HomeAnalysisThe role and importance of key entrepreneurship development

The role and importance of key entrepreneurship development

The role and importance of entrepreneurship development in several countries globally is quite significant. Many academics and governments have suggested that entrepreneurship can be a panacea to economic transformation, empowerment and poverty alleviation, especially in developing countries like Zimbabwe. Its role in economic development through employment creation has become a priority for many countries. For the past decades many countries in developed and developing countries have shifted their policies from being directed towards a managed economy to an entrepreneurial economy.

By Nhamo Kwaramba

LESSON

As such the majority of countries worldwide have established programmes to support entrepreneurship within their communities. As a country, Zimbabwe can do more to render the needed support and create opportunities for the entrepreneurs to flourish.

Although entrepreneurial activity in developing nations especially in Africa keep struggling to reap the economic benefits similar to those in developed nations, the number of enterprises and entrepreneurs continues to grow. Many struggle to withstand the challenges and risks associated with entrepreneurial programmes because of lack of support. Even where they have brilliant products and better services, without enough resources and support it becomes difficult to make it in the broad business operations. What needs to be done is for the government to intensify their efforts in promoting the entrepreneurial sector. The relevant ministry should take a strong stance and lobby the government to consider investing more in entreprenuerial work so that entrepreneurship becomes a productive and competitive sector. With time the entrepreneurial sector will grow and offer better returns for the government.

According to a study carried out by Kumar and Liu (2005), it revealed that the entrepreneurial sector contributes significantly to employment creation, business growth, revenue generation and investment. It is an engine for economic growth, contributing positively to GDP. For this reason the government needs to minimise the constraints on entrepreneurship. It should take strong strides in addressing, assisting and empowering entreprenuers, who now form the majority of trading taking place in the country. Whilst many businesses in the country can be referred to as “informal businesses or traders”, the concept of entreprenuership dominates the basis upon which such businesses are formed and anticipate to grow to become conglomerates. Indeed most of them are informal traders but a handful can be identified who can grow to become successful entrepreneurs like Strive Masiyiwa and Shingai Mutasa.

With the high levels of unemployment in Zimbabwe, job creation that particularly focuses on promoting the entrepreneurial sector in the economy becomes important. In Zimbabwe, the informal sector is now the country’s largest employer as the economy is failing to absorb many job seekers into formal employment. For the past two decades, over two million people have been making their living in the informal sector. Hundreds of job seekers come out of Zimbabwe’s schools, colleges or universities each year with a little chance of finding work in the formal sector. In that case, entrepreneur promotion becomes key to remedy the situation.

Since the government leads the process, it should provide the much needed resources within its capability to support entrepreneurial ventures. Such resources should include the creation of a conducive business environment that will highly promote entrepreneurship. In this context, the policy should aim to improve the conditions of entrepreneurs in terms of supportive and funding policies for the simple reason that entrepreneurship is the bedrock of the country’s path to grow the economy.

Some countries like China and Brazil have been successful in promoting entrepreneurship. The Chinese government has made concerted efforts through policies and resources on the development of high technology businesses. The Brazilian entrepreneurship movement has established policies that are geared towards developing the low-tech businesses as well as high technological oriented firms. The Kingdom of Saudi Arabia in 2010 established a 10 year entrepreneurship and innovation plan.

The intention of the strategy was to put the country at equal pedestal with high economic competitive nations globally. In the context of Malaysia, the government has set up various technology funding organisations in its bid to develop the growth of technology entrepreneurship by giving full support to technology businesspersons. This includes the establishment of venture capital firms by the government with the intent of encouraging investments in high growth firms for the reason that they find it difficult to raise adequate financing at the early stage growth.

The same approach can be replicated, though with some adjustments to suit the Zimbabwean environment.

Entreprenuership thinking, focus and actioning needs to be nurtured, promoted and supported. It is important to have a national entreprenuerial policy which is extensively communicated to encourage people to venture into new innovations and creations. In Zimbabwe, people know more about musicians than they know about entreprenuers. Any random survey in the streets of Harare will certainly show that names of musicians like Oliver Mtukudzi, Alick Macheso, Jah Prayzeh and Soul Jah Love are well known by the majority of people especially the young ones.

On the contrary, very few people know about entreprenuers like Roger Boka, Paul Mukondo, Strive Masiyiwa, Shingai Mutasa, Lovemore Mukono, Mutumwa Mawere, Sam Levy, Trevor Ncube, Shingi Munyeza and others. This is because not much is said about them and the positive contribution they make towards the economy by generating employment, coming up with new products and improved services as well as contributing towards the GDP of the country. Other disciplines are equally important but they need to be supported by a well functioning economy anchored by entreprenuers’ products and services.

Entrepreneurship is not a walk in the park as some might believe. It is a highly risky venture. A case in point is the example of Guy Laliberte, a founder of Cirque du Soleil with a net worth of US$2,5 billion. He struggled early in his career as a street performer in Montreal before venturing out as an entrepreneur. Today, his multi-billion-dollar business showcases in 271 cities worldwide and employs tens of thousands of people in the process. When Laliberte was asked during an interview if he still takes risks, he quickly responded: “Every day.” Wall Street Journal Wealth Reporter Robert Frank added his insights during the same interview and explained that: “Part of the risk-taking personality is the ability to overcome failure… and one of the things that makes billionaires successful is their reaction to failure.”This is an important concept that needs to be understood.”

In Zimbabwe, there are successful entrepreneurs like Shingai Mutasa who owns TA Holdings, a diversified group listed on the Zimbabwe Stock Exchange and is also the brains behind the Joina Centre which is one of the modern office buildings in Harare metropolitan area. The building was not easy to build because of the challenges to finish the project. It took more than 12 years to finish owing to escalating costs of construction materials and other difficulties, but he did not give up. He managed to complete the project and the building stands amongst the most beautiful and magnificient building structures in Zimbabwe.

A study carried out in Nigeria noted similar challenges faced by entrepreneurs in Zimbabwe.

Mambula (2002) found that 72 percent of entrepreneurs in Nigeria considered lack of financial support as number one constraint in developing their business. The procedures for securing business loans from banks are cumbersome and the collateral demanded for such loans is excessive.

Basic physical infrastructure required for economic development such as good roads, ample power supply, and good rail and river transportation facilities, are in very poor shape. As a result, deplorable roads, deteriorating rail lines, inadequate power supply and unusable waterways make entrepreneurial operations difficult.

Despite these challenges, it goes without saying that entrepreneurial skills and empowerment should be promoted at all costs. Free as Zimbabweans are, they should be free to become as wealthy as their talent, creativity, and hard work can take them, so long as they do not cheat, steal or use force or fraud against customers. Entrepreneurs can grow and expand their businesses and in the process employ others, not just by hiring people but through the jobs that are created indirectly by those who supply other requirements.

The prevailing economic reality makes it very clear that supporting entrepreneurship is critical for the growth of the economy and betterment of the Zimbabwean citizens. Entrepreneurs change the way people live and work in a tremendous way through creation of jobs and wealth for everyone who is willing to work. Thus giving others a leg to stand on in achieving their career and business objectives

The single most important fact about entrepreneurs such as Bill Gates and the late Steve Jobs is that their great wealth gives others the tools to become wealthy. The Global Entrepreneurship Monitor Project, a comparative international study assessing entrepreneurship’s importance to economies worldwide concluded that the correlation between the level of entrepreneurial activity and economic growth is greater than 70% and all nations with high levels of entrepreneurial activity have above average rates of economic growth. As the country sort out its priorities for the coming years, fostering entrepreneurship must be a cornerstone of their economic policy so as to ensure that global change remains their ally and never becomes the enemy.

Kwaramba is the principal executive consultant for Capacity Consultancy Group. He is a Leadership, Organisation Development, Strategic Planning, Human Resources and Labour Relations Expert. New Perspectives articles are coordinated by Lovemore Kadenge, President of the Zimbabwe Economics Society (ZES) Cell +263 772 382 852 Email kadenge.zes@gmail.com.

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