Entrepreneurship in Panama: An uphill struggle

The Panamanian entrepreneur is “getting younger”, has more academic studies, a higher socioeconomic level, and has begun to awaken entrepreneurship in the center of the country, according to the most recent Global Entrepreneurship Study (GEM), which Babson College and London Business School prepare every year.

It indicates that 28 out of every 100 Panamanians of productive age consider it opportune to become entrepreneurs or have less than 3.5 years of experience in entrepreneurship.

According to the National Authority of Micro and Small Enterprises (Ampyme), citing the GEM, which through an annual measurement identifies factors that, at an institutional, cultural, regulatory, and public policy level, determine the level of entrepreneurial activity, entrepreneurship in the country is more prevalent in the commerce sector (49%) and services (37%), but less so in manufacturing.

An entrepreneur in Panama today could be defined as a person between 25 and 44 years of age, with a medium academic education, of medium socioeconomic level, who resides in the province of Panama and is dedicated to independent commerce in the vast majority of cases.

Boris Wainberg, the creator of the Panama Entrepreneurs community, said it was born in 2015, seeing a need for guidance and support for people looking to start new businesses.

“There was a need for more content and delivery of tools that entrepreneurs needed, practical workshops, and a sense of belonging knowing that they are on the same difficult path that we all find ourselves, especially at the beginning.

“The issue of what we call ‘mentors’ in entrepreneurship did not exist at that time in Panama,” he said.

He explained that when talking about startups as rapidly scalable businesses, supported mainly by technology, Panama is just beginning, even though he clarified that the difference in recent years is notorious, as high-level startups that have received national and foreign investment have started to emerge organically.

These are businesses mainly in the Fintech area in high demand worldwide.

He added that these efforts must be promoted and highlighted at the national level to achieve more interest in this type of entrepreneurship by the general population, thus expanding the entrance of this sector’s funnel.

Wainberg reminded that the national market is small in size, so entrepreneurs should always look for solutions that apply at least at a regional level, even though he recognizes that this “export” of the product or service is not easy and requires a considerable investment, especially if you want to do it quickly.

In the database of the community of Panama Entrepreneurs or Panama Startups, there are 25,000 registered and in social networks more than 80,000 followers or contacts, and not being exclusive, they have entrepreneurs and micro and small businesses from all sectors, independent professions, tourism, trade, orange culture, fashion, fintech, blockchain, and the agricultural sector.

Regarding how they differ from the rest of the entrepreneurial community, Wainberg detailed that “we are the first to enter with the concept of community, where we receive entrepreneurs or people who want to develop businesses without any requirements, without excluding anyone, with a social entrepreneurship format (it is a business, which at the same time addresses a social problem) we are self-sustaining without financial support from any institution, In these seven years that we have been operating many community attempts have appeared and disappeared, but their sustainability model has not survived over time”.

He indicated that they are consolidating their digital presence to offer their services regionally in the medium term, and at the same time, they are grouping all the organizations of the National Entrepreneurship Ecosystem to start pulling the cart in the same direction in a coordinated way and achieve results for the national entrepreneur. “We expect great news for 2023″, he said in an optimistic tone.

In the GEM 2019/2020 study, it is observed that in Panama, there is a higher trend of entrepreneurship between 25 and 44 years of age, where 51% of the entrepreneurial population is located, and when analyzing comparatively concerning the previous year highlights a proportional reduction of entrepreneurs aged between 55 and 64 years of age.

For the creator of the community of Entrepreneurs of Panama, the biggest obstacle for the entrepreneur continues to be a cultural issue, fear of entrepreneurship, and the preference for job stability in traditional companies.

He recognizes that there are also obstacles to access to financing, especially in terms of venture capital, even though he maintains that there are much more fundamental issues, “such as the lack of innovation, which we must first overcome”.

With information from Bloomberg