business world in Guatemala is having a database of people and networking skills. Due to the strict hierarchical system, it can become difficult trying to do something through the normal path, which tends to be full of red tape and bureaucracy.
ENTREPENEURSHIP: |
POTENTIAL |
AND |
CHALLENGES |
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In 2011, Guatemala managed to be at no. 7 in the Global Entrepreneurship Monitor( GEM) among 54 countries that were evaluated. This definitely shows the great entrepreneurial potential this Latin American country has despite all the issues and situations that hinder its development. The GEM catalogued Guatemala as a factor-driven economy, which means that its economic development is driven by the development of infrastructure, institutions, macroeconomic stability, health and primary education( Kelley, Slavica, and Mike, page 27). They are majorly consumer oriented, and they show a good perception towards entrepreneurial opportunities.
% of Companies registered in Guatemala
Number of Companies
95 % 175,566
5 %
Number of Workers
Microcompanies 1-9 workers 5,816 10- 19 workers 3,086 20-49 workers 811 50- 99 workers 604
More than 100 workers
Another study made by the Economics Faculty of the University Francisco Marroquín( UFM) in which they evaluated 2,398 entrepreneurs in Guatemala, presented the following findings:
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29 % of those interviewed had a business idea in mind. 19.31 % opened a new business that year( 2011). 3.8 % have had a business for three years and a half( TEA – Early Entrepreneurship Rate). 29.21 % of adults have the potential to become entrepreneurs. 55 % of entrepreneurs are between 18 and 34 years old, and 22 % have between 35 and 44 years old 31 % of entrepreneurs have not been to high school, and 52.9 % do not have a college degree.
� 2.54 % of entrepreneurs close their businesses after three years and a half.
Challenges
There are some challenges for entrepreneurs in Guatemala, some of the most critical ones are:
1. Lack of Resources
The World Bank noted that“ Guatemala has a poor performance in regards to innovation in areas such as: number of patents, number of scientific publications, investigation and development expenses "( Centro de Investigaciones, page 24). This is understandable considering the country’ s economic situation, as well as the fact that institutions created with the purpose funding business initiatives lack the mandates, capacity and resources to promote innovation in the country.
2. Criminality
Since the majority of businesses are small and medium companies with few employees, whatever happens to the owners will have a direct implication on the success of the business. Extortions and robberies are some of the crimes that commonly affect businesses and their
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