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Endeavor Brazil, with support from Bain & Company, published an Entrepreneurial City Index of Brazilian capitals in an attempt to understand the country’s entrepreneurial ecosystem, as well as draft local policies to encourage high-impact entrepreneurship. The results will serve as an assessment tool for public managers and support organizations interested in economic impact in the cities, and for entrepreneurs to make more informed decisions when choosing where to start their businesses.
The creation of a positive environment for entrepreneurial activity is a concern for countries with a range of economic development; entrepreneurs play a significant role in such productivity and are agents of generating wealth. Policies aimed at generating entrepreneurship, thus, are important to a country’s economic well being.
Starting a new business in Brazil requires a huge amount of effort. Entrepreneurs face daunting obstacles daily, be it finding new customers, managing budgets, or simply building a qualified team. Endeavor developed a unique framework for assessing the business environment in Brazil’s regions. To build this framework a set of economic, institutional and social indicators from all 14 cities were organized and collected.
The study’s framework focuses on seven determinants that form the ranking themes. These include: Regulatory Environment, Infrastructure, Market Conditions, Access to Capital, Innovation, Human Capital, and Culture.
– Regulatory environment deals with permits, inspections, and labor laws, particularly on the length of proceedings and the cost of taxes measured by the effective taxation of small and medium ventures.
– Infrastructure focuses on two main groups: long distance transportation and urban conditions. Sao Paolo took first place in Market Conditions, the next determinant.
– Market Conditions concern economic development and potential clients.
– Access to Capital is another very important determinant for an entrepreneurial city. The two main categories for determining access to capital are available capital via debt and access to venture capital. For a new company, it is often difficult to think about investing in the future when the present is uncertain, so access to investors and venture capitalists can make or break a start-up.
– Innovation focuses on investment intensity and generating innovation potential.
– Human Capital deals with the availability of skilled and basic labor.
– Culture plays a large role in the success of entrepreneurial ventures in Brazil. A society’s vision of and attitude towards entrepreneurship is a noteworthy factor in whether or not entrepreneurs will be successful in a determined city.
After a thorough analysis of the results, Florianópolis, an island region in the South East of the country, came in first place. Thirty years ago the city could not have imagined its current success, but hard work and the alignment between economy, government and society, made this island a hub for entrepreneurial growth. This data will allow regional governments to better understand their position in the entrepreneurial spectrum, and allow them to grow and develop into their own successful entrepreneurial sites.
Read the report below and download it by clicking here.
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