Entrepreneurship is often cited as the key to a country’s growth and economic
improvement. As entrepreneurs take controlled risks and pursue innovation, they
personally prosper along with the country in which they found their business
(Timmons and Spinelli, 2007). In the USA, for example, small businesses contribute
significantly to the economy, employing more than half of the total private workforce
and accounting for about half the country’s sales and gross domestic product (GDP)
(Popkin, 2004). In Argentina, however, the situation is different.
According to the global entrepreneurship monitor (Bosma et al., 2008), countries are
grouped by their phase of economic development as either efficiency-driven, innovation
driven (i.e. the USA) or factor-driven economies. Argentina is grouped with
efficiency-driven economies and ranks third in early-stage entrepreneurial activity
behind Peru and the Dominican Republic but above Mexico and Brazil. Bertranou (2007)
found 23.5 percent of Argentina’s total employment was from self-employment – one of
the lower percentages in Latin America. Many of these entrepreneurial businesses have
been formed from necessity and often are not driven by market opportunities and
consequently have high failure rates.
How could entrepreneurial activity level in Argentina be improved? Why has
Argentina not reached its economic potential in terms of new, small business growth? The
purpose of this paper is to use the popular strategic planning methodology of strengths,
weaknesses, opportunities, threats (SWOT) analysis to answer these questions.