the west (Barquisimeto) and some cities like Valencia, Merida, Maracaibo y the Eastern Seaboard of Maracaibo Lake, in Zulia.

The research we made brings up a classification of five big groups that form the organizations and institutions that boost the entrepreneurship in Venezuela: 1. Government or public institutions 2. Non-profit organizations and donors 3. Middle organizations that add value to the ecosystem 4. Universities and educational institutions 5. Financial institutions (angels, investors, companies with risky capital accelerators, institutions for an alternate enterprising financing) The results allow us to see the enterprising ecosystem in more detail in the whole country and it can be useful to get more information about it and see the possibilities the ecosystem may offer to someone who wants to get into the enterprising world in Venezuela.

Among the services provided, we can give the following: •

Incubators and accelerators: these are organizations that join the development and growth of a small group of social and business entrepreneurships. Its focus is offering

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technical accompaniment in their business, as well as identifying and measuring of the impact on the direct beneficiary population. The incubators support prototypes or minimum viable products to establish and validate their business models and their impact.

The accelerators also work with already established entrepreneurships, the business models of these organizations vary from external financing, service payments, to stocks sales of the incubating or accelerating entrepreneurships.

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Awards and recognitions: these are organizations specialized in granting symbolic recognition or money awards to social entrepreneurs or dynamic businesses with impact potential with the goal of boosting them.

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Impact investment funds: these are invested in organizations that produce goods and services in order to generate a social impact to get a bigger financial return or the same as zero aimed at measuring their social impact.

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Seedbed movers: these are organizations and programs that work in the ONG sector or voluntary workers to raise awareness about social undertaking and/or business and boost future undertakers. They seek to grow and quickly replicate themselves to reach to even more people every time.

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Webs of entrepreneurs: they are characterized for having national and international webs of entrepreneurs who generate knowledge and mutual support among their members.

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Articulating organizations: their role is to fortify the ecosystem in which they manage themselves, in joint with other players, such as the private sector, the public sector the academy, among others, in order to increase their participation and support. They usually count on data bases of social undertakings and/or businesses, rewards to keep boosting the ecosystem and publications to generate and broadcast contents on the subject.

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Training programs that academic organizations and the civilian society or the private sector offer, that train in competences and enterprising skills and that teach knowledge for the creation of an entrepreneurship.

The results of the research show that the biggest demand in the market of training is in the development of enterprising competences, value proposals, canvas models, and there is also www.getyesproject.com

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an important demand in business counseling, coaching for entrepreneurship, project management, business development and enterprising abilities. Mostly, the programs are aimed at young entrepreneurs between 18 and 40 years of age; some programs include support for teenage mothers, girls and entrepreneurs with some handicap.

Many of these programs receive support from international organizations for they don’t have any cost for the participant, the entry might be through applications, contests and the selection system are usually daunting and demanding; the entrepreneur must show his/her interest in learning, apply the knowledge and their commitment and disposition to complete the program from start to finish.

There are also organizations dedicated to the training of entrepreneurs, whose training programs have the price for the participant, and they may very between $10 and $5,000, depending on the teaching organization, the covering content and their duration.

Additionally, to complete the report, a summary is shown on the strengths, opportunities, and challenges of the Venezuelan enterprising ecosystem, taken from the report written by the ASHOKA

Organization

Venezuela

(https://www.ashoka.org/es-ve/country/venezuela)

in

December 2020, titled: “Articulators of the Possible. A View from the Venezuelan Enterprising Ecosystem: Strengths, Opportunities and Challenges.�

Challenges in the Venezuelan Entreprising Enviroment: The country is currently in a specially complicated situation. Besides facing the global challenges and the world crisis thanks to the uncertainty and the change of habits because of the pandemic, it also faces the particular challenges of a humanitarian emergency scenario marked by severe freedom and right restrictions, tough access to basic services, the dismantling of the institutional system, hyperinflation, and with a democratic and governmental crisis. To all this, challenges are

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included such as talent leak by migration and the total absence of public policies that boost entrepreneurship, which makes the Venezuelan enterprising scenario even worse. The context is adversarial for entrepreneurs since there are not enough incentives, and it lacks the ideal conditions for social development and to generate a positive impact.

As for the identified challenges, we found the following: •

Absence of the regulatory legal framework and public entrepreneurship policies.

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Public policies that do not promote or stimulate the economic growth the private company and entrepreneurship need.

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Poor technological infrastructure.

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Digital exclusion (tough Internet access and little access to electronic media, censored and blocked mass media as well).

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Weakness in the financial environment and in the investment of the enterprising ecosystem.

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Failure in the continuity of public services (water, electrical power, gas).

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Isolation between geographies due to faulty Internet and fuel.

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Talent migration and leak.

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Efforts to motivate entrepreneurship personnel.

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Difficulties for company registration or modification.

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Covid-19 pandemic.

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Hyperinflation and reduction to access to resources.

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Cuts within the private company in its business responsibility.

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Weakened educational section, hit by the crisis.

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Articulation absence: atomized services, only located in big cities of Venezuela.

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Strengths in the Venezuelan enterprising Enviroment: The human capital the Venezuelan ecosystem has, according to what the key players express, is invaluable because it counts on its players’ mystique, passion, and sense of purpose. Alberto Vollmer points out that the “Venezuelan talent is extraordinary. Many of them are self-taught.”

The “Venezuelan talent”, as mentioned by Alberto and referred by others, corresponds to a profile that seems to count on competences, abilities, attitudes and particular aptitudes that incline towards the enterprising initiative, yet within a challenging context, thus keeping a vision in which entrepreneurship constitutes an opportunity to face the juncture and move forward.

Qualities of the Venezuelan enterprising talent •

Commitment to development and the country’s progress.

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Capacity to work at uncertain times.

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Ability to efficiently administer few or scarce resources.

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Huge resilience, flexibility and perseverance through adversity.

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Capacity and good disposition to build and work on networks.

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Proactivity and capacity to assume risks.

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Creativity, curiosity and solutions from doing.

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Innovation capacity and to think differently, “out of the box.”

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Solidarity and empathy, disposition to help.

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Attitude for overcoming, resilience that allows to keep themselves updated and avantgarde.

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Competences to work on digital platforms and social networks.

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Communicational ability and to promote their undertakings.

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Service calling.

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Capacity for immediate response.

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Opportunities in the Venezuelan Enterprising Enviroment:

We define opportunities as the circumstances or context situations that can be used in favor and in benefits of entrepreneurship. Some identified opportunities are the following: •

Local governments that work as blueprints to implement public policies for entrepreneurship.

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Guilds as key organizations to articulate the ecosystem.

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Venezuelan diaspora as key performers to support the enterprising ecosystem.

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Social innovation as key to Venezuelan entrepreneurship.

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Education and broadcast for a culture of change agents.

To undertake in Venezuela is a high-risk action. Therefore, it has become imperative that the advances and successful cases be known to mass media and social networks playing an influential and fundamental role in this, as a replicator of an activator’s inspiration and as a multiplier of a successful enterprising culture, eager to rebuild the country. Venezuelan entrepreneurs are usually proactive, curious, risk takers, managing few resources very efficiently, focusing on doing, and fundamentally resilient, audacious, adventurers, and capable of working at uncertain times, quickly adapting to the context. The study showed that, in order to fortify the articulation of the ecosystem, you need to periodically upgrade the identification of the players who are promoting initiatives to boost a more enterprising and more innovative culture. You are required of institutions that can perform the role of “connectors” that facilitate the meeting between people with ideas, talent, knowledge, capital, and opportunities.

To view the detailed research, and the particular data about each player in the ecosystem, please click here.

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