By Op-ed Contributor | Jan 16 2012American ,American business ,capital ,chamber of commerce ,Entrepreneurship ,
Tunisian Entrepreneurism and Innovation: The Road Ahead
By Chris Carr, Professor of Business Law & Public Policy at California Polytechnic State University
Chris Carr is a professor in the Orfalea College of Business at California Polytechnic State University located in San Luis Obispo, California. He was recently a Fulbright visitor hosted by the University of Sfax. He can be reached at firstname.lastname@example.org.
I recently spent three weeks in Tunisia as a Fulbright Senior Specialist. I was invited to advise how Tunisian universities might move forward in the area of teaching entrepreneurship and innovation. I met many wonderful and very smart people in education, business, law, medicine, engineering and government, and I am grateful for their time. Here are some takeaways from my visit.
Roughly 55 percent of the Tunisian population is under the age of 25 and in recent years unemployment has hovered around 14 percent (30 percent and higher for recent university graduates), so for democracy to take root in Tunisia job creation will be crucial. For this reason alone entrepreneurship and innovation are being taken seriously in Tunisia and are viewed as a way to jump-start the economy and job growth. The players here also recognize that recent political changes present a rare opportunity that may never come again. Tunisians are also wisely studying lessons from places like Silicon Valley, Route 128 and the Research Triangle in the US and smaller innovation clusters such as those found in Finland and Singapore. Here are some of the upcoming challenges I see for Tunisia.
Mindset and Culture: Entrepreneurship and innovation are as much about culture and a way of thinking as anything else. They are less about new technology parks, cheap rent, tax breaks, and new degree programs and academic courses. To succeed, entrepreneurial thinking must permeate all levels of the entrepreneurship ecosystem from top to bottom, and regardless of whether it is in the schools, government or private industry. Tunisia does not yet appear to be the land of second chances where startup failure is valued and evidence of being a seasoned entrepreneur. One of Tunisia’s biggest challenges will be to create and foster the risk taking adrenalin and mentality that forms the DNA of many entrepreneurs. This will not be easy, although there is some recent evidence that is encouraging. For example, a number of Tunisian entrepreneurs recently participated in the Maghreb Entrepreneurship Conference, a follow-on to U.S. President Barack Obama’s Presidential Summit on Entrepreneurship.
Lack Of Access To Capital: Securing startup funds appears to be one of the biggest hills to climb for aspiring entrepreneurs in Tunisia. I was told private lending institutions require a prohibitive 20% deposit. And as best I can tell, there is no startup funding support from family and friends (as can be found in the Chinese model); no rich Tunisian people or angel investors looking to step forward and invest in the next exciting startup; no rich Americans or Europeans have yet arrived looking for investment opportunities; and no venture capitalists are in the country stalking for business opportunities. This unfortunately means young entrepreneurs cannot access the wise business expertise such investors can offer to build and grow their business.
Connection to Private Industry and Successful University Alumni: The university educational environment in Tunisia, particularly as it relates to entrepreneurship and innovation, seems to be disconnected from private industry and successful alumni. This is a missed opportunity.
Small Businesses, Scalable Startups, or Large Company Entrepreneurship: These types of entrepreneurship are different, and need to be taught, nurtured and managed in different ways. Nobody could identify for me which one Tunisia wants to focus on. No country has the resources to do it all. It is important to pick one and focus.
How Can Tunisia Attract American Business?
I was asked this question, a lot. Here was my advice.
This goal will require a sustained, focused effort at all levels of the pyramid. There is no magic bullet. Ask your very best and brightest people to work on this. But the good news is Tunisia has a lot of very bright and smart people to pull this off.
Decide what your strategic focus will be. For example, “For the next five years we are going to focus on building innovation in areas X, Y and Z.” Tunisia’s resources and human capital are limited. Make this difficult strategic and political decision sooner, not later.
Identify which type of entrepreneurship Tunisia will focus on. If it wants to attract American business, scalable startups and corporate focused entrepreneurship will be more attractive; small family business and micro credit type entrepreneurship much less so.
Aggressively identify and destroy any left over corruption from the Ben Ali regime, make it a priority and do it quickly. Corruption in business closes the door for many aspiring startups and entrepreneurs not born into the hands of nepotism.
Start building Tunisia’s (new) national brand. Tell that story to every American businessperson and government official you interact with. That is, we are smart; hard working; well educated; good universities; a stable country with stable and independent institutions; progressive and open minded people; moderate government; corruption from the prior regime will soon be eliminated; we offer neutral courts, good judges and good lawyers to fairly decide business disputes between locals and American firms; we are a gateway to Libya; and we are a hub that can allow American firms to access the larger markets of Africa, North Africa, the Middle East or Europe. On this point I can’t express enough how favorably impressed Americans were with your recent revolution and how happy we are for you in its success. The largely non-violent way your revolution unfolded and how quickly it succeeded in comparison with other recent Arab revolutions is appreciated and important to attracting American business.
Good technical skills in your engineers and the like are important, but may not be enough for American firms to come. Other places with much larger domestic markets also offer low cost, high quality engineering and strong technical skills (e.g. India). Tunisia must also show that its work force and university graduates are strong in the “soft skills” of business, such as a creative and innovative mindset, strong oral and written communication skills, leadership and teamwork skills, business ethics, and a true understanding of globalization.
Get your Rolodexes out and work with your local, provincial and national governments, university presidents and professors, the US Embassy in Tunis, Tunisian Embassy and all Tunisian consulates in the US, various US state governments and Chambers of Commerce, Tunisian Diaspora, the right contacts in places like Silicon Valley, Route 128 and the Research Triangle, etc., to identify and narrowly target the US firms likely to be attracted by the new Tunisia and your new technology parks. Get a business road show together that will bring them to Tunisia, and once here you must sell and deliver on your promises. There is encouraging evidence this is already happening. While writing this piece I learned that in late January 2012 the US State Department is hosting nine prominent Tunisian Chamber of Commerce Directors for a visit and just this type of networking and relationship building.
Relatedly, learn from places like Singapore and Hong Kong. Candidly, many Americans like to do business in these places because they are “Asia lite”, particularly with respect to hotels, food and shopping. Keep this in mind as you build and modernize Tunisia’s tourism industry.
I acknowledge that living somewhere for three weeks does not make you an expert and there is a good chance I misunderstood or misinterpreted some of what I saw or heard, or that I did not see and hear enough. In closing, I thank my Tunisian hosts for the invitation to visit your amazing country and meet some of your wonderful people. I was impressed and had a very positive experience.
Insha’Allah, I will be back.