In recent years, entrepreneurship has become the new buzzword in the business and development communities in Egypt and the region. It is being promoted as one of the solutions to problems of economic development and widespread youth unemployment, and social entrepreneurship is being presented as a solution to pressing developmental issues pertaining to education, healthcare and poverty alleviation.
However, both entrepreneurship and social entrepreneurship are problematic concepts that tend to obscure the deeper constraints impeding economic and social development in Egypt and beyond. Entrepreneurship implies that instead of relying on the government or the private sector to provide employment opportunities, young people should take the initiative and set up their own businesses or start-ups.
The dream of every young man or woman should thus be to become an entrepreneur and to establish his or her own start-up company. With access to the new technologies the ambition for many young people is to develop a form of software or an application that could gain the attention of investors and large corporations, allowing them to cash in on their innovative ventures and ideas.
While this dream might be accessible to bilingual and highly educated young people, it is beyond the reach of the vast majority of young people in Egypt and the region who lack the education and the skills needed to become entrepreneurs. Moreover, access to financing is restricted, and very few start-up companies are able to meet the conditions for financing placed by banks and other financial institutions.
Moreover, while entrepreneurship and start-ups are being celebrated and success stories such as Uber and Careem presented as models of what can be achieved by young people who have relied on their own resources and creativity to create successful companies, in reality the failure rate for start-ups is very high and only a small percentage of new companies are able to survive, let alone grow and thrive.
As a result, entrepreneurship is only a very partial solution to problems of youth unemployment, and it cannot be used to obscure larger problems such as inadequate education and skills, the difficulties of securing financing, and the many legal and bureaucratic obstacles that hinder young people from establishing companies.
Even more ambiguous is the notion of social entrepreneurship, which is being presented as one of the solutions to pressing social problems. Social entrepreneurship similarly emphasises the idea of self-reliance and innovation. It implies that instead of waiting for the state or for charitable organisations to provide solutions, communities should take the initiative and come up with innovative and sustainable (ie profit-oriented) ideas to solve long-standing social problems in the areas of education, healthcare, the environment and so on for themselves.
Initiatives such as Karmsolar, which provides clean energy solutions, or Educateme and Tadamun, which provide educational and vocational training in poor neighbourhoods, or Injaz Egypt and Nahdet Al-Mahrousa, which provide support for young people seeking to establish new business, are celebrated as examples of successful social-entrepreneurship projects.
However, while social entrepreneurship might have led to the establishment of successful initiatives here and there, it is hard to imagine how these limited initiatives can provide solutions on a national level in areas such as education and health care. The problem of poor social services cannot be resolved without targeted public policies and significant budget allocations and large investments on the part of the state and large corporations.
The current celebration of the idea of entrepreneurship must be viewed as part and parcel of the neo-liberal solution to problems of economic and social development. With the emphasis on balancing budgets and cutting public expenditure, public investment and spending on social services often suffer the most. And the burden of economic and social development is shifted away from the state towards private and societal actors.
In the 1990s, international financial institutions promoted a developmental framework in which the state would provide the regulatory framework, the private sector would spearhead the process of economic development, and the civil-society sector would address social and welfare problems. However, the reality proved to be much more complex.
Processes of economic liberalisation and privatisation led to rampant corruption and monopolistic and inequitable economic growth, in turn leading to deepening social and welfare problems. Growing unemployment and a sharp decline in public and social services became endemic and contributed to growing social unrest.
While the civil-society sector did expand significantly in the 1990s and assume a growing role in the areas of social-services provision, this expansion had a steep political cost, with Islamists often stepping in to provide the bulk of these services. As a result, the Islamists were able to translate their growing social influence into political influence, undermining the stability of the former Mubarak regime.
The events of the Arab Spring in Egypt and the ensuing turmoil led to an unprecedented crackdown on the civil-society sector in order to curb the rising social and political influence of the Islamist movement. Moreover, political instability and the deepening economic crisis significantly weakened the ability of the private sector to generate growth and employment.
With the decline of the role of the private sector and civil society, entrepreneurship has emerged as the new buzzword within the development community. In the absence of a developmental state, a growing private sector, or a thriving civil society sector, the burden has been shifted to the individual to come up with solutions to problems of social and economic development — hence, the celebration of the idea of entrepreneurship.
Obviously, this paradigm is inadequate in many ways. While entrepreneurship might be accessible for a narrow elite within the youth sector, it remains out of reach for the majority of Arab young people. Similarly, while social entrepreneurship might help us experiment with new and alternative ideas for resolving long-standing social problems, it is no substitute for sound public policies and substantial budget allocations and investments in essential social services.
By celebrating entrepreneurship and inflating its potential impact, we obscure deeper problems of economic and social development that can only be resolved through sound public policies and substantial public and private investments.
The writer is a senior researcher at Al-Ahram Centre for Political and Strategic Studies.
*This article was first published in Al-Ahram Weekly