ARE YOU SURE YOU WANT TO BECOME A BUSINESSMAN? OR IS IT POWER THAT FASCINATES YOU?

I read and I see many posts, efforts, initiatives for development of entrepreneurship in Cyprus mainly through innovation.

Regarding Innovation, I have no doubt about the necessity in our economy and not only. As Cypriot Economy we have remained at obsolete, watertight practices. It’s about Entrepreneurship that I am concerned.

Last year I attended a conference where one of the presenters was Paul A.L. Evans, a professor at INSEAD, France. He presented among other things the results of a global survey for the measurement of talent. The survey showed that Cyprus with regards to the Entrepreneurship Index was at the top while at the index regarding Management was at the bottom. Humorously, he linked the two by saying that in Cyprus we all want to become entrepreneurs in order to run our own businesses. It is for this that the Cypriot enterprises are Under Managed.

In 20 years of my experience as a Business Consultant in Cyprus and abroad, I have diagnosed fundamental flaws in the Cyprus economy which are somehow linked among them.

1. We continue to invest our resources, including our energy in saturated and aging sectors (construction, tourism, finance, retail trade) in a manner that does not increase the added value and based on fundamentally flawed models. For decades, in tourism we sell sun and sea in an effort to compete with much cheaper destinations with more sea and more sun. In finance, we are buying money at a very high price and selling them at even higher. Construction builds properties with low technology and sells them at Monaco prices. And in retail we have become a bad copy of the Italians, French, and Spanish creating an infrastructure for 5 million consumers in Cyprus of barely one million. The results today speak for themselves.

I do not support in any way that these areas should be abandoned but to be differentiated and re-engineered on different business models; also to redirect resources into products and services with greater added value. This is where innovation comes in.

2. Cyprus has grown over the years in dichotomies instead of joining forces and synergizing. It is for this reason that we did not manage to create competitive businesses beyond our borders. Instead of companies joining forces, they break up into smaller ones. This is the main reason that destroyed the manufacturing industry rather than increased labor costs as we say it is. Small businesses have no, or very limited opportunity for professional management, research and development, marketing, since no economies of scales are created.
3. The education system is defective. There is a large gap between the needs of the private sector, educational institutions and the State in terms of targeting. Of course this is largely a global problem. A recent Accenture study showed that in the world there are 85 million unemployed people and employers are having difficulty in finding skilled staff to meet their needs. How is this linked to the title / subject of the article? We have many Managers (and in high positions) not only in the private sector but more broadly to all sectors of our economy, who do not have sufficient Managing or Leadership skills. The reason is simple. People are usually promoted in Managerial positions on the basis of being either technically skilled (a good Mechanical promoted to Manager of Technical Services, a good accountant to Finance Director, a good doctor in the post of Director of Clinical etc etc), members of the family who owns the Business, or through ”connections”.

Management is a separate profession/science. Unfortunately, you do not acquire skills due to the above. Furthermore, continuous education is vital to keep abreast of developments in a highly volatile and dynamic market.

In Cyprus we see that the higher someone climbs the Management ladder the less education think he/she needs. This is paradox!

In conclusion , yes to Entrepreneurship but on a sound basis and not as a springboard to hierarchy especially if you are not capable , and Yes to Innovation starting first from the radical re-engineering of the existing pillars of the economy.

Yiannakis Mouzouris

B.Sc. Mech. Eng., M.Sc. Mgt

Business Consultant / Trainer