32. Violence and Small Business in Colombia
Wesley Sine
Wesley D. Sine, Johnson Graduate School of Management, and research staff found that Colombia’s violence has damaged the nation’s economic growth on several levels, including the willingness of entrepreneurs to network, grow their businesses, and innovate. Colombia has suffered decades of brutal violence engendered by revolutionary movements, drug cartels, private militias, and street gangs. Street violence affects Colombians every day and threatens the survival of their small businesses, such as shops, bakeries, automotive garages, and manufacturers. Domestic instability directly limits entrepreneurs’ ability to prosper. Yet Colombia also boasts rich natural resources, abundant gold and emerald production, and a relatively educated populace. The researchers analyzed data from five Colombian cities, tracking the successes and failures of 1,000 small businesses from 1997 to 2007. They interviewed hundreds of workers, entrepreneurs, and families, while tracking rates of homicide, kidnapping, and other statistical measures of violence. Since the decline of major insurgencies, such as the National Liberation Army (ELN), the Revolutionary Armed Forces of Colombia (FARC), and the paramilitaries, survival rates for small businesses have doubled.