On the question of entrepreneurial breakthrough or failure in Africa: a framework for analysis

Abstract

PurposeHaving the right intent, aspiration, ability and attitude to become an entrepreneur has become the mantra in the extant literature to be driver of entrepreneurship and small and medium enterprise (SME) growth. Why would zealous and ambitious individuals with all rightful attributes so required of entrepreneurs have to fizzle out few years after venturing into business or SMEs? Perhaps these same individuals may relocate to other jurisdictions and would establish successful firms even beyond their imaginations. Beyond the individual’s entrepreneurial attributes, there are other external countervailing forces which either “enable” or “impede” entrepreneurial drive and SME growth processes. Adopting the theory of planned behavior, this study conceptualizes a systems framework to analyze how SMEs either flourish or fail in developing countries.Design/methodology/approachThe study relies on secondary sources of data. It adopts a critical stage review of secondary data.FindingsThe study argues that the interplay of “internal factors” and “external factors” of prospective entrepreneurs provides a useful framework to explain the general SME outlook of an economy. The study postulates that many internally driven prospective SME entrants (with entrepreneurial attitudes, abilities and aspirations) mostly in the developing economies may have their dreams shattered because of obstructive external ecological elements which tend to frustrate new business entrants as well as existing ones.Originality/valueWith the aid of a framework, this study conceptualizes a comprehensive framework to analyze how SMEs either flourish or fail in developing countries.

State-business relations for entrepreneurial takeoff in Africa: institutional analysis

“…The intensity of market failures in developing African countries makes a stronger case for robust public regulation through institutional frameworks (Adu-Gyamfi et al ., 2022). By setting the “rules of the game”, public institutions would greatly have a significant impact on economic development (Yeboah-Assiamah et al ., 2023). Many African states are noted for bad governance, institutional laxities and instability that do not only promote investment and but also tend to crowd out the private sector.…”

“…The relationship between entrepreneurial growth and macroeconomic stability has been recognized since the 1940s with Schumpeter's notion of “creative destruction” (Schumpeter, 1965). It is instructive to point out that collaborative state-business interaction remains crucial in the drive to entrepreneurial growth and transformation in developing countries (Yeboah-Assiamah et al ., 2023). Therefore, if developing countries seek structural transformation, it is essential to adopt a more effective state-business relation which is underpinned by robust institutions that are supportive of SMEs.…”