Entrepreneurship is a much sought after idea of our current world. It passionately promoted by all Governments in emerging economies and elsewhere on the planet with special funds plans and proposals. But where and when does entrepreneurship really matters, especially in emerging economies. How come it has the power to revolutionise an entire economy like in China. Institutional voids are the real loopholes that people with entrepreneurial intent should really focus on. There are number of institutional voids in health, transportation, training and Institutional voids are the key to understanding how individual agency and innovation can combat systemic problems and enrich the public good in domains as diverse as healthcare, education, or technological innovation. The emergence of Alibaba, an e-commerce giant has reshaped the rural China. The emergence of Taobao villages, where small retailers are linked to a global marketplace via the e-commerce giant Alibaba, exemplifies how innovative and complex systems of entrepreneurship can emerge in the most unexpected places.
In this article, I will briefly touch upon the institutional voids that could be targeted to fulfil an emerging economy and her various needs and also some key elements of successful entrepreneurship in emerging economies. The role to be played by different forces in a nation to combat corruption, poorly skilled labour force especially in healthcare sector etc will be briefly discussed.
Institutional voids could range from an ice pack to lack of transportation for victims of an accident. So people suffer due to the absence of something that could’ve saved a so much of time and money. So in emerging economies like in India, this is a common scene even now. So entrepreneurship can fill in these voids effectively.
Institutional development is a complex process, dependent upon specific factors related to the historical, social, and cultural forces shaping the country or region in question. The most important factor in a market economy is the ability of buyers and sellers to find one another and complete transactions as seamlessly as possible. Institutional voids are the gaps that exist in specific markets that serve as roadblocks to the ideal interactions and transactions of buyers and sellers. Institutional voids come in a variety of forms: absent or unreliable sources of information related to the market as a whole, uncertain regulatory or intellectual property regimes, and inefficient judicial apparatus are just some possible examples. Although institutional voids are palpable impediments to effective transactions and the proliferation of beneficial services (such as reliable healthcare), they are also opportunities for entrepreneurial interventions. Particularly regarding healthcare, the assurance of a good doctor or proper medicines is quite reliable in developed countries like the United States. But in developing countries, there is no way to get this assurance. A Red Cross sign in front of a hospital is largely sufficient especially in many South Asian countries.
Institutional voids are gaps, inefficiencies, or dysfunctional rudiments within markets that prevent potential buyers and sellers from making a transaction. When extrapolated to the healthcare and health services landscapes, these institutional voids can be a matter of life and death. In any marketplace, identifying institutional voids is the first step toward effective entrepreneurial intervention. When it comes to entrepreneurship in healthcare, these interventions can also be considerable drivers toward the public good and positively alter the health landscape of a society.
As a patient we are bound to be sceptical about the quality of medicines, drugs, about the credibility of the sanctity of transactions. How do I know that these medicines are not adulterated? We know from global intellectual property estimates that piracy and drugs are rampant. In developed nations, the laws and penalty for adulterating drugs are so severe and adjudication mechanisms are available for the patient in case he/she has a dispute. But these are missing in a developing economy to quite a good extent. So the patient needs a reassurance about medical care that he receives. These are institutional voids present in many countries today.
Institutional voids are a site for entrepreneurial opportunity in emerging economies. Once entrepreneurs identified certain institutional voids, what can they do to address it? How do they bring buyers and sellers together?
Standardisation of training is another important aspect to look into here, especially with regard to medical personal. There is no certainty that the doctor or the nurse is adequately trained or certified to do this job from a responsible authority. Especially in a country like India, such lapses are very evident and significant to take into consideration. How to provide this training to the healthcare workers? The quality in question here is that of the minimally trained healthcare workers. So a more reliable certifying quality is required to make sure that good healthcare is delivered. The two important examples in this regard are National Skill Development Cooperation and Aspiring minds.
NSDC is a public-private partnership to fulfil a growing need in India for skilled workers across sectors. It provides funding to build scalable, for-profit vocational training initiatives and support systems such as quality assurance, information systems and training academies. A goal of the organization is to improve skills and provide continuing education for 500 million Indian people by 2022.Aspiring Minds is a for-profit social enterprise, which uses scientific and credible approaches for measuring talent and then matching skill sets with workforce or educational opportunities.
Combating corruption is an important example of how entrepreneurial solutions can tackle systemic institutional inadequacies. Corruption is one of the main issues faced by emerging economies. The example of corruption emphasizes how entrepreneurs, even individuals, can make progress in combating even the most severe problems. Transformation is possible even for an issue as big, difficult, and complex as corruption.
In the healthcare system too, corruption is a major problem which includes adulterating the medicines that medicines that you get is mixed in with some fakes but appears in packages that’s as good as that’s used with genuine meds. This is probably done by some so called quack, masquerading as a doctor, someone who doesn’t hold a professional degree. People could misrepresent treatment, they could overcharge it. There is no well-developed insurance sector to alert people that certain medicines are in fact free.
There are a couple of entrepreneurs in Bangalore, at a company called Janaagraha, which is initially a non profit dedicated to citizen empowerment that has pioneering methods of getting information from citizens through phone call alerts, text messages so that people can begin to see where the problem is. But those initiatives were only partially successful because some complaints were not genuine.
Mo Ibrahim, an African communications billionaire, created the Mo Ibrahim Foundation to encourage better governance in Africa. In 2007, he initiated the Mo Ibrahim Prize for Achievement in African Leadership, to award a prize of $5 million and an annual sum of $200,000 (for life) to African leaders who prioritize the security, health, education, and economic development of their people and who democratically relinquish power to their successors. To date he has given only 3 prizes, in 2007 (Joaquim Chissano of Mozambique), 2008 (Festus Mogae of Botswana), and 2011 (Pedro Pires of Cape Verde). What accounts for the inability to find worthy prize winners the other years? It is possible that this seeminly large sum of prize money is small in comparison to the money to be gained through corrupt practices and methods.
Institutional voids are impediments to a thriving market economy and cannot simply be mandated away. It takes a substantial amount of work, expertise, and time for gaps in infrastructure and intermediaries to be eliminated.
Spotting institutional voids thus provides a crucial jumping off point for assessing business opportunities, market conditions, and risk. But how does one begin to recognize institutional voids?
Activity in any economy is driven by three primary markets: product , labour, and capital. Institutional voids can be found in any or all of these markets in developing countries.
1. Khanna, Tarun. (2007). Billions of Entrepreneurs: How China and India Are Reshaping Their Futures—and Yours. Harvard Business School Publishing (Boston, MA)
1.Global Health Innovation Guidebook, courtesy of Stanford University (2013)