An analysis of the legal framework for entrepreneurs in Panama
Did you know that 20% of the Panamanian population are entrepreneurs? Our country, with almost 4 million residents and a dynamic market with large companies, concentrates its largest number of entrepreneurs in Panama City and Colon, according to a study performed in 2015 by the Global Entrepreneurship Monitor (GEM).
The term entrepreneur may be defined as: that individual who starts the operation of a business with little capital liquidity and assuming the commercial and economic risks that this entails, with the purpose of growing his company at the highest possible yield. Entrepreneurship is that activity that seeks to innovate in the market with some new and attractive product to the clients.
This global movement grows strongly and brings multiple economic and social benefits for countries. Nevertheless, despite the high volume of entrepreneurship in Latin America, we still face a challenge as a region: to foster a proper ecosystem so that each time we may create increased value in innovation and sustained growth. Panama supports entrepreneurship, and in this context, adjustments have been made to establish a legal framework, which gives support to entrepreneurs. If you are an entrepreneur and are interested in knowing more about these initiatives and how they can work for you, please let us know and we would be happy to guide you.
Although the local initiatives promote entrepreneurship in the country, as mentioned earlier we still face significant challenges in order to promote local entrepreneurship projects and make them even more valuable in the long term. We need to provide entrepreneurs with the necessary skills, abilities and tools, which will allow them to develop businesses that add value. We also have a great opportunity in developing education models that will strengthen our entrepreneurship ecosystem and will make it more efficient, strong and attractive.
Countries such as Colombia and Mexico have programs affiliated to the authorities that provide education plans and guide to entrepreneurship. These programs are connected to schools and universities in the country to provide support and tools to entrepreneurs.
In Panama, there is the Panama Business Accelerator (PBA) located at the Innovation Center of the City of Knowledge. Expert businesspersons and young entrepreneurs lead said program. It seeks to expand the entrepreneur´s vision fostering innovation through exchange of ideas, collaboration and creativity. There, “focus groups” are carried out, where the entrepreneurs meet for collecting ideas about any specific project or regarding any problem they wish to solve. They also provide workshops on different topics focused in entrepreneurship and, additionally, the Emprende Contest is carried out which seeks to reward the best innovative projects.
- To keep advancing in the subject, Panama must work in designing an entrepreneurship education plan. Besides AMPYME´s proposals, universities and high schools must be visited in order to educate students and motivate them to become entrepreneurs.
- Finally, it would be convenient to reinforce AMPYME´s law and work on the development of a law that creates the Entrepreneurship Authority for strengthening aspects and obligations such as entrepreneurs’ education. In order to keep transparency, the annual statistics on how these initiatives have impacted Panama´s society by supporting entrepreneurship and how more entrepreneurs have emerged in the country must be published.
In summary, an appropriate legal basis, which evolves in favor of education models adapted to the entrepreneurship reality, is an important factor in order to guide entrepreneurs’ local efforts increasingly towards an added value model. This is essential in order for entities to continue boosting this engine of our economy and its positive force on our society.
By: Adolfo González Ruiz A., Associate Attorney.