A look at the Chilean model in supporting the entrepreneurship.

Every year the Chilean government assigns millions of dollars to different seed capital programs in order to support the entrepreneurship. However, access to financing remains one of the main barriers entrepreneurs have to cope with to conduct a business.

Chile is a country with a recognized scheme of institutions and government subsidies to support the development of entrepreneurship in early stages. In the last 12 years, a series of public policies and programs have been promoted and these have formed an ecosystem of entrepreneurship with different actors such as business incubators, accelerators, angel investors and co-work spaces.

Thanks to the State’s economic contribution, these institutions provide technical and financial support for different types of entrepreneurship in order to achieve the development of business of high growth potential and global startups.

In this scenario, with dozens of institutions supporting entrepreneurs, thousands of business benefited and millions of dollars delivered as a subsidy, the question is: why is the lack of support by the state still a recurrent critique between entrepreneurs?

From my point of view, beyond the availability of resources, there are cultural elements of the ecosystem of entrepreneurship in Chile that arise as a result of this active role of state support.

The shortsightedness of the entrepreneur is a condition that currently affects both Chilean entrepreneurs and foreigners who have arrived in the country. This narrow outlook implies that by entering a subsidy scheme, entrepreneurs could set their attention to an institution and specific programs as the only source of funds to move forward with their business ideas. This causes a loss of vision of other opportunities present in the environment and a loss of speed in the development of the business by having to adapt the activities and times of execution to the norms that implies the use of state resources.

Another critical aspect is the dispersal and the difficulty of accessing the information of the available supports among hundreds of different programs. Even if, on the part of the state, efforts have been made to communicate this information properly, in practical terms it has resulted impossible to concentrate the full range of available state support.

As a third element, there is little clarity in the requirements and standards that entrepreneurs must meet to gain access to benefits, this is because part of the subsidies are delivered directly to the enterprise. But the biggest quantity of resources is delivered through state-funded business incubators by the conditions and standards established by the State for the use of subsidies and the particular requirements that each intermediary institution establishes.

Finally, they add to these issues the problems and challenges inherent in public policies such as the asymmetry of information, the dependence of institutions on subsidies, the capture of programs by the people interested and the difficulty in evaluating the impacts generated beyond the number of resources delivered.

By understanding the support of entrepreneurship in the world and especially the great importance acquired in recent years in Latin America within the programs of government, it seems relevant to look at the experience of the Chilean model, rescuing good practices that allow, through the support of entrepreneurship, to generate the desired impact on the creation of businesses that contribute the growth for the countries, development of new markets and more and better jobs, objectives that support the intervention of State in this field.