Some of the world’s biggest businesses started up in sheds and garages – brands like HP, Apple, Google and Samsung.
Many entrepreneurs still sit in ramshackle buildings the world over dreaming of the day they make their breakthrough.
Unfortunately, for every Google, there are thousands of just as feasible business ideas that don’t make it, and The World Bank is having a long, hard look at why the new Steve Jobs is having a tough time breaking through.
The bank’s World Development Report examines what entrepreneurs rich with ideas but poor with cash and resources can do to become the next Apple or Amazon.
Muhammad Yunus, founder of Grameen Bank, a microlender in Bangladesh, believes the poor are “natural entrepreneurs”.
They use their brains and sometimes their brawn to turn what little they have in to marketable resources to support themselves and their families. The problem is they cannot bridge that gulf from self-employment to making their idea in to a corporation.
The report reveals that in the US, a company trading for 35 years becomes 10 times as productive and employs 10 times as many people, while in India, should one last that long, productivity may double but the number of employees falls.
Overall, the report suggests that entrepreneurs have to do more than think big. Big firms employ more people, export more and pay higher wages.
Small firms are small fry for ever – and many are started by ‘reluctant entrepreneurs’ who work for themselves because no one else will employ them.
The bank research found that in seven African countries, return on capital for small businesses is 10 that generated by the 20% of largest firms.
How to improve the market for small businesses and entrepreneurs is the million dollar question.
Governments try loans, grants, training and other incentives, but many businesses find so many strings are attached that the programs never actually reach the people they target to help.
Despite the gloom, the bank did uncover a startling success story. Just over 30 years ago, Bangladesh had no textile industry to speak of. One firm sent 130 workers to South Korea for eight months of learning.
They came back bursting with knowledge and enthusiasm and most set up their own textile firms.
Now, Bangladesh has 3.6 million people working in the textile industry, generating US$13 billion of exports every year.