Start a business to grow and create jobs
The importance now recognized for SMEs is a far cry from the disdain with which they were once judged compared to large corporations. At the end of World War II, the number of businesses was significantly reduced, and large companies took center stage in the business world. Furthermore, the triumph of centrally planned economies in communist countries and the expansion of large multinationals in the capitalist world relegated SMEs to a marginal position. Everyone wanted to work for a large, "safe" company.
Back in the 1980s, the level of economic uncertainty forced these large companies to restructure and downsize, which in turn increased unemployment. It was during this time that SMEs resurfaced, and this resurgence led to studies demonstrating their importance and key role in the economic development of countries.
Today it is known that SMEs play an essential role in linking economic growth and employment. Following the usual definition of SMEs (up to 249 employees), they contribute approximately two-thirds of employment and nearly 60% of turnover in the European Union, with similar figures in countries of other economic areas.
SMEs are considered to have the greatest potential for job creation. Current demographic studies of businesses demonstrate that job creation is primarily driven by SMEs (which originate from micro-enterprises and then grow in size), while large companies either maintain or reduce their workforce (depending on the region). In qualitative terms, SMEs play a key role in:
1) A primary role in providing first-time employment, effectively ensuring a portion of workforce training; and
2) They have, in many cases, an absorption function for the least favored categories in the labor market, since they hire more than proportionally young people, women and unskilled workers, while presenting a particular structure of wages and productivity.
SMEs are generated by the entrepreneurial movement
But SMEs don't just appear out of thin air; they are created by entrepreneurs. The business demographics that entrepreneurs bring forth are known as the entrepreneurial movement. There is no doubt that entrepreneurial activity is crucial for the economic development and social well-being of any country, as demonstrated by the growing interest in the topic from national and regional government institutions [1].
Entrepreneurship is driving what some have called the Fourth Industrial Revolution, in which business creation shines as a central element in all economic systems. This is a silent revolution that is contributing to job creation in many countries, or at least—in times of economic crisis—to maintaining employment levels or curbing the rise in unemployment, representing significant percentages of their GDP.
Starting a business in Mexico
An international cyclical study on the entrepreneurial capacity of different countries—known as the GEM Project (Global Entrepreneurship Monitor), promoted by London Business School and Babson College—ranked Mexico first out of 29 countries in its 2001 edition, including countries like Singapore, Japan, the USA, Germany, France, England, Spain, and Argentina, based on its "entrepreneurial capacity." This suggests great potential for the country in this area if it successfully addresses the critical variables upon which, according to the GEM Project, entrepreneurial activity depends.
Entrepreneurship training
One of the most important variables for fostering entrepreneurship with significant levels of effectiveness and efficiency is training, within a context of entrepreneurial culture. Training is the beginning of a virtuous cycle whereby entrepreneurial education not only improves the efficiency of the entrepreneur but also, by influencing their cultural environment, leads to the emergence of more entrepreneurial aspirations that demand further training, thus reinforcing the process.
An international alliance to undertake
In this context, two leading educational institutions, the Technological University of Mexico (UTM), one of Mexico's most established and effective universities, founded in 1966 (with five campuses in Mexico City and over 50.000 students), and EOI, Spain's oldest business school (founded in 1955 with campuses in Madrid and Seville and the country's most experienced entrepreneurship training program), have joined forces to provide training in "Creating Microenterprises" to Mexican entrepreneurs. Since 2000, these institutions have been offering successive editions of long-term postgraduate courses in this field, achieving such a high level of success that they have run eight consecutive editions to date, with the ninth expected to begin in mid-May.
The program – aimed at university postgraduates and/or practicing SME entrepreneurs – has among its objectives the following: 1) to rigorously prepare future entrepreneurs to plan their business idea, ascertaining its viability and delving into the strategic approach with an international vision; 2) to provide management skills – for those with technical or scientific degrees – that will allow them to later work as entrepreneurs, once they have overcome the start-up phase; 3) to reformulate the strategic approach of their companies for those participants who access the program with companies already in operation; and 4) to acquire specialized knowledge about the physiology of SMEs and the behavior of entrepreneurs in this type of company, for those participants who wish to specialize as SME consultants.
Results of these programs
Currently, 125 entrepreneurs have completed their training and developed their business plans for creating, consolidating, or developing companies; these are the participants in five editions of the "Microenterprise Creation" program. Three more cohorts, with another 85 participants, are currently in training, which includes classes, consultations with specialists (in marketing, legal and tax matters, finance, operations, human resources, etc.), and individualized mentoring with a professor-consultant who acts as the Director of each respective business project.
Thirty new companies are already operational, and another 20 have implemented improvement plans. In the coming months, we expect more companies to enter the market and become established, providing benefits to entrepreneurs, employees, customers, and Mexican society.
[1] To illustrate, support for business creation and entrepreneurs is one of the priority axes of the European Union's active employment policies (see White Paper on Growth, Competitiveness and Employment, European Commission) for the periods 94-99 and 2000-2006. Eurostat.
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