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Lyonchhen Tshering Tobgay addresses the GNH for Business conference yesterday
Lyonchhen Tshering Tobgay addresses the GNH for Business conference yesterday

Culture influences entrepreneurship, finds study

Bhutan has to rethink entrepreneurship through the lens of culture to foster sustainable entrepreneurship and Gross National Happiness, according to a Canadian researcher.

Kent Schroeder is the director of International Development Projects at Humber College, Toronto in Canada. He has been researching on Bhutan since 2008 and was one of the speakers at the on-going International Conference on GNH of Business that began in Thimphu yesterday.

His research argues in contrast to the thinking that characteristics of some non-Western cultures have been the barriers to an entrepreneurial culture that drives economic growth.

The Small, Cottage, and Medium industry policy identifies developing an entrepreneurial culture as one of its key objectives.

According to him, entrepreneurship is generally understood as establishment of new businesses that focuses on economic growth and creates jobs. It is viewed as key strategy for economic growth, helps competitions, capitalizes profit and boosts employment.

“But not surprisingly, the level of entrepreneurship ideas and entrepreneur motivation is different across countries,” he said.

He said that there are many researches that try to explain why there are differences in entrepreneur activities and one variable that is frequent in the research is the country’s culture or the national culture.

The idea, he said, is that cultural values in a country influence positively or negatively the degree of entrepreneurship activities and the degree of entreprenual motivations.

The role of culture in how people understand the concept of entrepreneurship itself is critical to understanding sustainable business or GNH in businesses, the researcher said.

His research looked at how Indonesian and Bhutanese entrepreneurs understand entrepreneurship based on their own culture and cultural beliefs.

The study used six dimensions of national culture that influence entrepreneurship: power distance, which is the degree to which people in a society accept hierarchy and unequal distributions of power as normal; individualism versus collectivism, which is the degree to which people in a society prefer a framework of loosely knit individuals versus a tightly knit collective; and masculinity versus femininity – the degree to which people are motivated by achievement, competition and quantity versus cooperation, caring and quality.

Uncertainty avoidance is the degree to which people are comfortable with uncertain or ambiguous situations, but there were no data for the other two dimensions.

To look at its implications, the research looked at two countries, Bhutan and Indonesia interviewing 81 respondents or entrepreneurs in both countries.

For Bhutan, it showed very high power distance, individualism is medium, and masculinity is low, all of which according to the dimensions reflected as bad for entrepreneurship. “Bhutan scored low in uncertainty avoidance which was good because low uncertainty avoidance, according to research is what promotes entrepreneurship,” he said.

“If we look at it, just like Indonesia, the aspects of Bhutanese culture looks like a potential brake on promoting entrepreneurship as an economic strategy,” Kent Schroeder said. “But a more positive picture comes up again when it is reframed in Bhutanese entrepreneurship landscape and how Bhutanese entrepreneurs themselves conceptualise their businesses, it moves beyond their economic growth.”

In the interviews, Bhutanese respondents defined entrepreneurship based on their interdependence and talked about how it is rooted in their values like harmony, which is a GNH factor.

“While national culture of both countries seem to hinder the growth of entrepreneurship, a positive picture emerges from the entrepreneurs themselves,” he said.

“Culture becomes a basis on which to develop private sector. So, government should formulate policies with emphasis on national culture and the development of sustainable entrepreneurship at its heart.”

Tshering Palden

Additional reporting by Karma

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