Why so few entrepreneurs in Panama?

I have often wondered about the lack of young entrepreneurs in Panama. Most businesses are owned and operated by family and friends of the wealthy few in Panama. They got their positions through connections which explains a lot about the lack of business ethics and service orientation you find here. I thought it had more to do with lack of opportunity than desire on the part of the young person, but according to this article from La Prensa, most young people want the security of working for someone else. Schools teach students to be adverse to risk and for the most part are preparing people to become workers in established businesses rather than being the one who establishes the business. I think this is one of the real setbacks for Panama in developing a thriving middle class.

In the U.S. the school systems also churn out hordes of worker bees, but even so, there is a large number of young people with ideas and energy who want to start their own businesses. The first step in making a change is realizing there is a deficiency and this article clearly shows the government is aware of the issues and are making efforts to change it.

As a consummate entrepreneur myself, having started many businesses in my youth, I believe the blame is the school system just as the article points out. Students are not taught to think, but to memorize in an attempt to drill into them the knowledge accumulated in the past. Certainly there is a need for the basics, but this continues all the way through high school and into college. I was a poor student during my school years because I was always dreaming of doing something else other than sit and memorize. Fortunately I had a father figure who encouraged my desire to be creative.

In my many conversations with other successful people I have found most were like me in their lack of interest in formal education and a strong desire to get out and create something. Many who did have a degree, did not end up using what their degree declares they are proficient in.  For the most part we all forget most of the memorization we did in school and technology is changing so fast, what we thought we knew is outdated in just a few months. You can find out about any subject via the internet and when I want to start a new enterprise I spend hours digging through it to learn as much on the latest and greatest as possible.

Certainly if you want to become a professional such as a doctor, lawyer or engineer, there is only one way and that is through higher education and a degree. But for the young person who answers the question "what do you want to do when you grow up" with "to be rich like you" the higher educational route is not the most rapid way to accomplish that desire.

In my talks with my own children I find out a lot about the educational system in Panama. Although my kids are great students having memorized well they have not received any training in being creative or the reality of risk versus reward in school. I have to instill these values or they would not have them.

A dream that few people realize

68% of Panamanians want to build a business, but only 14% said they would dare to take that route in three years. Young people under 25 are the least likely to risk riding the wave.

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Mary Triny Zea
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At 28, Gabriel Rivas working on a technological invention that could be the solution to avoid wasting electricity.

His profession as an electrical engineer helped him to prepare a device through a software to detect the sites of major power consumption in a company. Thus expected that companies can maximize their resources and close the valves of waste.

Edison Romagna, 21, is micro ice cream from last year. Started with a capital of only $ 10 in your home and want to generate profits for your operation more productive.

Both young men belong to different social strata but have a common dream: long for their businesses thrive. Hundreds of Panamanians like Rivas and Romagna have a favorable view of entrepreneurship, however, few projects materialize.

Young people under 25 are the least involvement with the generation of wealth through entrepreneurship.

431 of 34,000 micro, small and medium enterprises (MSMEs) in operation and registered until October in the Micro, Small and Medium Enterprises (Ampyme) 3000 155 belong only to youth up to 25 years.

In addition, the 39 000 616 registered business ideas, only 6 000 179 belong to the youngest.

These figures reflect the poor level of entrepreneurship in youth, a reality not only for Panama but for most Latin American countries.

"One of the causes of the deficit of entrepreneurial spirit is that students are taught to be workers and not entrepreneurs." "Society gives a negative connotation to the risk," the report Decent Work and Youth in Latin America 2010, International Labour Organization.

Consequently, when young people complete their studies, the majority looks to belong to the group of employees. At this stage, make contacts and gain experience, positive features in the role of entrepreneurs, but the drama is that many never are seen as generating employment and wealth.

According to experts on the subject, is how many end up all their productive lives in the same condition as when they started the heavy career.

Philip Chapman economist is concerned to see the kind of undertaking that includes the survey "Global Entrepreneurship Monitor 2009 (GEM)" with little or no added value to the community ": opening of kiosks, inns or offering services such as taxi drivers while research and product development are lagging.

Shared Reality

The GEM analysis, a study by the City of Knowledge Foundation, with about two thousand people in the country, showed that only 9.6% of Panamanians are embarking on their business.

The Panamanian flag is lower than in Colombia with 22.4%, Peru (20.9%) and Guatemala (26.8%), although higher than U.S. (8%) and Italy (3.7%).

68% of respondents estimated that starting a business is desirable, 63% feel they have the skills to succeed, but only 14% think do it in the next three years, and only 4% do business with more than 42 months in operation .

"Good news for Panama is that the majority of entrepreneurs facing these initiatives by identifying opportunities and not by the absence of other options to generate your income," says Hugo Kantis, consultant to the Inter-American Development Bank Coordinator Entrepreneurial Development Program of the National University of Sarmiento in Argentina.

This contrasts with the reality of the countries of the region dominated by necessity entrepreneurs. The major challenge for Panama is to raise their rate of entrepreneurial activity, said Kantis, for it requires a comprehensive strategy that includes actions in education, innovation and financing.

In the country have opened several fronts to encourage young people in creating new businesses.

Gabriel Rivas is developing its software with support from the Business Accelerator of the City of Knowledge and earned funding through the National Secretariat for Science, Technology and Innovation.

The Business Accelerator free guidance to those interested in starting a business to achieve its development financially.

The Ampyme, on the other hand, has programs that seek to awaken the spirit entrepenershiip among twelfth grade students in public schools. Edison will receive from this institution Romagna seed capital to start their business.

Enabled him to provide good customer service and basic applied business math. In this way he realized that one of its products was not profitable.

For experts in this area, efforts are insufficient. "They must bring home from grade school on a regular basis and to grow with this mentality," said Linares Laru, project manager of the Business Accelerator. "The young Panamanians see the venture as something very distant." Rivas Romagna and now have the challenge of not giving up and being "very resilient and self-motivated, fundamental qualities of a successful entrepreneur, said Linares.