Colmena66 tracks progress of entrepreneurship as an economic development strategy
By The Star Staff
Colmena66, a program of the Puerto Rico Science, Technology and Research Trust, recently presented the results of the report “The State of the Business Community in Puerto Rico,” which uses quantitative and qualitative data to inform what entrepreneurs undertake as they continue to recover from the impact of the COVID-19 pandemic and face new challenges such as inflation.
For the study, Colmena66 assembled various sectors of the business community in order to investigate gaps in the ecosystem so that they in turn have tools to design business support programs, write and justify proposals for competitive funds, and create public policy to promote entrepreneurship effectively, design workforce development curricula, and deploy its limited resources equitably and with agility to the sectors that need it most.
Through information captured in each counseling session and an annual survey of the 3,072 entrepreneurs served during 2021 and the more than 250 organizations and business support programs, Colmena66 answers questions such as: who are the entrepreneurs in Puerto Rico? What type of businesses do we have in Puerto Rico? What impact do these businesses have in Puerto Rico? And what do we have to work on as an ecosystem?
“At Colmena66, we work at the intersection between economic and community development. We believe entrepreneurs thrive when the supportive community facilitates an agile flow of talent, information, and resources that help them quickly find what they need at every stage of their business development journey,” said Denisse Rodríguez Colón, executive director of Colmena66. “Equitable and inclusive economic development focused on entrepreneurship is the best tool to create jobs, generate generational wealth and improve the quality of life for the entire population.”
Among the most notable findings, fewer applications were received from people seeking entrepreneurial assistance for new businesses in 2021 relative to 2020, when overwhelming job losses motivated an unprecedented number of people to develop their business idea. However, relative to 2020, in 2021, the number of referrals to resources from the Colmena66 Business Support Network increased by 10%, and 19% of the established companies returned to Colmena66 to receive additional support, thus reflecting progress in the development of those new businesses that were born in the pandemic.
As for motivations to start a business, in 2021, the two main ones were “being my own boss, being independent or having control of my future” and “following a passion”; while in 2020 they were “I have many ideas” and “financial need”. Only 5% of people surveyed in 2021 chose “take advantage of a business opportunity that I identified” as their primary motivation. This type of entrepreneurship is the one that tends to grow faster, creates more jobs, and develops essential innovations in the market.
In comparing needs, there was a 15% increase in seeking assistance for the commercialization of innovative technologies. This can be attributed in part to the “Acércate al Grant” initiative, through which 14 selected projects were supported in writing proposals for the Small Business Innovation Research (SBIR) program of the U.S. Small Business Administration (SBA) with technical assistance. In addition, there was an increase from 3% to 10% in 2021 in seeking aid for regulatory compliance.
When asked about the export issue, 66% of those surveyed said they sell their products and services exclusively to the Puerto Rican market, but 23% plan to start trading in the U.S. market next year. However, when asked about the subjects in which they have gained extensive knowledge, only 13% of the respondents indicated knowing about incentives for export.
The vast majority of the responding entrepreneurs (83%) have an optimistic view of their company despite the fact that 44% of them indicate that their business is facing challenges. On the other hand, 10% worry that their business will fail, and 7% do not know if they will be able to keep the business open. When asked about the challenges for the development of the business, 38% indicated the lack of access to capital.
Four in five respondents used their savings to finance their businesses. In contrast, non-recurring financing options such as the SBA’s “Payroll Protection Program” and personal stimulus checks were used by 17% of respondents. Meanwhile, only 6% of those surveyed financed their business with loans from traditional banks.
The study concluded with the importance of accessibility of resources to support communities underrepresented in entrepreneurship such as the Afro-Caribbean community, the population with functional diversity, the LGBTTIQ+ community, veterans and women.
Among the recommendations outlined were that equitable and inclusive economic development strategies focused on entrepreneurship be promoted collectively. Those are: profoundly understanding the business ecosystem to define standard metrics, monitoring efforts, and disseminating data that facilitate decision making; reducing barriers to entrepreneurship, which includes increasing access to capital and business education; streamlining the permitting process and regulatory and tax compliance; and promoting strong company culture.
For more information about the business support network, contact Colmena66 on all social networks, call (787) 525-4111, or write to: info@colmena66.com.