Author(s): Jeremy Heald, Lari Arthur Viianto
The operation of numerous entrepreneurship programs in Mexico underlines that it has become a major, albeit fragmented, public policy. The article analyses a poverty-alleviationthrough-entrepreneurship program in the State of Guanajuato and asks: Who should entrepreneurship programs support: the poorest or the most prepared among them? With what support packages and for which type of projects? An initial case study evaluation via a questionnaire applied to beneficiaries widened to an analysis of national entrepreneurship policy and a literature survey of international best practice. It found that in allowing self-selection, the program missed its vulnerable target population in marginalized communities and assisted less poor but more educated young adults in towns. However, it got lucky, because although the program only included funding, highly motivated, capable beneficiaries established modestly viable projects at low per-project cost to the authorities. So where public sector departmental resources are scarce and spread across programs and municipalities, such interventions can enable relatively poor but well-educated beneficiaries, in different sectors and stages of start-up, to self-select into a program which includes an initial project design procedure and a monitoring help-line to tackle evolving problems with externally contracted coaches. But if the objective is to support vulnerable beneficiary profiles or technology-based innovations, programs will need to delegate beneficiary selection, training and mentoring to specialized partners at much higher per-project cost. Generalizing from this experience, governments need to make a very conscious initial choice between two approaches for their entrepreneurship programs: 1) The minimalist in-house cash-only program which, via an initial project design process, selects educated, albeit poor beneficiaries to reap quicker, broader but shallower impacts and 2) The resource-intensive, integrated program with external partners, implementing genuine targeting to achieve significant if smaller-scale reductions of extreme poverty or economic development through innovation, depending on the program orientation and objectives.