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Mexico: Failure of businesses doing good drives Mexico to bottom of global poll

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Oscar Lopez. 22:10:2019

– When Mexican entrepreneur Alvaro Velasco came up with the idea of a digital app that provided earthquake warnings he was convinced he had the ideal business that could be a commercial success while helping society. 

But door after door slammed as he tried to get money and legal assistance from both the government and the private sector to set up his social enterprise, SkyAlert – and he was not alone in this challenge. 

Mexico was listed on Tuesday as the worst country for social entrepreneurs out of the world’s 45 biggest economies in the second global poll of experts by the Thomson Reuters Foundation. It fell 15 places from the inaugural survey three years ago. 

Argentina, Brazil, Colombia and Venezuela were the other Latin American countries in the poll, coming 26th, 38th, 39th and 40th respectively in the ranking of 43 nations. Iran and Saudi Arabia were dropped due to difficulties polling there. 

“In Mexico City, there’s been a brutal slowdown in the atmosphere for entrepreneurship,” said Velasco. 

“With few resources, with zero possibility of accessing public funds … and always fighting local and federal governments that don’t want you to operate, it becomes mission impossible, and that’s what we have to fight against in Mexico.” 

The poll of about 900 social enterprise experts, conducted with Deutsche Bank, found Mexico saw the biggest slump of any country when respondents were asked if social entrepreneurship was gaining momentum there. It dropped 32 places to number 40. 

Mexico was one of the worst two countries when it came to public understanding the work of social entrepreneurs, leaving them struggling to sell to the public, and also in the bottom two countries when it came to support from government policy. 

The findings echoed a 2017 study from the Failure Institute, a nonprofit organization that investigates why various endeavours fail, that found more than 80% of Mexican social enterprises had a life expectancy of less than three years. 

The biggest causes of failure, the study found, were a lack of resources and infrastructure and public and private resistance to investing in social enterprises. 

LACK OF UNDERSTANDING 

“There’s only a small minority of people who see social entrepreneurship as a significant or important value proposition,” said Alejandro Morales Garcia, from the Eugenio Garza Laguera Entrepreneurship Institute at Mexico’s Tecnologico de Monterrey university. 

“It’s difficult for projects to flourish or be born or to continue to develop if we keep thinking in this same way.” 

The country of about 130 million people fared badly in most of 12 indicators used to measure political economic, regulatory and cultural factors impacting social entrepreneurs. Topping the poll were Canada, Australia and France. 

Mexico also came third last when looking at where women were playing a leading role as social entrepreneurs, rating just above Brazil and the United States. 

Marcela Torres, founder of startup Hola Code, said Mexican machismo was a constant battle for women in social enterprise. 

When she was first launching her company, which teaches young deportees in Mexico how to code, she said investors would often only address her male co-founder. 

By: Thomson Reuters Foundation

Source: Reuters

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