In March 2012, the Export-Import Bank of China (China Eximbank) and the Inter-American Development Bank (IDB) announced that an approximately $1 billion investment fund to promote sustainable economic development in Latin America and the Caribbean (LAC) would be operational this year. The joint project will invest in the public and private sectors and focus primarily on infrastructure, projects on energy and natural resources, and small- and medium-sized enterprises (SMEs).
At the root of sustainable development is the notion that economies can still grow without endangering resources and the environment for future generations. However, although discussions about economic resources and the environment dominate the spotlight, the central role of future generations, or youth, in driving that notion and identifying related solutions is often relegated to the background.
Leslie Forman grew up in Silicon Valley, California, as the daughter of two serial startup veterans. She lived in China for several years and worked in diverse industries, such as advertising, consulting, corporate social responsibility and education. In 2011, she moved to Chile to take part in Start-Up Chile—a government-sponsored entrepreneurship program.
Given her unique background, Leslie has a coveted window into many worlds. She recently shared some valuable insights related to her entrepreneurial experiences and vision to connect Chile, China, California and beyond.
Ozobia: What are some overlapping themes in the area of entrepreneurship that come up the most in your cross-regional work?
Forman: Persistence and listening are critical to success in entrepreneurship. Also, the influence of Silicon Valley and its theories come up all the time in Chile in particular. The Government of Chile even has a program called Global Connection through CORFO, its federal economic development agency, which provides a short-term fellowship to applicants to participate in Plug and Play Tech Center in Silicon Valley.
One of the words I never really used before coming to Chile and being involved in so many start-up conversations is “pivot”—the notion to follow a path with complete persistence and then be able to pivot and move in another direction as you learn more about your market, customer base and business in general. It’s a combination of being able to focus and, at the same time, being willing to adjust and be flexible.
Ozobia: It seems that a lot of media coverage related to China-LAC relations tends to be skewed toward China-to-LAC exports of manufactured goods and financial investments, or LAC-to-China exports of natural resources. In Chile’s case, what does it offer China beyond natural resources?
Forman: There’s a Chilean entrepreneur and professor named Ivan Vera that is the “go-to” person on this topic. He owns a number of different companies and helps Chilean food producers sell products like cherries, salmon, wine, and cheese to China. However, he also shares his technical knowledge with people in China and takes groups of young Chilean entrepreneurs to China. He hosts conferences all over Chile and other countries about youth entrepreneurship and is enthusiastic about China and supporting start-ups to do business there. He emphasizes that youth and technology are great areas of collaboration between China and Chile.
There also could be opportunities for collaboration in mining engineering and safety. Chile is very advanced in this area and rich mining companies basically comprise the economic engine of the country. The vast majority of exports to China are comprised of copper.
Another area is renewable energy. Chile is perfect market for Chinese solar panels and wind turbines. It’s really lacking in energy resources—no coal, no oil—so much is imported and it has tons of engineers and one of the world’s hottest deserts. It would be great if Chile could build up expertise in the optimization, maintenance and measurement of these resources given its vast engineering talent.
One final area is design. I have a Chilean friend who is a designer and who worked for several years in China. She does quite a bit of work with companies that want to design their products in Chile and then produce them in China. She knows the factories or at least the people in China that know the factories because she used to work with them and their friends. They help her put together some small orders.
But the vast majority of the China-Chile connection remains in the area of ordering products. Every time I mention my ambition to connect China, Chile and California, I get asked if I can help people order electrical parts or help them stock their boutiques. Trade connections are product-oriented much more than service-oriented. Given the distance between the regions is so far and the language barrier is challenging for all sides, I think at least initially that products make more sense. The issue of trust is also a factor; in both China and Chile, it takes people a fairly long time to get to know you well enough to feel they can really trust you.
Ozobia: What are some of the most common challenges young entrepreneurs face in Chile? What has been the role of the public sector in supporting their work?
Forman: Chile is rather conservative as far as the way most people approach business and their careers, which are pretty tightly defined, although I’ve encountered a lot of enthusiasm among Chileans about innovation.
I met a 24-year-old named Ignacio who decided not to attend college in order to pursue his entrepreneurial vision. He grew up in a small town with no Internet access at home and his project focuses on making the Internet more affordable for low- and middle-income communities through wireless routers in neighborhood supermarkets. It’s great because he’s using neighborhood infrastructure to provide a low-cost service and he’s also very conscious of making sure whatever equipment he uses does not increase the vulnerability of stores to theft.
In Chile, the government has been very supportive and enthusiastic about entrepreneurship. The 18-to-30-year-old demographic is robust here and most people I know are young. I would say that major challenges have more to do with class. Just about every government program (e.g., Start-Up Chile and Capital Semilla) offer grants mostly to those who have money. There are government subsidy programs but applicants have to put down a substantial amount of money before getting reimbursed. As a result, the start-up community tends to be dominated by people from more privileged backgrounds and top universities.
Many people still figure out ways to thrive in the informal sector selling bread, hotdogs or handicrafts—work that may not be as scalable and innovative but is something that is independent and can help them feed their families. There is, however, a big gap between rich and poor in terms of accessibility to entrepreneurial support.
Ozobia: What are some notable mentorship programs for young entrepreneurs in Chile and which models seem to be working?
Forman: Start-Up Chile is a program that could be considered a best practice and replicated elsewhere. Their strategy has been to invite entrepreneurs from all over the world as well as Chile to scale up their business here. There is a controversial element, which involves the issue of giving tax money to foreigners, but overall the impact of program has been good.
Another program that has grown a lot since I arrived in Chile is Acción Emprendedora (AE). It provides training and mentoring to entrepreneurs in poor neighborhoods. What’s great about their program is that they recruit people from privileged backgrounds who have had really good educational opportunities to become tutors and mentors. They give entrepreneurs more tools to succeed while, at the same time, building connections across social classes. I interviewed a woman years ago that designed handmade, wooden toys. Her husband was a carpenter and they lived in a neighborhood where there were a lot of imports of cheaper quality toys from China.
Through AE, she was connected with a mentor who helped her distribute her toys in a high-end toyshop in a fancier neighborhood. This was just the right connection that she needed to be able to charge the necessary prices to allow her to live off making beautiful high end, handmade toys. That sort of program is a best practice. The role of connections is an important one in Chile as well as China. In Chilean Spanish it’s pituto. In China it’s guanxi. In both places, having the right connections is very helpful for getting things done. Any program that helps people build connections outside their typical social circles is very important.
*Nnenna Ozobia is a guest blogger to AQ Online who is currently completing a postgraduate teaching fellowship in rural Hunan province, China, as the recipient of the CJ Huang Fellowship from Stanford University. She has previously worked in various countries throughout the Americas on diverse research and international development projects.