Why are Latin American students more likely to become entrepreneurs?

While economic volatility and political change in the region certainly play a role in the drive for entrepreneurship, that is only part of the story.

Instead, it is more of a combination of economic realities, cultural values and personal mindset, says Dr Asghar Afshar Jahanshahi, Professor of Strategy, Entrepreneurship and Innovation at IPADE Business School in Mexico.

Entrepreneurship is deeply rooted in Latin American society. Many students grow up in families that own small or medium-sized businesses or know entrepreneurs within their close social circles.

“As a result, starting a business feels like a realistic and respected career option rather than an exceptional one.”

Family support often provides not only encouragement but also practical advice, networks, and, in some cases, resources while they’re starting out. It makes entrepreneurship a lot more accessible compared to other regions.

The opportunity cost of starting a business may also play a role in the student's decision making, says Jorge Vincio Murillo Rojas, Assistant Professor of Entrepreneurship at INCAE Business School in Costa Rica. In Latin America, the opportunity cost is often significantly lower than in other regions.

This is because, for many graduates, traditional corporate careers in the region may not offer the same rate of professional growth or the level of impact when compared to other parts of the world. “Creating a venture becomes an attractive alternative to shape their own leadership path and accelerate their personal and professional development,” says Professor Rojas.

This is something Dr Jahanshahi also notes, reflecting on his career teaching students at leading universities across Chile, Peru and Mexico, where students often view entrepreneurship as a way to determine their own future, particularly when traditional careers don’t offer the opportunities they’re seeking.

“Latin America's entrepreneurial spirit reflects more than economic necessity. It also reflects a culture of resilience, adaptability and optimism that encourages young people to create opportunities rather than wait for them,” he says.

Latin American universities incorporate entrepreneurship into their degrees in different ways. Some, like INCAE Business School, run and take part in entrepreneurship competitions, for example, which gives students the push that they need to start their businesses.

In these competitions, students learn to identify opportunities, test ideas, collaborate with entrepreneurs and investors and develop the confidence to turn their ambitious ideas into sustainable business ventures.

Andrea García, a Latin American student whose team won first place in the international PRME Students Innovation Studio, says that business school gave her the contacts and experience needed to create the business. “INCAE pushed us out of that classroom. They connected us to the PRME Innovation Studio with the UN Global Compact,” she says.

“Suddenly we had real deadlines, real judges, real feedback from people with no reason to be kind to us. That changes everything.”

Other schools, such as Argentina’s IAE Business School, offer students a dedicated Entrepreneurship Center, which helps them through the early stages of their ventures — from the initial motivation to start a company through to its early development.

Student entrepreneurs at IAE are inspired and supported at all stages of their company’s development, with access to interdisciplinary knowledge, networks and research. The school continues to look into how it can better help student entrepreneurs and understand the factors that contribute to entrepreneurial success and failure.

Entrepreneurial individuals are often highly motivated and looking to expand their professional networks. Business schools give them the opportunity to do this through teamwork, case discussions, group projects and interactions with classmates from diverse industries and professional backgrounds.

Schools like IPADE ensure there are always networking opportunities available to students, both inside and outside the classroom. Dr Jahanshahi believes that universities and business schools can improve the support they offer entrepreneur students even more and should create more opportunities to bring together students of different disciplines. “Some of the most innovative entrepreneurial ideas emerge when different backgrounds work together,” he says.

There is also an emphasis on responsible leadership in many Latin American universities: helping students build companies that generate long-term economic and social value for the region. This is something Dr Jahanshahi believes more business schools should actively promote.

“Universities should encourage students not only to become entrepreneurs but also to become responsible leaders capable of building sustainable businesses that positively impact their communities,” he says.

There is no right or wrong way to approach entrepreneurship while at university as every business and student is unique.

Yet, according to a study from Instituto Tecnológico de Costa Rica and Universidad Católica del Uruguay, which looked at 9,012 Latin American university students, students committed themselves to learning entrepreneurial skills outside of the classroom and did not necessarily rely on the entrepreneurship courses and models that their university offered to do it.

Even more surprisingly, those who attended entrepreneurship courses were less likely to strive to be entrepreneurs.

The researchers suggest that this is not due to a lack of teaching quality, but rather that some student entrepreneurs prefer a less structured and more experimental approach to starting a business.

Student entrepreneurs should therefore focus on choosing a university or business school which can provide them with the necessary soft skills and allows them the option to explore different markets and areas of interest so that they are able to take on this information and choose the best approach for them; whether that is traditional academic classes or real-world experimentation.

Whether entrepreneurship is something you can teach or something students can develop naturally, the fact is that Latin America is creating an appealing environment for budding young business owners – something that the rest of the world can surely learn from.