How are we doing, Michael Porter?

Ten years ago, renowned Harvard Business School professor Michael Porter came to Peru to analyze the local competitive environment. His conclusions were shared in a presentation entitled Competitiveness: A New Economic Strategy for Peru. Now is a great time to take a look back and see what progress has been made as it relates to startups.

In the study, Porter outlined some action priorities for improving the local business environment. A key component was to “ecourage entrepreneruship and SME business formation.”

Competitiveness: A New Economic Strategy for Peru, Michael Porter

Ten years later, in 2019, Peru has made progress in capital availability for SMEs, and specifically, tech startups. This week, PECAP, the Pervuian Association of Seed and Venture Capital, reported total investment of $20.6 million in 2019, more than double the previous year. This total was comprised of both local investment and foreign direct investment in Peruvian startups. You can access the report here: PECAP Preliminary Report for 2019

El Capital Emprendedor en Perú, PECAP

One area that remains an opportunity is in cluster development, which Porter mentions as key to building on Peru’s competitive advantages. Startup founders and investors can be catalysts to building clusters in areas where Peru is already strong compared to regional and global peers.

Competitiveness: A New Economic Strategy for Peru, Michael Porter

There is certainly a lot of work left to do to carry out Porter’s recomendations. The growth of private capital directed at SMEs is a important part of the progress made thus far.

Leave a Reply