Polarity in Mexican entrepreneurship: how to break it?

65% of entrepreneurship in Mexico is concentrated in three entities: Mexico City, Monterrey and Guadalajara, And most of them are high-impact projects, according to the Association of Entrepreneurs of Mexico (Asem), but why are the most successful entrepreneurs concentrated in the north of the country?

the impulse of public policies, education and a developed entrepreneurship ecosystem are key; however there are social factors such as skin tone and social class.

The study (Dis) Advantages of Entrepreneurship in Mexico, carried out by Impact Hub CMDX and Meta, indicates that the region of origin is a factor that influences entrepreneurship, because living in the north of the country represents an advantage, which increases if the social class of origin is high and if the Entrepreneur skin tone is light.

“These characteristics also increase the probability of having international sales and profits above 35,000 pesos,” said Mario Romero, general director of Impact Hub Mexico City.

However, in the south of the country, entrepreneurs tend to be from lower class, brown skin and public education. Also, businesses tend to be local and low profit.

Entrepreneurship, social growth factor

In this regard, Juana Ramírez, president of Asem, stressed that despite this polarity, the important thing is to be an entrepreneur with a clear purpose, with passion and that you recognize your strengths and weaknesses.

“Entrepreneurs at certain socioeconomic levels are more likely to; With greater access to education, who are the children of entrepreneurs, who have lived in the midst of the culture of entrepreneurship and in their family’s business, they are more likely to undertake and succeed in their businesses,” he specified.

However, when entrepreneurs in circumstances with little probability of success (lower social class) succeed, they generate a mobility for them, their families and for the entire community in which they participate.

“Entrepreneurship is an indicator of social access. In the cities where there is better access to education, health and information, it is where there are usually more enterprises, which boost the economy of that place.”

Therefore, to promote entrepreneurship at the national level it is necessary to think of education as preparation for entrepreneurship and not as a way to work.

Although it is true that there are already universities that are doing it, a greater boost is required in all stages of training from childhood.

Lack of government impetus

Ramírez stressed that the lack of impetus on the part of the government has prevented to potentiate entrepreneurship; however, entrepreneurs have gotten around the problems, especially during the pandemic.

“The wonderful thing about entrepreneurs is that we are countercyclical to crises, to the economy and to public discourse, because we are going to undertake anyway and make things happen.”

Solo 37% of companies in the country have access to financing, but when observed by sectors, a polarity stands out because 65% of agricultural businesses obtain credit, while only 3% of the ventures focused on health obtain it.

“Most bank financing continues to be focused on low-risk companies and entrepreneurs manage risk. There is a pending issue for the banking sector, to develop products that educate entrepreneurs in generating a credit history that allows them to access better funds in the future”.

Ramírez explained that this space is being occupied by fintech companies; However, the interest rates are high, since in general a small company pays interest up to four times for each peso borrowed.

The result of this is that 75% of companies die in the first two years of life and 52% do so due to lack of cash flow. That is, they managed to sell the services and products, but they do not have the financial capacity to pay.

Women and investment

It is necessary to continue working on investment, because mostly women’s businesses are less scalable, although companies led by them break even faster.

Data from the x-ray of the entrepreneur, women’s edition, indicate that 26% of female entrepreneurs fail due to lack of time, that is, while men are taught that their time is to be productive, women are taught that they should dedicate themselves to family care

Even female entrepreneurship, where the culture of care recharges on them, sees their possibilities to grow the business limited.

“If we change the culture of care, in which we are all responsible, then women would have equal conditions,” Ramírez concluded.