Why are Latin American students more likely to become entrepreneurs

Responding to uncertain economic environments

Students at Latin American universities are drawn to entrepreneurship because they have a desire to create a positive difference in the world, notes Professor García.

The technological revolution has made this more possible now than ever before. “It’s creating new possibilities and inspiring a new generation of entrepreneurs who can build companies from the ground up,” he says.

However, Latin America’s young people also often turn to startups out of necessity: more than 80%of new entrepreneurs in Mexico, Guatemala, Argentina and Costa Rica say they chose that career path because jobs are scarce, according to the most recent Global Entrepreneurship Monitor report[JS1] .

“Beyond personal motivations, entrepreneurs in the region often develop the ability to identify opportunities within uncertain economic environments and changing labour markets,” he says. “This capacity to perceive opportunities amid uncertainty is an important characteristic of the Latin American entrepreneurial mindset.”

Entrepreneurial activity in Latin America has historically been linked to economic cycles, with entrepreneurial ventures increasing during periods of crisis and becoming more moderate in times of greater stability.

In response to dealing with their changing economic and political environment, entrepreneurs in the region are often able to adapt quickly to highly uncertain situations — more so than in the West — giving them the skills every good entrepreneur needs to build a successful business.

“It is one of the distinctive strengths that other entrepreneurial ecosystems can learn from.”

Entrepreneurship as a natural choice

While economic volatility and political change in the region certainly play a role in the drive for entrepreneurship, they are by no means the only factors.

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.

Rather than being something students are forced to do, 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 entrepreneurship

The opportunity cost of starting a business may also play a role, 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 rapid professional growth or the level of impact they aspire to achieve. “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.

What role do universities play in inspiring entrepreneurship?

Universities across the region incorporate entrepreneurship into their degrees in different ways. Some, like INCAE Business School, run and take part in entrepreneurship competitions.

Here, students learn to identify opportunities, test ideas, collaborate with entrepreneurs and investors, and develop the confidence to turn ambitious ideas into sustainable ventures with regional impact.

Andrea García, whose team with three other students 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, are equipped with a dedicated Entrepreneurship Center, helping students 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 school gives 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 to better support students, universities and business schools 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 - helping students build companies that, while successful, also generate long-term economic and social value, something Dr Jahanshahi believes 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.

Is there a right way to teach entrepreneurship?

There is no right or wrong way to teach entrepreneurship, 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, it is students’ perceived learning of entrepreneurial skills that matters more than the entrepreneurship courses themselves — the learning quality, rather than the modules.

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 quality, but rather that some courses are overly theoretical and fail to inspire students –—and may even put students off by exposing them to the real risks and challenges of starting a business.

This is backed up by another study from several Latin American universities including Universidad del Rosario in Colombia, Universidad Ricardo Palma in Peru and Universidad Autónoma de Baja California, which confirms there is no clear correlation between entrepreneurship classes and a student’s intent to launch a venture. Yet these courses may play a role by improving administrative capabilities and practical entrepreneurial attitudes.

Bearing this in mind, perhaps business schools should focus more on the entrepreneurial skills they teach students through other non-related courses than on the entrepreneurship courses themselves.

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.