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Friday, November 1, 2013

What does it take to be an entrepreneur in Mexico?

The main issue with Entrepreneurship is not to create a new venture, but to maintain it and make it grow. According to popular thought, in Mexico the main characteristic that an entrepreneur must have is "Perseverance", then it comes at second place "Tolerance towards frustration" and behind it there is" Capacity to work independently" (El Universal, 2013).

One of my professors in Finland asked me if it's difficult to study Entrepreneurship in Mexico. She wonders why is there so many people practicing entrepreneurship in the informal way.

In Mexico, 7 out of 10 people believe entrepreneurship is a matter of personality and 60% of entrepreneurs find independence and the seek of freedom as the main motivations to start a new business (Hernández, et al., 2006). 

According to the Mexican National Institute of Statistics and Geography (INEGI by its name in Spanish) unemployment rate in Mexico is about 4.92%. Around 44% of Mexican population is part of the labor force. From that, 26% is underemployed (INEGI, 2013). Those might be two important reasons for Mexicans to start a new business. But what really bothers is why do most of Mexican entrepreneurs decide to operate into informality?

The truth is that quality education in Mexico is expensive. Public universities (and some high schools) are focused more in technical degrees than plain professional (BSc, MSc) degrees. The traditional education system teaches how to become an employee instead of an employer. It trains people to think about money in a very limited perspective as well as to receive orders (El Universal, 2013). 

And the worst thing is that only 40% of students who start the university manage to graduate from their studies. That inefficiency rate might imply that the problem with education in Mexico resides in the contents of the educational programs. 

An Entrepreneur decides what he or she wants to study and learn. He ask questions and challenge the system without the fear of being repressed.

There are institutions fostering entrepreneurship but they are poorly promoted. Just a few groups of people know about their existence, their programs and how they work. It is much easier to start an informal (usually micro) business and develop it at a minimum scale. That's the way several families generate family income.

Gender inequality is also shown in Mexican labor. 60% of labor force in Mexico is male. In education, social stratification also affects the quality of results in students. In each state, education quality varies a lot as well as students' accomplishments regarding years of studies (Backhoff, 2011).

Some interesting sources (in Spanish):

El emprendedor en México: Ingenio vs Innovación (in Spanish)

Instituto Nacional de Estadística y Geografía (in Spanish)

Inequidad Educativa en México (in Spanish)

La inequidad educativa en México (in Spanish, abstract in English)

Cheers!

Jonathan

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