Government and Youth Entrepreneurship

6 February 2010

Address of Rep. Bongbong Marcos
6th Mindanao Business and Management Youth Congress
School of Business and Management Council
Xavier University
Cagayan de Oro City
6 February 2010

I am honored by your invitation to address this 6th Mindanao Business and Management Youth Congress here in Cagayan de Oro City. And I welcome the change from the turmoil of our national capital to the calm of this university campus.

Since its launch in 2005, this Management Youth Congress has kept true to its mission of serving as “a catalyst for entrepreneurship among the youth.” It has attracted annually a formidable group of young people in Mindanao. And it has raised consciousness among the youth of the vital role of entrepreneurship in the development of communities and the nation as a whole.

I am asked to discuss here the topic: Government and Youth Entrepreneurship.

The topic immediately suggests two questions: First, whether Government should -- as a matter of policy -- encourage the growth of youth entrepreneurship to assist its economic development program. And second, how Government can encourage and enable young entrepreneurs to succeed, and what programs it should adopt.

The Case for Youth Entrepreneurship

The most compelling reason for Government to encourage youth entrepreneurship is the fact that the economy cannot provide enough jobs to our people of working age. And we are now living through a period when some 10 percent of our population are either unemployed or unemployed.

While some 10 million of us find their answer by working overseas, others have the option of self-employment and starting their own businesses. Interestingly, this second option offers the added bonus of generating jobs for others.

But more than necessity, it is only natural for our society to encourage our youth to engage in entrepreneurship.

Peter Drucker, the guru of business management, stated most persuasively the case for the engagement of the youth in business. He believed that the entrepreneur’s role in society is to bring about innovation, and it is the youth should who are most likely to bring innovation.

He wrote: “Innovation and entrepreneurship require young people. Unless you start to innovate in your twenties or, at the latest, in your early thirties, you will never do it…The same is true [for all countries]. Innovators and entrepreneurs have to start early.”

The annals of business are filled with the stories of great entrepreneurs who began their careers at a young age. For example, at the age of 15, Bill Gates went into business with his pal, Paul Allen, two years his senior. They developed "Traf-o-Data," a computer program that monitored traffic patterns in Seattle, and netted $20,000 for their efforts. Here started the careers of these two multi-billionaires who developed Microsoft, one of the biggest companies in the world today.

If you think this is only true of Americans, consider: Akio Morita was 27 when he began to build what is now Sony. Konosuke Matsushita was 23 when he started his business. Iwasaki Yataro established what is now known as Mitsubishi when he was 26.

The recurring story is the same. Young entrepreneurs have had some of the biggest impact on business and economies. So the question is not whether young people should venture into business early. It’s how they can be encouraged and developed. And how Government can specifically help.

The Role of Government

This is a great challenge for a developing country like the Philippines, where capital is scarce and the business environment is more restrictive than enabling.

The first thing that Government must provide are the fundamentals of a working market economy. It must have the right policies and programs in place to promote stability, investment and growth.

It must manage the macro-economy well so that inflation does not wipe out our earnings and savings, the exchange rate is stable, the fiscal balance is maintained, and there is sufficient international confidence to invest their resources in our country.

It must build a viable partnership between the public and private sectors – for the building of infrastructure and the acquisition of new technology.

Where these fundamentals are assured, growth is possible. But something more is needed to propel an economy into the heights

A Culture of Entrepreneurship

And this is what is called “a culture of entrepreneurship.”

The truly strong economies have an internal dynamo. And it is best described as an entrepreneurial culture.

It explains the dynamism of China today. It shows us why Israel is developed amidst the huge swath of less developed societies in the Middle East. It is powering the emerging economies in Asia. And it is the force that will lift the US and Europe and Japan out of the global recession.

This entrepreneurial culture is what we also need in our country if we are to achieve our place in the modern world and the family of nations. And I submit that this culture will feature young people like you in a big way.

We see the beginnings of an entrepreneurial culture in the way more young people are studying business management and commerce in schools and universities today. This school of business and management in Cagayan de Oro is one example. There are at least a hundred others all over the archipelago now.

Not too long ago, business was just the third or fourth option of young people when they went to college. They went for the professions or the liberal arts. They planned their lives for employment in big firms and the government.

Today, because of the expanded horizons provided by globalization and the Internet, more and more people are going into business on their own. More are coming up with their own new ideas.

Today, there are also those who are going back to the land and to the sea. They are going into agriculture, agri-business and sea-farming. They are embarking on the paths that have led to the development of other societies.

A strong business culture does not thrive in a vacuum.

It requires a good business environment – where taking risks and managing well are richly rewarded, where innovation is prized, and where the supports for entrepreneurship are present.

Such a business environment would have a financial system that provides the entrepreneur access to capital. For a young entrepreneur, access is bound to be difficult. Venture capital, more likely than not, will mainly go to the more seasoned entrepreneurs in our country. But it’s time for financial institutions to look your way also.

Government can also provide assistance in this regard – through its financial institutions. So long as you can meet the requirements – a good business vision and a sound business plan, among others – there should be no reason why the projects of young entrepreneurs cannot also merit support.

Backing Local Initiatives

As a member of Congress, I would strongly encourage a government program along this line of supporting young entrepreneurs. In the same way that we have a program to encourage small and medium enterprise, we should have a policy to encourage and back the efforts of young entrepreneurs. We should nurture the natural link between the school and the world of business.

As a former governor, however, I also know that business success does not spring from a law drafted in Manila; it sprouts from the ground up – at local level.

Every strong company begins from its doing business in a particular location – and then serving customers there. SM began its empire from a small retail store in Avenida.

What is a good and promising about our country today is that Government is no longer centralized in Manila. Local governments have a lot of clout in determining their own future. And as such they can also do their thing in encouraging and supporting private enterprise within their communities.

The impressive success of Cebu in powering its own development is a vivid example of local success. The same is true of the growth of Cagayan de Oro and Davao here in Mindanao.

I think it is critical for the advancement of all our provinces, cities and towns that local government exercise more initiatives in building up local business and entrepreneurship.

In Ilocos Norte, we made a good start in fostering economic expansion by helping local people engage in agriculture, tourism, food processing, and other livelihoods. As we opened our province to tourism, we were able to encourage enterprises that catered to their needs. As we strengthened agriculture, and especially food crops, we were able to build up our food processing industry.

In a period of crisis and uncertainty such as we are experiencing today, government leaders and entrepreneurs must be imaginative and opportunistic.

Traditional businessmen tend to follow the established way of doing things. The products they produce are usually those that have already been proven. They build their businesses following the tried and tested. And so in a situation like we have now, they will assume that they should not invest because these are hard times.

I think that is myopic. A real entrepreneur does not stop trying to find a way to do business. Wherever you can create a customer, you have a potential to do business. That, I was taught in my MBA program, is the heart of enterprise. For “the purpose of business is to create customers.”

I deeply believe that with the spirit of service to consumers and society, and with some encouragement and support from government and financial institutions, enterprises can rise and flourish throughout our country.

Let us not forget that we are not a small country. We are the 12th largest country in the world in terms of population. And one of the most blessed in terms of resources.

In the past, having a large population used to be regarded as an albatross around our neck. Every little growth we recorded was promptly wiped out by the new mouths we had to feed.

But the situation is different now. We have reached the point where our large working-age population is a tremendous asset for our development. We see it already in the great contribution of our OFWs to the nation, and in the rise of the BPO industry to number two in the world.

We see the dynamic of the demographic dividend at work in China today with its 1.2 billion people, and in India with its 1 billion people. They are the most progessive nations in the world today.

I believe that the Philippines -- with its 94 million people, with the right policies in the economy, and the right leadership at national and local level -- has the singular opportunity in this new decade to attain economic development and national modernization.

In this great drama of development, Mindanao has a major role to play by reason of its tremendous resources, its people and its other blessings. And you, the young entrepreneurs of Mindanao, will be at the forefront of this transformation.

Thank you for having me here today. God bless.