Entrepreneurial qualities are rare and entrepreneurial endeavors have positive spillover benefits to the community. When an entrepreneur identifies a market, puts his savings into his idea, and works to make it a success, he shows a lot of qualities at the same time. Identifying the market shows his intellectual curiosity. Investing in his ideas shows that he is willing to put money on where his belief lies. Working on the idea shows his commitment to slog to make his dreams come true. These are all praiseworthy qualities. If he succeeds, he benefits the community as well. If he fails, the loss is all his. He may lose his entire life’s saving and even his home. Despite all these praiseworthy qualities, why does our society, in general, not give the same respect to an entrepreneur that it gives to an intellectual?
If we are going to be a prosperous nation, we need to make it easier for those with the rare ability to generate wealth to pursue their goals. This group deserves the kind of place in the society that Brahmins have enjoyed for centuries.
There could be multiple reasons. Historically, intelligentsia in our society has been dominated by the Brahmins. They have also been powerful and influential members of society. As the chosen pursuits of one of the more successful groups in the society, somehow emulating them (being an intellectual) must have become associated with status. Or, it could be that since it was the Brahmins who decided what a more noble profession was, they downplayed the role of businessman and emphasized academic pursuits to be nobler. Or, it could be that in a largely illiterate society, an educated person had very high economic value and hence higher status. Perhaps, all of these reasons contribute.
As the old social order transforms, though, one can expect to see changes in the perception of entrepreneurs as well. The proportion of adults that are literate, that have college degrees, and that have post-graduate degrees are all on the rise. The value of literacy, a college degree, and post-graduate degree may not be a sufficient criterion for higher social status anymore. The importance of entrepreneurial skills will slowly get recognized. And the status of entrepreneurs will be elevated. This will be a refreshing change and will contribute, to some degree, in making Nepal a prosperous nation.
Policymakers, in the meantime, can help in accelerating the process. To do so, the government needs to cut down the red-tape for those seeking permission to set up a business, make it easier for them to access a bank, develop well-defined personal bankruptcy laws and encourage banks to share information regarding credit history. This will all make it easier for someone with new ideas to start his own business and get loans at a cheaper rate.
It is wise to give the local government (not provincial) the powers to carry out all these activities. This will decrease the transaction cost in dealing with bureaucrats for budding entrepreneurs. It will make it easier to complain against a civil servant to the locally-elected political representative. It will also make it easier for entrepreneurs to get loans. Research shows that small local banks often give loans at lower rates. The theoretical explanation for this finding is that officers in smaller banks often know their clients better, and since better information decreases the risk for banks, they can offer lower rates.
The government could also have small business development programs. In the United States, these independent units are often housed in public universities. The goal of the small business development unit is to exclusively cater to local businesses, often new businesses. The idea is to help them make smart business decisions. Judging by how popular these units are, it is likely that they have a significant impact on the local community. A similar model could be adopted in Nepal.
If we are going to be a prosperous nation, we need to make it easier for those with the rare ability to generate wealth to pursue their goals. They need to be handled with care; they are the future of the country, more than anybody else. This group deserves the kind of place in the society that Brahmins have enjoyed for centuries.
(Writer is an Assistant Professor of Economics and Finance at Texas A&M International University in Texas, US.)
680anand@gmail.com
Related story
World Intellectual Property Day being marked today
