1 Entrepreneurship in UPPs and a broader look at Brazil Amisha Miller – Endeavor Brazil

2 ENDEAVOR NGO WHICH WORKS TO DEVELOP ECONOMIES BY SUPPORTING HIGH-GROWTH ENTREPRENEURS

3 ENDEAVOR IN BRAZIL Passionate (about what they do) Generate real value (innovation and excellence) Being big (vision, ambition) Going for it (attitude) Being ethical (getting it right, no shortcuts) - Transparency - Management - Good people WHO THEY ARE: + employment + income + innovation + economic growth - inequality HOW THEY DO IT: INCREASE THE NUMBER OF HIGH IMPACT ENTREPRENEURS IN THE COUNTRY

4 WHY HIGH-GROWTH? The high growth businesses in Brazil (about 1.7% of all employer businesses) created over half the jobs in Brazil between 2005 and These businesses had a 173,7% growth rate of employees over 3 years. This compares to the average of 22.2% for overall Brazilian companies in IBGE, Demografia das Empresas, JOBS ECONOMIC GROWTH

5 WHY ARE WE INTERESTED IN COMMUNITIES?  Zica – Beleza Natural  Started experimenting with her own hair and opened the first salon in her house in Rio de Janeiro  Now worth R$ 70 million with over 20 salons  Edivan – SEDI  Started as a young footballer but lost his place when his father got ill and he had to help to support the family  Started as an office boy and juggled middle school at the same time, travelling 24km per day on foot between school, work and home  Now has 90 employees in the business and has contracts with Carrefour and C&A.

6 HIGH-GROWTH ENTREPRENEURSHIP POTENTIAL? Quantity: a)Are people already entrepreneurs? b)Do people intend to open businesses in the future? Quality: a)Do people want to be entrepreneurs or are they forced into it by lack of opportunity? b)Why do they choose to start? TO UNDERSTAND THE QUALITY AND QUANTITY OF ENTREPRENEURSHIP POTENTIAL IN THE UPPS, WE TRIED TO ANSWER A FEW QUESTIONS

7 QUANTITY  Only 4% of people surveyed consider themselves entrepreneurs.  But this is difficult to assess - lack of certainty about what “having a business” means in Brazil.  The 4% is much lower than China’s and the EU’s 9% average rate.  There are a lot of potential entrepreneurs in the UPPs. 29% of all people surveyed think that it’s “very probable” they’ll start a business in the next 5 years = POTENTIAL ENTREPRENEURS  This rate is much higher when compared to other countries’ rates. Even in the USA and China, the rate falls to 16% and 12%, respectively.

8 QUALITY - NECESSITY ENTREPRENEURSHIP?  64.2% of people surveyed say they would like to have their own business.  This rate is higher than Europe (45%), the USA (55%) and most of East Asia. The only country with a higher rate was China (71%).

9 QUALITY - NECESSITY ENTREPRENEURSHIP?  “Personal independence / self-fulfilment / interesting tasks” (58%).  This was the first reason encountered in all the countries studied.  “To earn more money in the future” (56%) which can be seen as either an opportunity or necessity-based reason.  This is much higher than other countries although the choice of money was higher in all countries where salaries were lower (China, South Korea and Eastern Europe ). PEOPLE’S REASONS FOR CHOOSING ENTREPRENEURSHIP FOCUS ON OPPORTUNITIES

10 QUALITY - NECESSITY ENTREPRENEURSHIP?  This is not true in China, where the most important reasons are negative: “lack of resources to start my business” (36%) and “lack of personal experience” (33%). PEOPLE’S REASONS FOR CHOOSING EMPLOYMENT IN UPPS ASLO FOCUS ON OPPORTUNITIES COUNTRY GUARANTEED INCOME STABILITY OF EMPLOYMENT SOCIAL SECURITY / BENEFITS RIGHTS FIXED WORKING HOURS UPPs55% - (1º)42% - (2º)33% - (3º)9% - (4º) USA)14% - (2º)21% - (1º)5% - (4º)7% - (3º) China11% - (5º)15% - (4º)9% - (6º)6% (7º) Average EU40% - (1º)35% - (2º)13% - (4º)16% - (3º) South Korea57% - (2º)61% - (1º)21% - (4º)24% - (3º) Japan24% – (2º)46% – (1º)7% – (6º)11% – (5º)

11 QUALITY - NECESSITY ENTREPRENEURSHIP?  71% fully agree that creativity is important compared to about half of other people.  56% of people agree compared to 20% of people in the World Values Survey as a whole  Success is also more important to potential entrepreneurs than others. (60% compared to 15% average.) POTENTIAL ENTREPRENEURS ARE MORE CREATIVE AND DRIVEN

12 QUALITY - NECESSITY ENTREPRENEURSHIP? THE BIGGEST OBSTACLE IS A LACK OF RESOURCES, FOLLOWED BY LACK OF SKILLS AND OPPORTUNITIES COUNTRYMONEYSKILLSOPPORTUNITIESBUREAUCRACY UPPs34% - (1º)13% - (2º)10% - (3º)5% - (4º) USA14% - (1º)4% - (4º)3% - (5º)2% - (6º) China24% - (2º)17% - (4º)18% - (3º)2% (7º) EU Average30% - (1º)11% - (3º)12% - (4º)5% - (7º) South Korea39% - (1º)28% - (2º)9% - (4º)7% - (5º) Japan23% – (1º)18% – (2º)13% – (3º)4% – (7º)

13 SO WHAT CAN WE DO?  Work on their barriers – microfinance (?) skills and opportunity perception  Keep their dreams alive – don’t make it too ‘easy’

14 FOCUS ON KEY COMMUNITIES TOTAL (%)POTENTIAL ENTREPRENEURS (%) CIDADE DE DEUS 7,810,2 SÃO CARLOS 6,96,2 MACACOS 6,65,1 BATAM 6,68,5 BOREL 6,64,9 SALGUEIRO 6,67,6 DONA MARTA 6,65,9 PROVIDÊNCIA 5,36,8 TABAJARAS/CABRITO 5,35,9 ANDARAÍ 5,24,7 CHAPEU-MANGUEIRA BABILÔNIA 5,26,9