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The Entrepreneurship Landscape, Tools for Facilitating Entrepreneurship, Capacity Building, Private Public Partnership
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Contents
I. The Entrepreneurship Landscape a. Defining Entrepreneurship b. The Impact of Entrepreneurship on Economic Growth The Socialization and Motivation of Entrepreneurs a. Understanding The Entrepreneurship Experience Tools for Facilitating Entrepreneurship a. Unlocking entrepreneurship opportunities b. Capacity building c. Example: Mobile Entrepreneurs in Africa d. Unlocking the Value in Africas workforce e. Innovation f. A Case Study: Entrepreneurship and Innovation in Ghana Entrepreneurship and the Private Sector a. Engaging and developing partnership b. The Nature and Benefits of Private Public Partnership c. Example: Sustainable Agricultural Development d. Example: Healthcare The Way Forward a. MSMEs Investments: Access to Finance b. Government Support: Entrepreneurship Training Programs c. Regulatory reform: Research and Policy References 3
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1 Naude and Havenga, 14 2 Ibid. 3 Ibid. 4 Ibid. 5 Robson, Haugh, and Obeng, 331 6 Ibid 7 Naude and Havenga, 19-20 8 Ibid, 19
In the same context, some general challenges include: Weak economies High level of competition Lack of financial capital From the analysis group of 201 self-employed professionals in micro-enterprises, it was determined that some factors that influence self-employment identification are: Individuals training Occupation of parents Need for achievement From these research results we can see the strong need for financial capital among entrepreneurs. Although many aspire to create successful businesses, the lack of financing makes the risk of failure a danger to their economic survival. Once a viable and innovative entrepreneurship opportunity has been found, an investing firm should be ready to alleviate the financial burden of starting a business for the entrepreneur, and offer access to management resources if required.
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Capacity building
Simply defined as the development of skills and institutions, capacity building is a critical element in the achievement of sustainable economic growth9. The quality of economys human skills and institutions is an important determinant of the quality of output generated. As a result, investors and entrepreneurs have stakes in the building of capacity within their regions. The availability of effective government institutions, financing programs, and a highly skilled human resource pool increase the likelihood of entrepreneurship success and the level of innovation. A variety of organizations are currently involved in the building of capacity in African developing countries. These range from international financial institutions such as the IMF and African Development Bank, to specialised local organizations such the Mobile Entrepreneurship in Africa.
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capital available. Many are restricted to banks that hardly offer loans or do so at unfeasibly high rates (30 to 60 percent per annum). An investor looking for new investments opportunities should find programs such as the Mobile Entrepreneurship In Africa, which offer many benefits. Partnering with these organizations to support entrepreneurs or investing directly in the programs are opportunities for financial returns. Many of these programs have the structure to address a need, but require financial support to be sustainable and to flourish. An alternative is to invest directly into entrepreneurs through programs such as MEA for a greater control over the organization the specific businesses of interest.
Mo*va*on
Entrepreneurial Skills
Workforce Training
An amenable model designed by Van Vuuren and Nieman attempts to address the question, How do you improve the entrepreneurial performance of an individual by means of training intervention? The model postulates that entrepreneurial performance is a multiplicative function of motivation times entrepreneurial skills and business skills12, where: Entrepreneurial performance is based on the starting of a business/utilizing an opportunity and growth of the business idea. Motivation is the entrepreneurs level of need for achievement. Entrepreneurial skills include creativity, innovation, risk-taking, and the ability to interpret successful entrepreneurial role models and identification of opportunities. Business skills include being able to formulate business plans, and financial, marketing, operational, human resources, legal, communication, and management skills.13
11 Ladzani, and van Vuuren, 156 12 Ibid, 157 13 Ladzani, and van Vuuren, 157
Furthermore, although the provision of training is critical for the development of the workforce, great emphasis must also be placed on the content of what is provided. An analysis of the needs of the workforce, market trends, and the expertise of the trainers should all play a role in the design of the training programs. From the study, some key recommendations for public and private organizations are that: Existing training firms should revise their training materials SME service providers should benchmark their services with successful similar institutions Educational institutions should introduce and/or strengthen entrepreneurship education Emerging and potential entrepreneurs should be encouraged to take courses in entrepreneurship14
The value in Africas workforce will grow with the development of the value in its capacity. Therefore the key to developing the value of this workforce lies in the provision of programs and training to strengthen the quantity and quality of work produced.
Innovation
The majority of research conducted on innovation is done in the context of firms established in developed countries.15 As a result, the relevance of the innovation process in firms doing business in developing countries is not always properly acknowledged.16 It is important to note that much of the existing research has examined product innovations and neglected ideological innovations such as new management practices, which offer opportunities for further development.17 This section explores the current research on innovation and its relationship with entrepreneurship in Africa. The benefits of a thriving SME sector are numerous and include the potential for a country to generate employment, develop its domestic economy, and engage in international trade.18 It is suggested that adequate economic growth is unlikely to be achieved solely from domestic provision of the basic national development needs. Instead, the sale of innovative goods and services in export markets generates foreign exchange that can enhance domestic development.19
14 Ibid, 160 15 Ibid. 16 Ibid. 17 Ibid. 18 Robson, Haugh, and Obeng, 332 19 Ibid.
To enable the flow and exchange of ideas and for the development of innovation, government policies and funding programs are needs to serve as a safety net and lessen the impact of innovation failure for entrepreneurs. This presents unique investment opportunities for investors who seek to benefit from the rich financial potential of entrepreneurship in Africa.
Example: Healthcare
In the 1980s and 1990s, a combination of staggering deficits in health care delivery and structural adjustments of the World Bank and International Monetary Fund induced drastic cuts in public expenditure and steady disengagement of the state in essential social welfare provision.29 The poor state of health provision in sub-Saharan Africa has triggered creative convergences in health care delivery. Over 75 health-related PPPs such as the Roll Back Malaria Global Partnership, Global Network on Household Water Treatment, The International AIDS Vaccine Initiative, Bill and Melinda Gates Childrens Vaccine Program, and The African Comprehensive HIV/AIDS Partnerships.30 Despite the promising benefits of PPPs in healthcare, the challenges are multidimensional and complex. Partnerships offer added value from local and transnational cooperation and synergies at local, national, and international levels. However it is advised that partnerships need to be purposeful rather than ad hoc. They must also be flexible and dynamic enough to adapt to a changing context, incorporate new partners, and respond to emerging needs.31 It is also strongly recommended that governments formulate and uphold clear national policies. They must also maintain a sustainable governmental commitment to national programs and not rely on the support of partnerships.
26 Ferroni, and Castle, 1064 27 Ibid. 28 Ferroni, and Castle,1066 29 Lo, 215 30 Lo, 215 31 Lo, 232
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References
Ferroni, Marco, and Paul Castle. "Public-Private Partnerships and Sustainable Agricultural Development." Sustainability. 3. (2011): 1064-73. Print. Froumentin, Max, and Stephane Boyera. "Mobile Entrepreneurship in Africa, IT in Emerging Markets." IT Pro, IEEE Computer Society. (2011): 60-62. Print. Ladzani, Watson, and Jurie van Vuuren. "Entrepreneurship Training for Emerging SMEs in South Africa." Journal of Small Business Management. 40. (2002): 154-161. Print. Lo, Marieme. "PublicPrivate Partnerships for Maternal Health in Africa: Challenges and Prospects."Marriage & Family Review. 44. (2008): 214-37. Print. Naud, W A;Havenga, J J D. Research On Entrepreneurship And Small Business In Africa. ARPENT: Annual Review of Progress in Entrepreneurship; 2002/2003; 2, ProQuest Entrepreneurship:13 37.Print. Nsouli, Saleh M, Capacity building in Africa: The role of international financial institutions Finance & Development; Dec 2000; 37, 4; ABI/INFORM Global. 34 37. Print Robson, Paul, Helen Haugh, and Bernard Obeng. "Entrepreneurship and innovation in Ghana: enterprising Africa." Small Business Economics. 32. (2009): 331-50. Print. Rogerson, Christian. "In Search of Public SectorPrivate Sector Partnerships for Local Economic Development in South Africa." Urban Forum. (2010): 441-56. Print.
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Disclaimer This publication contains general information only, and Sub-Saharan Consulting Group is by no means of this publication, rendering professional advice or services. Consult a qualified professional before making any decisions or taking actions that may affect your finances or business. Sub-Saharan Consulting Group 2012 Designed and written by Sharon Obuobi
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