Lessons from the American entrepreneurship ecosystem

Boosting our entrepreneurial system

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  • Fostering a supportive culture is key for entrepreneurship.
  • The government needs to create policies that enable entrepreneurship, such as tax incentives and intellectual property rights.
  • Universities in Lebanon need to include real-world, hands-on engagement within entrepreneurship programs.

With the current hardships and challenges Lebanon is encountering, the government needs to look to new ways to reboot its economic system and to boost its economic growth. The answer is in investments into our entrepreneurial ecosystem. This summer, I had the opportunity to spend three months in the US as a visiting scholar at Ball State University, where I learned a lot about the American entrepreneurship ecosystem. Although entrepreneurial developments in Lebanon are progressing, I believe that Lebanon can learn from the solid American ecosystem to make running businesses easier and more efficient.

Supportive culture

In the US, the entrepreneurship culture is community oriented. When I was there, I realized that there is a sense of responsibility toward the other, and a willingness to support each other. A key factor of America’s innovation ecosystem is the strong interconnections among its people, which promotes collaboration and the exchange of ideas. This is important for innovation because it allows entrepreneurs to have allies, receive help, and form connections more easily. Entrepreneurs usually seek supportive communities that encourage entrepreneurial pursuit and reward innovative mindsets. To thrive, entrepreneurs need to be immersed in a culture of innovation and one where risk-taking is supported. Culture is an enabler for the entrepreneurial ecosystem and can play a vital role in motivating entrepreneurs to launch their own companies.

Enabler government

On the policy level, undoubtedly the Lebanese government has to create new policies that will transform the country’s entrepreneurial ecosystem into a more dynamic and finely tuned one. In fact, the US government plays an important role in nurturing entrepreneurship by developing protected intellectual property rights and imposing low and stable nondiscriminatory tax regimes and regulations. In addition, the US government aims to make doing business easier in the country. The government wants to reduce the time and effort required to register a company. For instance, it took me less than 72 hours to register a business in the state of Indiana. The entire process was done online from my home and through a website.

Entrepreneurial education

American universities have a huge impact on the entrepreneurial ecosystem by offering high-quality academic programs that equip students with the mindset, knowledge, and skills to run entrepreneurial firms. Entrepreneurship is integrated into the curriculum and available at all levels of hundreds of business schools across the US. Courses focus on all aspects of business growth including pre-startup, startup, growth, and consolidation stages. In addition, business schools have strong connections to industry, with a number of research centers and innovation hubs.

Entrepreneurs need to be immersed in a culture of innovation and one where risk-taking is supported.

In the Lebanese context, universities are showing interest in investing in entrepreneurship education, but still with a real lack of hands-on, real-world engagement with the problems faced by Lebanese entrepreneurs in the market. The role of entrepreneurship education should be approached with caution. There is no doubt that entrepreneurship education is likely to be of value to Lebanese students. However, the reality of launching, sustaining, and growing a business in Lebanon has specific requirements. While some universities are focusing on how to launch a startup, they ignore the importance of teaching startups how to grow and scale a business in the Lebanese context.

Access to finance

To prosper and grow, innovative and creative startups need access to appropriate forms of finance. The availability of finance is a further positive feature of the American entrepreneurial ecosystem. For example, the US Small Business Administration provides funding to entrepreneurs and small businesses when private banks are not inclined to do so. Many states also offer incentive programs for startups. For instance, Massachusetts encourages startups to invest in research and development (R&D) by offering sales and use tax exemptions. If a startup in Massachusetts is buying gas, steam, electricity, or heating fuel, and has five or fewer employees, it can be exempt from sales and use tax. Actually, some Lebanese or foreign would-be entrepreneurs might not make the decision to invest in Lebanon because of the high taxes. To compete with other businesses, startups need a supportive financial environment. Reducing financial barriers would definitely then improve the Lebanese ecosystem dynamism.

The American ecosystem took years to build. In Lebanon, around six years ago, the entrepreneurship spirit was nearly nonexistent. However, in 2013, with advising from the World Bank and EU, Banque du Liban, Lebanon’s central bank, issued Circular 331. The Circular played a significant role in activating Lebanon’s startup economy across the country. The Lebanese government, alongside local institutions, should keep this momentum and provide new initiatives and incentives to drive growth in our economy.

Samer Elhajjar has a PhD in marketing from the University of Strasbourg. He is an assistant professor at the University of Balamand and consults in strategic management and marketing.