The Role of

Entrepreneurs within a
Developing Nation:
A Focus on Zimbabwe

September 2012

Author: Tendai Mazhude

University ID: 8083568

Institution: University of Manchester, Manchester Business School

Degree: Innovation Management and Entrepreneurship (M.Sc)

Unit: Postgraduate Dissertation

Abstract

With the developing country of Zimbabwe chosen as the focus of this study due to the

multiple socioeconomic challenges it faces, this dissertation seeks to establish whether

the proliferation of entrepreneurs is the key to economic and social prosperity. In order to

accomplish this, three research objectives are set and evaluated in turn through an

extensive literary review. Findings from the review are augmented, validated and

contrasted with findings from interviews held with six leading authorities within the

Zimbabwean socioeconomic arena.

A broad range of issues are covered within the study’s remits in order to elicit a holistic

understanding of the role of entrepreneurs within a developing nation. The entrepreneurial

review begins by focusing on defining entrepreneurship. The second entrepreneurial

literary category might be considered the trait section and is followed by a focus on the

effects of entrepreneurship (economic and social impact).

The qualitative interviews lead to an understanding of Zimbabwean entrepreneurs as

resourceful individuals who predominantly operate within the informal sectors of the

country and driven by a sense of necessity. They are found to have extremely poor

support infrastructures and would drastically benefit from a complete change in the

political and regulatory environment. This; in conjunction with the formation of a supportive

culture, injection of foreign direct investment and the introduction of an entrepreneurial

education curriculum are said to be some of the necessary measures required to nurture

the growing population of indigenous entrepreneurs.

2
Declaration

This dissertation is a product of my own work and is not the result of any collaboration. No

portion of the work referred to in the dissertation has been submitted in support of an

application for another degree or qualification of this or any other university or other

institute of learning.

Copyright in text of this dissertation rests with the author. Copies (by any process) either

in full, or of extracts, may be made only in accordance with instructions given by the

author. I agree that this dissertation may be available for reference and photocopying at

the discretion of the University of Manchester.

Tendai Mazhude

8083568

3
Acknowledgements

The completion of this dissertation would not have been possible without the help of many

people.

First and foremost, I would like to thank my family. In particular, my parents - George and

Mary-Joyce Mazhude for all of their support, financially and emotionally – I truly am

forever indebted to you. My brother: for inadvertently spurring me to complete my masters

and being my second pair of eyes in reviewing this dissertation. And my sister; for being a

constant source of entertainment and amusement when I need it.

Secondly I would like to thank my dissertation tutor, Jonathan Styles for the insightful

discussions, much needed guidance and inspiring me to believe in my own abilities.

I would also like to thank all the respondents that gave of their valuable time and

knowledge to assist me in conducting my research.

Last but by far the least, I would like to thank all my friends, those that pushed me when it

really mattered – your support was greatly appreciated. Special mention goes to Mudiwa

Mtungi, Monica Patel and Raymond Muzembe. I also have to mention Lucozade energy

drinks for keeping me mentally alert at times I most needed it – drink, think, do.

4
Table of Contents

Abstract ......................................................................................................................................2
Declaration .................................................................................................................................3
Acknowledgements ....................................................................................................................4
Table of Contents .......................................................................................................................5
Table of Figures .........................................................................................................................7
List of Tables ..............................................................................................................................8
1. Introduction.............................................................................................................................9
1.1 Background..................................................................................................................9
1.2 Research Objectives .................................................................................................10
2. Literature Review ..............................................................................................................12
2.1 Developing Countries ................................................................................................12
2.2 Entrepreneurship .......................................................................................................17
2.2.1 Introduction.........................................................................................................17
2.2.2 The Evolution of Entrepreneurial Theory ...........................................................18
2.2.3 Who are Entrepreneurs?....................................................................................20
2.2.4 Entrepreneurs in Developing Countries.............................................................22
2.3 Entrepreneurial Traits and Characteristics ...............................................................27
2.3.1 Within a Developing Country .............................................................................30
2.4 Results of Entrepreneurship......................................................................................31
2.4.1 Economic Impact................................................................................................31
2.4.2 Economic Impact within a Developing Economy...............................................32
2.4.3 Social Impact ......................................................................................................33
2.4.4 Social Impact within a Developing Country .......................................................38
2.5 Supporting Socially and Economic Enhancing Entrepreneurship ............................40
2.5.1 Overview on Supporting Entrepreneurship........................................................40
2.5.2 Policies and Regulation......................................................................................42
2.5.3 Training and Education ......................................................................................50
2.5.4 Financing ............................................................................................................52
2.5.5 Culture ................................................................................................................57
3. Research...........................................................................................................................61
3.1 Methodology ..............................................................................................................61
3.2 Interview Framework .................................................................................................62

5
 3.3 Interviewees...............................................................................................................64
3.3.1 Sampling.............................................................................................................64
3.3.2 Rationale ............................................................................................................66
3.4 Zimbabwean Entrepreneurs ......................................................................................67
3.5 Economic Impact .......................................................................................................70
3.6 Social Impact .............................................................................................................71
3.7 Supporting Entrepreneurs .........................................................................................73
3.7.1 Policies and Regulation......................................................................................76
3.7.2 Training and Education ......................................................................................78
3.7.3 Financing ............................................................................................................79
3.7.4 Entrepreneurial Culture ......................................................................................80
3.7.5 Additional Suggestions.......................................................................................81
4. Discussion & Recommendations ......................................................................................83
4.1 Entrepreneurs ............................................................................................................83
4.2 Economic Impact .......................................................................................................84
4.3 Social Impact .............................................................................................................84
4.4 Supporting Entrepreneurs .........................................................................................85
5. Limitations and Future Research......................................................................................87
6. Conclusion ........................................................................................................................89
7. References ........................................................................................................................91
8. Appendices .......................................................................................................................98
APPENDIX A ........................................................................................................................98
APPENDIX B ........................................................................................................................99
APPENDIX C ......................................................................................................................101

6
Table of Figures

Figure 1: Developing Nation Characteristics ...........................................................................15

Figure 2: SME Definition ..........................................................................................................23

Figure 3: Entrepreneurial Orientation Related to Positive Business Performance .................27

Figure 4: Sub-Saharan Africa - Civil Servant Wages ..............................................................44

Figure 5: The Entrepreneur Axis ..............................................................................................45

Figure 6: SME Finance Coverage ...........................................................................................55

Figure 8: Creating a Schumpeterian Entrepreneurial Culture .................................................60

Figure 10: The Interviewees ....................................................................................................66

7
List of Tables

Table 1: Evolution of Entrepreneurial Theory ........................................................................19

Table 2: Promoting Entrepreneurial Spirit ...............................................................................41

Table 3: SME Financing Options .............................................................................................54

Table 4: Shortcomings/Challenges faced by Zimbabwean Entrepreneurs.............................73

8
1. Introduction

1.1 Background
Understanding the role of entrepreneurship for economic growth is important because

governments worldwide are sinking large amounts of capital in the pursuit of policies that,

lacking such understanding, may have little if any effect on the macroeconomic c onditions

of a country (Minniti and Lévesque, 2010, p.307). With the World Bank and the

International Finance Corporation [IFC] (2012, p.6) identifying Zimbabwe as having “just

about the worst-performing economy in the world,” it ranks the ease of doing business as

171st out of 183 countries. According to The Heritage Foundation (2012) the country is

ranked as having the 178th freest economy, making it the second least free country ranked

in the 2012 Economic Freedom Index. On the social front, government figures indicate

that the poverty rate has been as high as 75% although the humanitarian situation has

shown some improvement since 2010 when the economy stabilised (Passport GMID,

2012). With poor levels of mechanisation in comparison to developed nations, low

standards of living and an increasing dependency on foreign aid and investment – a

sustainable and indigenous solution to these problems needs to be found.

Given the 13 years of sustained economic and social decline, the immediate task has

been that of macroeconomic stabilisation. As a result, the government came up with the

Short Term Emergency Recovery Program (STERP), then the Three Year

Macroeconomic and Budget Framework, 2010-2012 also known as STERP 2. This was

overridden in 2011 by the Medium Term Plan (MTP) which is the master plan for

Zimbabwe till 2015 (ZNCCa, 2012). However, the promotion of entrepreneurial activity

within any of these overarching policy documents is sparse and an area of contention

within this dissertation.

9
It is believed that promoting entrepreneurial activity within the nation will not only aid in

macroeconomic stabilisation, but bring about sustainable economic growth whilst

drastically improving the lives of the local inhabitants. Therefore, this dissertation seeks to

augment current literature on entrepreneurs’ roles in social and economic development,

as it is a relatively new field of economic development study – especially in developing

nations such as Zimbabwe (Minniti and Lévesque, 2010).

1.2 Research Objectives

With the lower income generating country of Zimbabwe selected as the focus of this

dissertation - the study is driven by the following postulation (adapted from: Mwenda,

2007):

“The proliferation of entrepreneurs is the key to economic and social prosperity”.

As a result, the following research objectives have been set in order to establish whether

the given postulation ‘holds water’, and if so, establish how this prosperity can be

achieved.

a) Who are entrepreneurs within pervasive literature and within a Zimbabwean

context?

b) What is their economic and social impact?

c) How can the proliferation of entrepreneurs’ and entrepreneurship best be

supported within the developing state of Zimbabwe?

10
Through the combined use of wide ranging academic literature and suggestions from

interviewed parties, an outline of appropriate and necessary support mechanisms is

ultimately sought. This will entail, proposing suitable support infrastructure, policies,

financing methods and areas for business focus.

11
2. Literature Review

The literature review commences by defining a developing country (history and typical

characteristics). This is done as a precursor to the entrepreneurial literature review as the

term is frequently referred to within the rest of the dissertation. The following categories

are then utilised to provide as holistic an understanding of the entrepreneurship disc ipline

and its economic as well as social effects as possible (adapted from Bull and Willard,

1993, p.184).

The entrepreneurial review begins by focusing on defining “entrepreneurship” (its history

and identifies who entrepreneurs are). The second entrepreneurial literary category might

be considered the trait section (identifying the psychological traits of entrepreneurs). This

is then followed by a focus on the effects of entrepreneurship (economic and social

impact). Finally, the dissertation will evaluate how environmental factors as outlined by

Acs and Virgil, (2009, p.5); policies and regulation; financing; training and education; as

well as culture could be utilised to support entrepreneurial endeavours. Each of these

sections commence in a general sense before addressing developing country specific

issues.

2.1 Developing Countries

In the words of Graseck (2008, p.367) one needs to, “Explore the past to understand the

present and shape the future”. In accordance with these sentiments, a historic

understanding of how a developing country such as Zimbabwe came to be is evaluated

within this section. Only thereafter can appropriate solutions for the economic and social

challenges faced be addressed.

12
Developing a Retrospective Understanding

Between 1945 and 1980 nearly 100 colonies in Africa, Asia and the Caribbean gained

their independence and began the process of initiating a development strategy for their

citizens. However, the transition from a colonial economy to an independent economy not

only created a weak socio-economic base from which post-independence states could

launch their development projects, but it also sowed the roots of socio-economic problems

that have proved decisive in shaping the patterns of development after independence

(Acs and Virgill, 2009, p.4).

McDade and Spring (2005, p.19-20) add to this historic understanding stating that

colonialism stifled the growth of an indigenous formal private sector. After independence,

some African governments limited the expansion of businesses owned by indigenous

entrepreneurs. Government leaders were suspicious that a strong private sector

comprised of their own citizens might threaten their own powers and privileges. Hence,

during the 1960s to 1980s, many African states stepped into the role of business

ownership. State-owned enterprises (SOEs) assumed the responsibility of building the

infrastructure of newly independent countries to meet the demand for goods and services.

Most SOEs were unproductive and failed so by the late 1980s; many African governments

abandoned this strategy. They turned to donor-driven policies that promoted private

sector-led economic development - many of whom came to be known as ‘business

bureaucrats’, who depended on the patronage of governments to remain viable.

Nielsen (2011, p.5) goes on to edify that an economic development system was

established and essentially distinguished colonisers and colonies through the categorising

nations as ‘pioneers’ and ‘latecomers’. Within this organising framework, newly

independent countries started out poor in a world in which there were already rich

13
countries. Therefore, economic development was seen as a process where latecomers

catch up with pioneers.

Having gained its independence from the United Kingdom in 1980, Zimbabwe is one of

the former colonies being referred to as having to ‘play catch up’ with ‘pioneering’

countries. Naude et al. (2011, p.3) voice that rapid economic catch-up depends on

countries’ entrepreneurs being able to absorb and creatively adapt international

technological knowledge. However, as a result of the mentioned handicaps, Zimbabwe

and many other sub-Saharan African countries (which go to comprise the foremost focal

points of developing states within this study) have failed to advance their economies in

comparison to industrialised states and consequently but not exclusively, are classified as

developing countries by global governing institutions such as the International Monetary

Fund’s [IMF] World Economic Outlook Report (2012, p.213).

Defining a Developing Country

The World Bank’s (2011) defines a developing country as one in which the majority lives

on far less money - with far fewer basic public services - than the population in highly

industrialised countries. The typical characteristics of such countries are represented

within Figure 1.

14
 Largely rural or with a
population that is migrating
to poorly equipped cities,
with a low-performing
economy that is based
primarily on agriculture and
where non-agricultural jobs
are scarce and low-paying

Where government has

collapsed and armed Where the populace is
conflict has left a fragile
state with weak institutions often hungry and sorely
lacks education, where
and policies, either there is a large knowledge
unwilling or unable to
provide basic social gap and technological
innovation is scarce
services, especially for the
poor

Developing

Nation

Characteristics

Where the land mass, Where health and

population, and domestic education systems are poor
markets are small and far and/or lacking and where
disbursed, with limited transportation, potable
institutional capacity, water, power and
limited economic communications
diversification infrastructure is also scarce

Where the amount of

government debt is
unsustainable

Figure 1: Developing Nation Characteristics (Adapted from World Bank, 2011)

As a result of the multifaceted nature of classifying a nation’s developmental stage

(exemplified within Figure 1), there is no unilateral definition of a ‘developed’ or

‘developing’ country – however the World Bank’s definition and characteristics are taken

to represent developing states within this study. In accordance with the lack of unilateral

definition of the term, the World Trade Organisation (WTO) stipulates that member states

announce their development status themselves as they do not have a definition or

criterion to do so (WTO, 2012). The WTO’s stance could also be interpreted as a means

of distancing itself from the controversies akin to the classification of countries economic

and social prosperity levels. This is because distinguishing the level of development

amongst industrialised nations can prove to be extremely challenging. Additionally, the

15
term assumes a desire to ‘develop’ along the traditional 'Western' model of economic

development. This model may not be whole heartedly embraced by all citizens of the

globe and/or their states. Therefore, in agreement with Nielson (2011, p.4) this

dissertation uses the developing/developed country terminology in recognition of its

widespread use and not because it is considered appropriate1.

1
The literature is replete with competing terminologies; examples include poor/rich,

backward/advanced, underdeveloped/developed, undeveloped/developed, late-

comers/pioneers, less economically developed/economically advanced,

emerging/emerged Third World/First World, and developing/industrialised etc. For the

purpose of this dissertation any terminology is as good as any other.

16
2.2 Entrepreneurship

2.2.1 Introduction

Having gained an understanding of what goes to constitute a developing country and how

this dissertation views their historic emergence – focus is now given to understanding the

theory of entrepreneurship, identifying a working taxonomy of entrepreneurs as well as

outlining the characteristics of entrepreneurial activity within a less economically

developed country (LEDC). The productive or positive elements of entrepreneurial activity

shall be the focus for evaluation within this dissertation as it is acknowledged that the

reward structures of a society can also lead to a destructive or negative allocation of

entrepreneurial talent (Naude et al., 2011, p.1). It is also worth noting that an evaluation of

intrapraneurship does not fall within the remits of this review. It is deemed to be a distinct

field of study, potentially requisite of its own separate analysis. In addition, the character

makeup of intrapreneurs is said to be different to that of entrepreneurs especially in regard

to risk tolerance (a key facet required within the establishment of new firms).

From the onset it is acknowledged that entrepreneurship is not one-dimensional and the

entrepreneur comes in shades of many different kinds, such that it is presumptuous to

conceive of a simple, unifying approach. This is because he/she is a situated individual

working within social as well as economic constraints and fully subject to the framing,

instituted ‘rules of the game’ (Metclafe, 2004, p.157). Yet, for academic purposes, mass

generalisations are undertaken in order to portray and glean some level of holistic

understanding of these individuals.

Entrepreneurs are not distinguished by gender within this study, with the potential social

and economic impact of both male and female entrepreneurs having been considered

within the same light. Although Van der Zwan et al. (2011) found that women tend to run

17
smaller firms and are less likely to pursue growth than men. The former authors and the

Organisation for Economic Co-Operation and Development [OECD] (2004) also found that

both genders propensity to be successful within chosen entrepreneurial careers did not

differ, but women are less likely to choose an entrepreneurial career due to the perceived

risks associated with such a vocation.

Finally, in regard to entrepreneurship, it is understood that the discipline studies the; “why,

when and how of opportunity creation, recognition and utilisation for providing goods and

services through the creation of new firms (start-ups) and within existing firms for both

profit and non-profit purposes” (Naude et al., 2011, p.1). In a broad sense,

entrepreneurship should be considered as a mind-set that supports everyone in day-to-

day life at home and in society, and provides a foundation for entrepreneurs establishing a

social or commercial activity (European Commission, 2012).

2.2.2 The Evolution of Entrepreneurial Theory

Entrepreneurship and commercial enterprises date back to ancient Mesopotamia (ca 3500

- 1200 BC). Business practices such as the use of money, uniform weights and measures,

interest and finance, had their genesis there and influenced other Mediterranean

civilisations (Hedberg, 2011). Entrepreneurship as a term, traces to the 13th century

French word entreprende, which simply means ‘undertaker’. When it was then first applied

to business management, the word entrepreneur simply referred to one who undertakes

business by assuming personal financial risk. This embryonic understanding was later

refined to describe an entrepreneur as one who, in addition to assuming personal financial

risk, also manages the business (Chulu, 2012).

On the other hand, scholarly work on entrepreneurship dates back to over two-hundred

years ago and although many definitions of the word “entrepreneur” have emerged, no

18
unifying theory of entrepreneurship has been developed (Bull and Willard, 1993, p.183).

The following table goes to provide a chronological evolution of entrepreneurial theory

from a selection of the leading literary pioneers.

Table 1: Evolution of Entrepreneurial Theory

(cf: Acs and Virgill, 2009, pp.29-31; Bull and Willard, 1983, p.185; Lingelbach et al., 2004, p.2;
Minniti and Lévesque, 2010)

Scholar Year Entrepreneurial Contribution

Richard Cantillon 1755 Someone who exercises business judgement in the face of
uncertainty – bearers of risk.

Jean-Baptiste Say 1803 Agents who co-ordinate factors of production (e.g. labour, capital)
with knowledge - in order to “meet the demands of the final
consumers”.

Joseph Schumpeter 1934 A leader and a contributor to the process of creative destruction.
Innovation, for Schumpeter, was central to entrepreneurial
activity and included the discovery of new products, new
processes and the discovery of new markets in response to
exogenous shocks of new information.

Friedrich Hayek 1945 Individual’s stock of information varied creating adjustments

within the market i.e. knowledge - opportunity matching process .
Hayek is also noted for understanding the conditions of supply
for various factors of production communicated new information
through prices.

Israel Kirzner 1978 One who perceived profit opportunities and initiated action to fill
currently unsatisfied needs or to improve inefficiencies. Kirzner
found that markets were often in disequilibrium due to previous
errors made by entrepreneurs and that this disequilibrium
generated new “profit opportunities” for “alert, imaginative
entrepreneurs” due to information asymmetries .

Peter Drucker 1985 An act of innovation that involves endowing existing resources
with new wealth-producing capacity.

A few more influential entrepreneurship scholars include: J. H. von Thunen (1785-l 868),

Leon Walras (1834-l 910), Alfred Marshall (1842-l 924), Frank Knight (1885-I 972), Ludwig

von Mises (188 l-l 972), and Harvey Leibenstein (Bull and Willard, 1993, p.185). However,

none of these thinkers distinguished between entrepreneurs operating in different

business environments or considered differences between entrepreneurship in wealthy

and poor countries at various stages in economic history Lingelbach et al. (2004, p.2).

19
Therefore this study is one of a relatively few, augmenting the knowledge within this

emerging field of academia.

Of the entrepreneurial concepts found within Table 1, Schumpeter’s is perhaps the most

widely quoted and recognised – where new combinations are said to be the basis of

innovation and entrepreneurship (Dodgson, 2011, p.1119). Kirzner perspective stands as

a formidable challenge to the innovation based perspective. For Kirzner, entrepreneurship

is a non-innovating, cohesive, equilibrating force in whose absence the market economy

could not work. Thus, the entrepreneur as innovator is contrasted with the entrepreneur as

market arbitrager, two quite different takes on what entrepreneurship means; if one is

destructive, the other is constructive, yet in construction the conditions for further

destruction are created (Metcalfe, 2004, p.166).

2.2.3 Who are Entrepreneurs?

The latter section provided an academic overview of entrepreneurial activity but does not

tell us who these individuals are within a society and economy. Consequently, the

question posed within the subheading is now approached in a general global context, with

an emerging market perspective elaborated upon within the following subsection.

Due to their variance in nature across regions, a highly broad and encompassing

taxonomy of entrepreneurs has been adopted for this study. It is inclusive of:

Individuals who have established or are seeking to start-up and run: micro firms, small-to-

medium enterprises (SMEs), and large corporates alike. Whether formal or informal:

private, public and third sector activity is incorporated within this taxonomy. Market

arbitragers, inventors, innovators and imitator are also considered within this

entrepreneurial realm as well.

20
This classification of entrepreneurs is congruent with literary defintions of the term,

entrepreneur. Burns (2007, p.56) defines an entrepreneur as, “an individual who, through

personal drive and/or novel technical insights, is able to achieve significant growth for a

firm he or she owns for other providers of capital”. Bolton and Thompson (2003, p.322)

propose an entrepreneur to be “a person who habitually creates and innovates to build

something of recognised value around perceived opportunities”. And Herold (2010) simply

states, “A person who organises, operates and assumes the risk for a business venture.

It is this dissertation’s view that as well considered as these definitions maybe, they lack

consideration for the macro socioeconomic roles entrepreneurs play. Especially

considering that entrepreneurs were emphasised as economic actors and a driving force

for economic development by both Austrian economists, first by Joseph Schumpeter and

consequently by Israel Kirzner (Krauss et al., 2005, p.316; Austin et al., 2006, p.4; Minniti

and Lévesque, 2010, p.306). In addition they are also regarded as societal change agents

through their introduction of inventions, innovations and imitations (Ratten and Welpe,

2011, p.283; Chesbrough, 2003, p.8). Maak and Pless (2009, p.61) add to this

understanding of entrepreneurs by saying that these people are responsible for; the

environment, delivery of equal liberty as well as social and humanitarian justice.

Given the previous definitions of entrepreneurs, specifically Jean-Baptiste Say and

Joseph Schumpeter, entrepreneurs are also considered to be leaders within a given

group/community/population and within society as a whole. This is a notion supported by

Jensen and Luthans (2006, p.646) who argue that although the founder of a new venture

is most often called an entrepreneur, when this founder spearheads the development of

ideas and resources (especially human resources) into reality and success, then the

entrepreneur can also be considered a leader. Leadership is described by Van Vugt et al.

21
(2008, p.182) as: (a) influencing individuals to contribute to group goals and (b)

coordinating the pursuit of these goals. With Rankin’s (2006, p.4) describing leadership

as, “the product of millennia of human evolution, during which time the survival of the

human species depended on the ability of small groups of people to produce effective

leaders to provide, guide and defend them”.

Ultimately, for all intents and purposes - entrepreneurs are essentially said to be; “ideas

people, who seize an opportunity to generate value or well-being in society by providing

for unmet needs with a new product or service, or by carrying out an existing activity in a

novel or more efficient way – they assume organisational and risk responsibilities

throughout the process” (UNESCO and ILO, 2006, p.5).

2.2.4 Entrepreneurs in Developing Countries

Lingelbach et al. (2004) suggest that entrepreneurship in developing countries is

distinctive from that practiced in developed countries, and that understanding these

distinctions is critical to private sector development in developing countries. Less

economically developed countries’ (LEDCs) markets are often small, fragmented and

imperfect due to lack of infrastructure, low per capita incomes, misguided policies and

institutional constraints. The political stability, predictability and transparency, peace and

other institutional prerequisites for the functioning of markets are often absent (Naudé et

al., 2011, p.5).

As a result, countries with low per-capita income (e.g. Zimbabwe with $776 in 2011 [World

Bank, 2012]), have high nascent entrepreneurship rates, as do countries with high per-

capita income (e.g. United Kingdom with $38,818 in 2011 [World Bank, 2012]). Countries

in-between have the lowest nascent entrepreneurship rates, with the minimum occurring

at approximately $20,000 per-capita income (Vallier and Peterson, 2009, p.p.462). Given

22
the high nascent entrepreneurship rates and market layout of LEDCs, entrepreneurs’

offerings within this landscape (especially in southern Africa) ranges from a multitude of

micro-enterprises that provide marginal employment for a single individual to a small

number of large corporations employing hundreds of people; an assortment of businesses

span these extremes (i.e. a small, large-scale sector and a large, small-scale sector with a

‘missing middle’). The configuration includes informal and formal sector businesses,

traditional and modern, indigenous and foreign-owned enterprises geographically

dispersed in rural and urban areas (McDade and Spring, 2005, p.18-19). A recent study

by the IFC and McKinsey and Company suggests that there are close to 365-445 million

micro, small, and medium enterprises in emerging markets of which 25-30 million are

formal SMEs and 55-70 million are formal micro enterprises, while the rest (285-345

million) are informal enterprises and non-employer firms (IFC, 2010, p.6). In accordance

with the IFC and the European Union’s definition of an SME, Zimbabwe utilises the

criterion stated within the diagram below to measure firm size. Enterprises must meet at

least 2 of the 3 criteria to be classified within a given category.

Figure 2: SME Definition (IFC, 2010, p.89)

According to Grierson et al. (1997, p.305) most of these micro and small enterprises are

owned and operated by the historically disadvantaged indigenous groups who have

previously played limited roles in large and modern business. Wignaraja (2003) explains

how this lack of exposure could be a telling factor in the fact that LEDC SMEs are

increasingly under threat on domestic markets from cheap imports and the entry of foreign

firms.

23
The bulk of SMEs in southern Africa are usually clustered in industrial areas. In the city,

the industrial areas (called home industries or industrial hives) are mainly located near

high density housing areas. In rural areas, businesses are concentrated in so-called

growth points. Many businesses are not registered, do not appear in any listing, and have

no telephone line (Krauss et al., 2005, p.320). Although there is no conclusive definition of

the informal sector, what Krauss et al. (2005) describes is synonymous with the term.

McDade and Spring (2005, p.19) edify that term has been in existence since the 1970s.

Initially, it referred to unregistered, unregulated businesses, including service enterprises

(e.g. hairdressing, commercial transportation, auto repairing, etc.), production activities

(e.g. furniture, metal equipment manufacturing, etc.), and vending (e.g. food, clothing,

medicines, etc.). They continue on to say that the informal sector contributes 20 percent to

40 percent of total GDP in several African countries, and 40 percent to 60 percent of non-

agricultural GDP. However, in spite of support from donor agencies and non-

governmental agencies (NGOs) over the past 30 years, the expected growth and

transition of most informal sector MSEs into medium- or large-scale enterprises has not

occurred (McDade and Spring, 2005, p.20-21).

Jongwe (2011) adds to this understanding of informal sector activity as he speaks about a

tendency for emerging economies to over emphasise the virtues of trading as

symptomatic of entrepreneurial instincts in Africans. He argues that vast flea and

vegetable markets in Cairo, Casablanca, Accra, Nairobi, Lusaka, Harare and

Johannesburg cannot be credible litmus test for successful business as they do not

contribute to real economic development, therefore stating that merely trading should not

be viewed as entrepreneurship.

While entrepreneurs from rich countries need to come up with relatively more original

technological discoveries as they operate at the fringes of the economy (clos e to the

24
production possibility frontier), poorer country entrepreneurs operate closer to the core

and have a broad scope of opportunities to exploit. This is due to the large quantities of

unused resources which simply need to be mobilised to increase national wealth

(Lingelbach et al. 2004, p.3; Minniti and Lévesque, 2010, p.307). People from the poorest

developing countries are driven by poverty and survival, and lack of choice in work to start

business ventures, while in developed countries it is opportunity and innovation that is the

primary motivator for starting businesses (Rossa et al., 2006, p.2). In extreme cases (such

as Zimbabwe’s), market and non-market failures are pervasive, entrepreneurs are pushed

out of the formal sector into the micro informal sector. In less severe cases, large

diversified indigenous business groups have formed in many developing countries in

response to market failures (Acs and Virgill, 2009, p.27).

In this necessity scenario, two phenomena arise according to Rossa et al. (2006, p.3).

The first may drive people to survivalist pluriactivity, in which ephemeral pockets of

demand are exploited as they arise. When demand ceases, they will move on to some

other activity until that too ceases to be viable. This kind of pluriactivity is especially

related to seasonality in agricultural production, where products and services arise for

short periods only. The second phenomenon is one where once an enterprise is

embarked upon, there is no choice but to keep on with it. The entrepreneur only makes

sufficient money to live, but not enough to invest in starting another enterprise. The

entrepreneur becomes trapped. This would tend to apply theoretically more to

entrepreneurs outside the seasonal rural sector. Other than necessity-driven

entrepreneurs, there are also lifestyle entrepreneurs who Cheng et al. (2009, p.331)

recognise as having no real ambitions of growth as the entrepreneur operates to maintain

a preconceived standard of living.

That said, McDade and Spring (2005, p.17) unravel a community who describe

themselves as the ‘new generation of African entrepreneurs’. These entrepreneurs are

25
highly educated men and women who have prior work experience in formal sector firms in

Africa and elsewhere, and they have a global outlook. These individuals usually go to

constitute high-growth entrepreneurs. Cheng et al. (2009) talks on how these individuals

are similar in their attitudes and demographic characteristics to entrepreneurs

experiencing moderate rates of growth. However, one key difference is that high-growth

entrepreneurs are more likely to have started their businesses to increase their incomes.

Therefore, these individuals are deemed to be opportunity-driven rather than necessity or

survival oriented like the majority of African entrepreneurs. Vallier and Peterson (2009,

p.461) describe how this new generation or high-growth entrepreneurs start-up firms and

expect to employ at least 20 employees in a 5 year period. They are part of a mere 9.8

percent of the world’s entrepreneurs who expect to create almost 75 percent of the jobs

generated by new business ventures.

In the end, Kirzner’s definition of entrepreneurs as arbitragers who are willing to incur

upfront costs in the hope of realising profit expectations appears to be more befitting for

entrepreneurial activity found within emerging economies than Schumpeter’s innovation

based approach. Especially considering that Kirzner’s view is more inclusive of developing

country’s survival and imitative entrepreneurs i.e. individuals who increase product and

service availability as well as competition by replicating technologies or processes

developed elsewhere (Minniti and Lévesque, 2010, p.306). This Kirznerian perspective of

entrepreneurship within developing economies is shared by Chulu (2012) who affirms that

the nature of Zimbabwean entrepreneurs shows more ‘mark-up entrepreneurs’ who thrive

on identifying and exploiting arbitrage opportunities i.e. pricing differences and replicating

low capital cost products and services from foreign markets. The former author advocates

that in order for real socioeconomic growth and benefits to be realised – Zimbabwe and

other developing states need to transition from Kirznerian entrepreneurship to

Schumpeterian entrepreneurship.

26
2.3 Entrepreneurial Traits and Characteristics
In order to assist the quest of achieving economic and social prosperity through

entrepreneurs, identification and understanding of the psychological makeup and motives

of these individuals has been deemed to be an integral part of this study.

Mueller and Thomas, (2000, p.61) recognise that no single trait or characteristic defines

the entrepreneur, nor does it allow one to predict entrepreneurial behaviour or the

emergence of an entrepreneur. However, inhibiting the below entrepreneurial orientations

is said to have strong correlations to positive business performance (Krauss et al., 2005,

p.319). This makes these traits desirable within a nation’s human capital pool as the

accumulation of well performing businesses ultimately leads to a growing economy and an

accrual of social and technological benefits to the surrounding populous.

Entrepreneurial
Orientation

Learning Achievement Autonomy Com petitive Innovative Risk-taking Personal

Orientation Orientation Orientation Aggresiveness Orientation Orientation Initiative

A generally Proactive, self-

Seek Positive mind- positive starting, and
feedbacck, set tow ards stance persistant in
Learning from compare w ith Value their Assert new * ideas tow ards attempting to
positive as others, set ow n decision themselves, w ith regard to taking shape
w ell as challenging making and enjoy products, calculated environmental
negative goals and disllike competion services, risks is conditions.
experiencs is constantly try receiving and strive for administration mandatory in Persevere in
essential to improve orders victory or an spite of
their technological environment obstacles and
performance processes w here risks independent of
are inveitable external
encouragement

Figure 3: Entrepreneurial Orientation Related to Positive Business Performance (Adapted from Krauss
et al., 2005, pp.318-322)

*With regard to the innovative orientation, new ideas do not necessarily have to be absolute novelties, but should be new to
the relevant group, market and environment – therefore encompassing imitations.

27
Of the mentioned entrepreneurial orientations, risk taking is said to be crucial within the

setting up stage of a business. Without this orientation, entrepreneurial prospects are

significantly compromised. On this point, Puri and Robinson (2006, p.23) explain that

entrepreneurs differ from the rest of the population in terms of their attitudes toward risk

and their enjoyment of private benefits. They are significantly more tolerant of risk;

however this is attenuated by longer planning horizons and perhaps a greater

commitment to family and life outside work. Therefore, it is hardly fitting to think of them as

foolhardy risk-takers. Perhaps this is due to the cognitive bias of over optimism in their

approach to business and the environment they operate within (Lingelbach et al., 2004,

p.2).

Although it was established that the emergence of entrepreneurs cannot be predicted,

Sarasvathy (2003, p.3) states that, all entrepreneurs begin with three categories of

means:

(1) Who they are – their traits, tastes and abilities;

(2) What they know – their education, training, expertise, and experience;

(3) Whom they know – their social and professional networks.

These three constructs go to create a major part of an entrepreneur’s social capital, with

Svendsen et al. (2010, p.631) broadly defining this as “network cooperation based on trust

and regular face-to-face interaction”. Therefore, their reputation as a result of means (1)

and (2), leads to the establishment or access to key networks of people (3) e.g. venture

capitalist or potential customers. With Baron and Markman (2003, p.42) finding that an

entrepreneur’s social competence (another derivative of means [1] and [2]) then plays the

key role in determining the outcomes they experience e.g. whether they obtain financing

or attract key employees.

28
The theory is that entrepreneurs must be jacks-of-all-trades who need not excel in any

one skill but are competent in many. Those who have varied work and educational

backgrounds are much more likely to start their own businesses than those who have

focused on specific roles at work and within education as one has to be sufficiently skilled

in a variety of areas to put together the many ingredients required to create a successful

business (Lazear, 2005, pp.640; 679). These are sentiments echoed by Kilby and a

number of his followers who argue that the effectiveness of entrepreneurship is often

determined by the entrepreneur's ability to organise, and perhaps perform, disparate

functions associated with setting up and operating a business (Huff, 1989, p.88).

Mueller and Thomas (2000, p.54) provides a motivational perspective to the new venture

initiation process stating that it often occurs as a result of situational pushes or pulls that

include job loss, identified opportunity, frustration with present life-style, childhood, family

environment, education, age, work history, role models, and support networks. Career

analyst Dan Pink notes how intrinsic motivators (autonomy, mastery and purpose) nurture

a higher level of creativity and productivity than those brought about by extrinsic factors

(e.g. financial rewards or consequential reprimand). A desire to do things because they

matter, because we like it, because they are interesting, because they are part of

something important – these factors are greater motives for the generation of solutions to

complex individual, organisational, economic and societal problems (Pink, 2009). In other

words individuals who pursue these motives are more likely to be the desirable innovative

entrepreneurs Schumpeter identified in his work.

29
2.3.1 Within a Developing Country

As entrepreneurs within developing countries tend to emerge as a result of necessity

rather than opportunity, it could be assumed characteristics and traits previously alluded

to as being necessary or crucial for enterprising activities may not be inhibited within a

large proportion of the existing entrepreneurial population. Perhaps this could explain the

stunted economic and social benefits arising from the current Zimbabwean construct. In

slight contrast to this proposed notion, Krauss et al. (2005, p.332) found that Zimbabwean

business owners showed a higher entrepreneurial orientation than those in neighbouring

countries, including more economically advanced South Africa. In addition to this

Zimbabwean entrepreneurs were deemed to be more likely to create employment, but

business growth prospects/orientations within all ten studied southern African regions was

found to be very low.

30
2.4 Results of Entrepreneurship
Nyambayo (2008) advocates for the establishment of enterprising organisations as being

of paramount economic and strategic importance due to the fact that they create wealth

and improve the wellbeing of the citizens through the creation of jobs and provision of

goods and services. Minniti and Leveque’s (2010) research has also argued that

entrepreneurs are critical for growth, both through exploitation of innovation and through

purely imitative ventures that harness under-used resources. With UNESCO and the ILO

(2006, p.5) positing that entrepreneurship is one of the principal factors in whether

developing communities can successfully overcome the difficulties that globalisation has

created. On the other hand, Vallier and Peterson (2009, p.460) pose a slightly less

optimistic perspective on the effects of entrepreneurship, stating that the causality

between entrepreneurial prevalence and economic growth has yet to be conclusively

established.

2.4.1 Economic Impact

Contrary to Vallier and Peterson (2009) Heinonen (2006) contends that entrepreneurship

is increasingly considered as a viable platform for economic growth and prosperity. Their

contribution to economic development is best measured in their contribution to a nation’s

gross domestic product (GDP) levels or GDP per capita. GDP is the most commonly used

single measure of a country's overall economic activity. It represents the total value of final

goods and services produced within a country during a specified time period, such as one

year (IMF, 2006). A study by the IFC (2010, p.6) indicates that formal SMEs contribute up

to 45 percent of employment and up to 33 percent of GDP in developing economies -

these numbers are significantly higher when taking into account the estimated

contributions of SMEs operating in the informal sector.

31
Certain types of entrepreneurs are being said to matter more than others when it comes to

fostering long-term economic growth. High-Impact/High-Growth/High-Expectation/Quality

entrepreneurs are the individuals that launch and lead companies with above average

impact in terms of job creation, wealth creation and the development of entrepreneurial

role models (Morris, 2011, p.2). Cheng et al. (2009, p.331) reiterate that the major share

of jobs is created by a relatively small number of ‘‘gazelle’’ small firms rather than by all

entrepreneurial small firms in general. In terms of business practices, high-growth

entrepreneurs (responsible for ‘gazelle’ firms) tend to work in partnership with other co-

owners and are more likely than average to have international customers – therefore

acting as a source of much needed foreign currency injection within a developing nation’s

financial system. These individuals are also noted as being more likely to become angel

investors. The abundance of such investors within an economy helps to facilitate the

emergence and growth of other high-growth and SME entrepreneurs, therefore creating a

self-perpetuating cycle.

Entrepreneurship is essential for development because in developing countries

entrepreneurs fill in important gaps through the mobilisation of factors such as capital and

specialised labour which incomplete and underdeveloped markets might not supply (Acs

and Virgill, 2009, p.26).

2.4.2 Economic Impact within a Developing Economy

Promoting entrepreneurship, particularly among small- and medium-sized enterprises

(SMEs), fosters more lasting, stable economic growth in the world's most vulnerable

economies according to Lemmon (2012). She continues to edify that boosting SME

growth has the power to diversify economies and make them far less vulnerable to sector-

specific shocks and fluctuations in private capital flows. Lingelbach et al. (2004, p.1)

32
supplements this body of knowledge informing that the wealth and poverty of developing

countries has been linked in modern times to the entrepreneurial nature of their

economies. Where it has existed in plenty, entrepreneurship has played an important role

in economic growth, innovation, and competitiveness and it may also play a role over time

in poverty alleviation.

In developed countries, a significant portion of economic growth rates can be attributed to

high-expectation entrepreneurs exploiting national investments in knowledge creation and

regulatory freedom. However, in emerging countries this effect is absent. It is

hypothesized that a threshold exists for entrepreneurs to gain access to the formal

economy, below which entrepreneurial contributions act through informal mechanisms

(Vallier and Peterson, 2009, p.459). Despite the economic growth entrepreneurship gives

yield to, the OECD (2011) cautions that growth alone is not enough for human

development. They state that growth must be broad-based and bring down high levels of

inequality as well.

2.4.3 Social Impact

As a result of the OECD’s call for growth to be more broad-based than merely economic,

this dissertation turns its attention to the social impacts of entrepreneurship. This is also in

line with research objective (b) stated within section 1.2. Evaluating social impact is

defined as gaining an understanding of the results of an action, activity, project,

programme or policy on various people - whether intended or unintended and noting any

social change process invoked by those interventions (IAIA, 2010).

Innovations and Social Practices

From a Schumpeterian perspective, the main propensity of entrepreneurs is, of course, to

innovate. Innovation, however, may take very simple forms and often consists merely in

33
filling a market niche that has not yet been exploited or that someone else has vacated. In

doing so, entrepreneurs provide people with much needed and unimagined goods and

services for use and enhancement of their day-to-day lives (Minniti and Lévesque, 2010,

p.306). More radical entrepreneurial innovations are said to have the ability to create and

destroy markets, render corporate giants extinct and transform small start-ups into

national or multinational superstars. In order to achieve these levels of success akin with

the development of radical innovations, Prabhu et al. (2010, p.5) found that entrepreneurs

simply require: an availability of capital, skilled labour, conducive government policies and

the formation of a complementary culture.

Ratten and Welpe (2011, p.283) posits that existing norms within business and society

expect entrepreneurs to be good citizens and that their products or services should be

community enhancing (Ratten and Welpe, 2011, p.283). Complimentarily and

contradictorily, MacKenzie and Wajcman (1999, p.3) assert that entrepreneurs give rise to

innovations which feed, clothe, and provide shelter for us; they transport, entertain, and

heal us; they provide the bases of wealth and of leisure; but they also pollute and kill. The

former authors conclude that, for good or ill, entrepreneurs’ market offerings are woven

inextricably into the fabric of our lives.

Society, which is defined by the Oxford Dictionary of English, (2010) as “the aggregate of

people living together in a more or less ordered community”, is changed through

embedded expectations about how its constituents should behave. Within these

embedded expectations entrepreneurs are seen as change agents through their

introduction of inventions, innovations or imitations – as was seen in the introduction of

the telephone, automobile and personal computer - these disruptive innovations changed

social practices (Chesbrough, 2003) e.g. how the television destroyed the cinema industry

in the 1930s and the refrigerator’s effect on the patterns of household living but to cite a

few examples (Metclafe, 2004, p.162). Disruptive innovations and their ensuing change in

34
social practices are described by Geels (2002, p.1257;1260) as a Technological

Transitions (TT). Whereby, TTs are defined as major, long-term technological changes in

the way societal functions are fulfilled. TTs do not only involve changes in technology, but

also changes in user practices, regulation, industrial networks, infrastructure and symbolic

meaning or culture.

Job Creation

In addition to the mentioned innovative impacts brought about by entrepreneurs, they

have also been mentioned and known to be a vital source of job creation. Because of their

ties to the territory, local entrepreneurs tend to create jobs rooted in the social, cultural

and environmental needs of where they live (UNESCO and ILO, 2006, p.7). With the

provision of the right type of jobs allowing the citizens of a population to improve their

standards of living through the earning of wages, jobs also provide an important source of

individual and national happiness. Vasconcelos (2007, p.1248-1249) informs that

supplementary to providing structure and purpose to people’s lives, a variety of jobs within

a market provides individuals with the possibilities of doing something they believe in, do it

well, the potential to get promoted or receive salary increases and is therefore recognised

as a major source of happiness.

Lead

As creators of jobs, entrepreneurs have already been noted within section 2.2 as bona

fide leaders who (a) influence individuals to contribute to group goals and (b) coordinating

the pursuit of these goals (Van Vugt et al., 2008, p.182) i.e. they provide guidance and

direction to the rest of society, helping to advance the human race. Seeing as societal

patterns are noted to; often lag behind the constantly changing environment.

Entrepreneurs bridge this gap by seeking new ways of doing business and enhance

societal adaptation towards the changing environment. This process of destroying old

patterns and replacing them with new ones is usually not revolutionary, but instead

involves the accumulation of numerous small adjustments. The degree of change

35
entrepreneurs bring about in any particular society reflects the extent which

entrepreneurship is legitimated in that society (Etzioni, 1987, p.175).

Sustainability

With many states in developing regions proving to be unjust, weak and unable to secure

descent standards of living for their inhabitants Maak and Pless (2009, p.61) regard

entrepreneurs as societal leaders who are responsible for the upkeep and wellbeing of the

immediate environment and its community. With regard to community, large firm

entrepreneurs are also deemed to be responsible for the delivery of equal liberty as well

as social and humanitarian justice. Furthermore, as a result of mounting global

environmental and societal pressures, entrepreneurs are growingly expected to conduct

their business activities in more sustainable ways. This is because economic growth

cannot take place in the long term without social stability, maintaining a decent quality of

life for all and caring for the environment (UNESCO and ILO, 2006, p.7). This in turn rests

on finding a balance between economic objectives, environmental pressures and

changing societal expectations (Robinson, 2000). Otherwise known as adopting

Elkington’s (1998) Triple Bottom Line concept (TBL), which is a fast growing business

practice (especially in developed economies) where firms operate with the objective of

satisfying the three P’s: people, profits, planet (Crews, 2010, p.15). This is also commonly

referred to as adopting a corporate social responsibility (CSR) strategy within the

operations of a firm.

Tremayne (2009) argues that sustainability isn’t only about saving the planet. It’s about

saving one’s business. Conducting business in a sustainable manner means that a

business can spend less in the long-term and yet increase revenue. She continues to say

that, while sustainability does help the planet, the incentive of reducing business costs by

half is a strong reason why business leaders should not only consider but adopt a

36
sustainable business model. As eventually, sustainable business will just be called

business.

Social Elements

The societal expectation on businesses can be linked to the notion of social capital, which

in this instance is considered as an ‘‘investment in social relations with expected returns in

the marketplace’’ (Maak, 2007, p332). Investment in social relations could take the form of

funding or providing roads, schools, hospitals or charities but to mention a few with an

expected return in an increased business patronage to the donor firm. However, third

sector entrepreneurs’ fulfil social needs or requirements with no expected or intended

return on their investment. This form of entrepreneurship therefore helps raise the

standard of living of lower income members of a society and as result unifying a nation’s

populous

Social entrepreneurship and community-based entrepreneurship have been referred to as

being part of the third sector, which is membership-based and not part of the government

(Ratten and Welpe, 2011, p.285). This form of entrepreneurship, or entrepreneurial

activity with an embedded social purpose, has been on the rise in recent decades –

particularly in developed economies. However, it is still emerging as an area for academic

inquiry. Common across all definitions of social entrepreneurship is the fact that the

underlying drive for social entrepreneurship is to create social value, rather than personal

and shareholder wealth. It is driven by a social problem or need that an individual or a

group seek to address and can occur within the commercial sector, non-profit sector and

government sector alike. Note that the distinction between social and commercial

entrepreneurship is not dichotomous, but rather more accurately conceptualised as a

continuum ranging from purely social to purely economic. Even at the extremes, however,

there are still elements of both (Austin et al., 2006, pp.2;3).

37
2.4.4 Social Impact within a Developing Country

Pedersen (1992, p.57) argues that development based on local independent enterprises

tends to be more stable. The independent enterprises tend to be more integrated into the

local economy and thus have larger derived effects. More of both the profit and the

technological capacity developed in the production tend to stay in the region. However,

especially in developing regions with little tradition for entrepreneurship and little local

capital accumulation, a development based on local enterprises alone may be very slow.

Which is why, although the benefits of promoting small-scale enterprise with indigenous

entrepreneurship as its dynamic element is among the most frequently voiced ideas in

less developed countries as a means to attaining economic growth and its ensuing

societal benefits. Huff (1989, p.91) contends that a greater recourse towards multinational

enterprise has been observed and is believed to be more economically and socially

advantageous.

.As economically stimulating as Huff’s recommendation for focusing on spurring

multinational activity maybe, this dissertation argues that it neglects the range of tangible

and intangible benefits indigenous entrepreneurship brings about. For example, the

heightened sense of national sovereignty which can be linked to the overall happiness of

a population. In addition, revenues and profits remain within the Zimbabwean financial

system and thus facilitating the success of other local enterprises rather than having the

same money being remitted to foreign headquarters and aiding other economies. At the

end of the day this dissertation advocates for a balance between the foreign owned

multinationals and privately owned indigenous firms.

These are sentiments shared by Naude et al. (2011, p.5) who suggest that tentative

conclusion one might derive from this interesting debate is that absorptive capacity and

38
capacity for upgrading depends on some kind of appropriate balance between privately-

owned and foreign-owned enterprises. Where foreign-owned firms predominate and large

privately-owned indigenous enterprises and entrepreneurs are weak or absent, the

country may be hampered in its technological and economic development. Furthermore, it

is not only the large firms, but also a dynamic sub-set of firms in the SME sector which

can make positive contributions to innovation and catch up.

39
2.5 Supporting Socially and Economic Enhancing

Entrepreneurship

2.5.1 Overview on Supporting Entrepreneurship

Nurturing and supporting entrepreneurs is heralded by Nyambayo (2008) as the key for

LEDCs to respond to the opportunities, challenges, risks and limitations of the global

market we live within. Kirzner (1978) asserts that to induce dynamic entrepreneurial

activity and competition, the fulfilment of only one condition is required: “guaranteeing free

entrepreneurial entry into any market where profit opportunities may be perceived to exist”

(Acs and Virgill, 2009, p.34). This, however, may be an oversimplification of the reality that

is required to support socially and economically enhancing entrepreneurship. With

economic geographers such as Bruno and Tyebjee (1982) presenting the following twelve

local environment factors as major determinants in the role and success of entrepreneurial

endeavours (cited from: Bolton and Thompson, 2004, p.317-318):

“venture capital availability, presence of experienced entrepreneurs, technically skilled

workforce, accessibility of suppliers, accessibility of customers or new markets, favourable

government policies, proximity of universities, availability of land or facilities, accessibility

to transport, receptive population, availability of supporting services and attractive living

conditions”.

Acs and Virgill (2009, p.9) also identified; capital formation through national savings,

foreign investment or foreign aid; policies which encourage entrepreneurship and skill

development; the increase in international trade; and the introduction of market distortions

through social policy as important factors which affect economic development. And Naude

et al. (2011, p.6) discusses the innovation system that gave rise to rapid growth in

technological entrepreneurship in India as consisting of five broad facilitating factors.

40
(1) Liberalisation of the economy therefore creating many new market opportunities.

(2) A general increase in financial resources for innovation and entrepreneurship,

including in particular venture capital.

(3) More government support programmes and public–private partnerships.

(4) Emergence of private institutions and initiatives to complement government support

programmes for innovation.

(5) Increased availability of skilled labour essential for high-tech products and services.

Another concise list for supporting entrepreneurship is given by the World

Entrepreneurship Forum (2008) who developed nine key areas of focus required to create

an entrepreneurial spirit within any given country. Table 2 provides an overview of the

areas for consideration and an annotated version of these areas of focus can be found as

Appendix 9.1.

Table 2: Promoting Entrepreneurial Spirit (The World Entrepreneurship Forum, 2008)

Reform Regulations Create New “Entrepreneur Promote Proper Governance

Friendly” Institutions

Create and Early Education Foster Positive Entrepreneurial Develop Young Adult Curricula
Entrepreneurial Curricula Attitudes

Promote Lifelong Empower Entrepreneurial Understand Entrepreneurship

Entrepreneurial Education Women, Minorities and the
Disadvantaged

Finally, Wignaraja (2003) of the Organisation for Economic Co-Operation and

Development (OECD) speaks of experience suggesting that efforts to promote SME

competitiveness vary considerably between developing countries but good practice

41
strategies seem to emphasise common elements. These common elements of good

practice strategies can also be found within the appendices as Appendix 9.2.

Considering: the feasibility of thoroughly covering this expansive range of factors within

the constraints of this dissertation; the need for prioritisation within developing nations due

to a shortage of resources; and the reoccurrence of the following factors within literature

and their overarching encompassment of multiple factors – four thematic areas of focus

have been identified to being crucial to supporting socio-economic enhancing

entrepreneurship. These key areas are; policy and regulation, financing, training and

education as well as creating an entrepreneurial culture.

2.5.2 Policies and Regulation

In their eagerness to jump-start entrepreneurial activity, governments frequently race to

hand out capital, Lerner (2010) writes. “This is equivalent to serving the main course

before setting the table, and unlikely to lead to a successful dinner party.” Instead,

governments are advised to effectively foster the entrepreneurial sector through policies

that create an overall climate conducive to entrepreneurship and venture capital

(Mangersdorf, 2010). Acs and Vigill (2009, p.14) point out that governments can be

tempted to practice state guidance of the economy and its pool of entrepreneurial talent,

but must be weary of preventing chosen firms, business activities or industries from

achieving commercial success as a result of activities being constrained by bureaucrats

with little market experience. Which is why, Kerr and Nanda (2010) go on to argue that

providing a support program for targeted sectors or companies is akin to ‘picking winners

ex ante’. Governments are unequivocally told not to pick winners and focus on picking the

right system.

42
Puri and Robinson’s (2006, p.4) evidence indicates that the ramifications of policy

initiatives to spur entrepreneurship will vary considerably based on whether the initiatives

target new business creation or existing small business. In an effort to minimise the

resulting differences SME owners are advocated by Wignaraja (2003) to play an active

role in the development of a strategy for SME growth and competitiveness. Having

undergone the process of establishing their own firms these individuals will be able to help

direct and balance complimentary policies between existing and nascent entrepreneurs.

This pro-active role can also include advocating the case for small business; helping

government to plug information gaps through participation in national policy making

bodies; helping weaker firms to help themselves via creating industry-specific training

centres and other actions; and investing in upgrading the capacity of SME associations.

Kramarenko et al. (2010, p.2) report that Zimbabwe’s economy has started to grow thanks

to improvements in economic policies, that said, important policy challenges and

significant vulnerabilities still remain to be addressed. Recognising the importance of

complementary policies, and the need for appropriate incentives for entrepreneurs to

innovate allows one to identify why well-meaning donor and development organisation

policies often fail to encourage innovation let alone entrepreneurial activity (Naude et al,

2011, p.5). It is advised that rapid and sustained economic growth in the most successful

developing countries have involved a process of late industrialisation in which the

production structure has shifted from the primary sector to manufacturing alongside a

progressive move from less to more technology- and capital intensive activities both within

and across sectors, allowing countries to build competitiveness in a range of activities

established in more advanced countries (Acs and Virgill, 200 p.22)

Huff (1989, p.93) reports that in many LEDCs, the potentially best entrepreneurial talent

will probably continue to be attracted to multinationals and government employment so

long as both offer 'greater security and financial rewards than establishing a firm in the

43
private sector would. In the case of Zimbabwe, this reality is evident within Figure 4 where

the country is noted to have among the highest civil servant wage expenditure in

comparison to GDP – characteristic of high levels of public sector employment.

Figure 4: Sub-Saharan Africa - Civil Servant Wages (IMF, 2011, p.16)

With governments worldwide already being identified as sinking large amounts of capital

in the pursuit of policies that, lacking such understanding, may have little if any effect on

the macroeconomic conditions of a country (Minniti and Lévesque, 2010, p.307). This

dissertation recommends Zimbabwe and any other developing nation not currently

working with the Global Entrepreneurship Monitor (GEM) to seek the establishment of a

working relation with the organisation. This call is made as liaising with this organisation

provides another means of alleviating the information asymmetries that occur when

developing entrepreneurial specific policies and legislation. This is because the GEM

44
project is an annual assessment of the entrepreneurial activity, aspirations and attitudes of

individuals across a wide range of countries. With nearly 100 national teams across the

globe, liaising with such an organisation could help Zimbabwean policy makers gain

greater insights on how to best nurture entrepreneurial activity within the country. This

assertion is steeped in the program’s three main objectives (GEM, 2012):

• To measure differences in the level of entrepreneurial activity between countries ,

• To uncover factors leading to appropriate levels of entrepreneurship,

• To suggest policies that may enhance the national level of entrepreneurial activity.

Such an understanding of the population could help governments unlock and enable a

greater percentage of its population to realise their entrepreneurial potential i.e. move

them along the entrepreneur axis.

Figure 5: The Entrepreneur Axis (Bolton and Thompson, 2004, p.316)

Figure 5, from Bolton and Thompson (2004, p.316-317), positions entrepreneurs along the

horizontal axis according to what might be called their ‘entrepreneurial energy i.e. the

strength of the entrepreneur’s temperament – the inner- and outer-ego character (intrinsic

factors). The diagram shows that a large contingent of a nation’s entrepreneurs/potential

entrepreneurs lies dormant due to a lack of conducive environmental factors. Therefore it

45
is propositioned that removing barriers or aiding individuals discover their entrepreneurial

potential will lead to a significant increase in the amount of entrepreneurs, entrepreneurial

activity, ultimately improving economic and social standings. Acs and Virgill. (2009) imply

that this transition needs to include a move from necessity entrepreneurship within the

population to opportunity entrepreneurship in as this is where the true economic prosperity

is derived from.

Would-be indigenous entrepreneurs just need readily-available capital according to

Jongwe (2012) and that is where government can come in handy, by helping these

entrepreneurs with the capital. Looked at from this perspective, governments therefore

need to establish a pool of government-guaranteed loans which form the foundation for a

lively small business sector (Jongwe, 2011). In order for governments to abstain from,

‘trying to pick winners’ as Kerr and Nanda (2010) strongly advised them not to do – these

loans should be made available through the financial services sector. The African

Economic Outlook report by the OECD (2011) recommends that African countries put in

place development policies that promote different economic sectors and reduce reliance

on commodities such as cash crops and minerals to address the challenges of market and

price volatility as well as generate higher margins of return - therefore significantly raising

GDP per capita levels.

Tax and Regulatory Reform

Zimbabwe has consistently come under fire for its high tax code which in most cases is

above regional levels. There is need for the government to continually reform the tax

policies so that they promote small business growth. Year-in-year-out, the

Competitiveness Report assesses these regulations and Zimbabwe has been found to be

wanting in regulations relating to obtaining business licences and permits as well as the

cost of registering a new business. It is important that the government comes up with

simpler and more expedited regulatory processes which foster the likelihood of small

46
business expansion (Jongwe, 2011). This form of regulatory reform should be adopted as

a continual process with policy makers in developed economies being noted for

successfully nurturing and supporting entrepreneurship through such means. Noteworthy

examples, developing states could aspire to replicate include Actal in the Netherlands and

the Better Regulation Executive in the United Kingdom as these organisations not

routinely asses existing regulations but also pay increasing attention to managing the flow

of new regulations (World Bank and IFC, 2012, p.8).

Intellectual Property

Another area in which government can promote entrepreneurship is by protecting

intellectual property. According to the economic perspective on entrepreneurship,

innovation is at the very heart of small-business growth but if innovations are not legally

protected then entrepreneurs will be unlikely to engage in the risks necessary to invent

new solutions to societal problems. It is there critical that policies which protect patents,

copyrights and trademarks are crafted. Notwithstanding this, the resource-based view also

instructs countries to leverage on those resources which are unique to them and are not

easily imitable to competition (Jongwe, 2011).

Corruption

This study recognises that merely developing policies and initiatives is merely not enough

to guarantee the proliferation of entrepreneurs. Underlying issues such as corruption and

inefficiencies need to be addressed for the entrepreneur enhancing endeavours to pay

dividend.

In particular, Campos et al., (1999, p.1061) found that:

(a) Countries with high levels of corruption and low predictability (e.g. numerous

government officials in different locations with various demands and in need of varying

payoffs) are the worst off in terms of attracting private investment;

47
(b) Countries with high levels but greater predictability (e.g. one government official

requiring a one off payment) are better off than those in (a) in terms of attracting relatively

higher levels of private investment;

(c) Countries with low levels of corruption and high predictability are the best off.

Campos et al. (1999, p.1059) conclude that tight fiscal situations within developed nations

have made donor countries focus more on the impact of their aid to developing countries

and more reluctant to part with money to corrupt governments or systems.

Imports and Exports

Developing countries seem to have underestimated the effects of intense global

competition on their SME sectors and in general SMEs, institutions, behavioural patterns

and policy frameworks seem ill adapted to deal with the challenge of global competition

(Wignaraja, 2003). Hence, the United Nations Conference on Trade and Development

[UNCTD] (2002) calls for government officials to develop adequate national transport

networks, efficient transit systems, promote regional or sub-regional economic integration

and encouraging foreign direct investment in economic activities that are not distance

sensitive. These areas for policy review are in consideration of the land-locked nature of

Zimbabwe and therefore highlighting the importance of distribution related policies to the

success of import and export based entrepreneurs.

International trade, in particular - exports make it possible for developing countries to

overcome the limitations of their domestic markets in exploiting economies of scale,

ensuring full capacity utilisation, poverty reduction and attaining economic growth. Trade

allows for a more efficient use of resources and exposes domestic

producers/entrepreneurs to larger, more competitive markets which encourages

productivity improvements (Acs and Vigill, 2009, p.17;20-22). Emphasis should be made

for entrepreneurs to focus production on high or added value goods as these allow for

48
greater margins, reduced price volatility and ultimately raise national income per capita

levels.

Diasporans

There are 3.4 million Zimbabweans living abroad sending back between US$50 million

and US$60 million each month to keeps many households afloat (Passport GMID, 2012).

This vast array of diasporans with disposable income, varied cultural knowledge and ideas

could be better utilised to provide more than money for their family’s upkeep. However,

Zimbabweans living abroad say they are concerned over the absence of a framework to

promote investment into the country (The Zimbabwean, 2012). With the implementation of

appropriate legislative framework individuals in the diaspora could become a much

needed source for entrepreneurial funding and investment – having been identified by

Riddle and Brinkerhoff (2011, p.670) as first-mover foreign investors into uncertain

political and economic climates. Ultimately policymakers should be seeking to create an

environment that entices diasporans to return to their country of origin to start-up business

ventures. This will not only help raise GDP levels, increase employment but more

importantly will introduce new ideas from the foreign countries they have resided within

and help change society’s role expectations of the government, suppliers, and buyers

(Riddle and Brinkerhoff, 2011, p.670).

The same authors adumbrate how some diasporans create manufacturing facilities in their

country of origin, producing goods for local and/or export sale, or establish subsidiaries for

businesses based in other countries. Others set up service operations, such as

restaurants, retail chains, consulting companies, or tourism-oriented enterprises. Diaspora

entrepreneurs often possess unique market and operational knowledge, transnational

social ties, and identification with the homeland. Therefore it is important for developing

countries to seek creative ways of promoting diaspora homeland entrepreneurship and

investment.

49
2.5.3 Training and Education

There is little doubt that training in basic business skills (e.g. literacy and accounting) is an

essential first step that many informal entrepreneurs need which is usually provided by

many NGOs as a means to safeguard their investment i.e. increase the credit worthiness

of their clients and improve the chances of long-term business success (Chamlee-Wright,

2005, p.6). However, with a dilapidated educational system and limited non-governmental

organisation (NGO) activity/assistance within Zimbabwe, there clearly are voids within the

support informal and formal entrepreneurs are able to access. This is extremely

detrimental to development considering Chamlee-Wright continues to speak of a need for

business training that stresses the qualities of creativity, innovation, market discovery, and

strategies that anticipate likely changes in the economic environment, rather than the

already lacking rudimentary approach.

The potential effectiveness of entrepreneurship education for secondary school youth

should be measured not just in terms of the acquisition of entrepreneurial skills, but

in increased motivation, contribution to learning, development of creativity, self-confidence

in different aspects of school life and in preparation for post-secondary pathways, the

world of work and beyond (UNESCO and ILO, 2006, p.6). For the entrepreneur the

educational and training activities are the beginning of the journey and should be seen as

such. The much needed courses in entrepreneurship can be placed in one of the following

three categories according to Bolton and Thompson (2004, p.321-323):

• Entrepreneurship as a subject –majority of courses are in this category. Traditional

business school courses with an entrepreneurial spin. Cover all key areas from economic

development to business plan preparation with a major focus on the entrepreneur.

• Entrepreneurship as an activity – talk about entrepreneurship but are also designed for

nascent entrepreneurs. A range of topics in entrepreneurship are taught but the focus is in

50
the preparation of a viable business plan. Good at revealing the entrepreneurs although

they can be an air of unreality depending if the business plans are ‘for real’.

• Entrepreneur enabling – not as extensive as ‘subject based’ courses these enabling

programmes are concerned with potential entrepreneurs and how their talent can be

identified, their temperament managed and their technique developed. They are t found in

universities and the employment sector, both public and private.

Creativity expert Sir Ken Robinson challenges the way children are educated. He

champions a radical rethink of school systems, to cultivate creativity and acknowledge

multiple types of intelligence. He contends that nurturing creativity amongst children is

now as important as teaching literacy. Current systems educate people out of creativity

through demonising its process which often entails failure. Robinson states; “If you’re not

prepared to be wrong, you’ll never come up with anything original” (Robinson, 2006).

The former scholar proceeds to explain how almost every educational system on the earth

has the same hierarchy of subjects; with mathematics and languages at the top, then

humanities and science followed by the arts at the bottom. Current education system is

predicated on the idea of academic ability. This is due to the fact that there were no public

systems for education, really, before the 19th century. They all came into being to meet the

needs of industrialism. Therefore the most useful subjects for work are at the top of the

curriculum and society is benignly shied away from things we like, excel at or that do not

lead to gainful employment. These industrialist systems are present in former colonial

countries such as Zimbabwe and a fundamental cause for stunted entrepreneurial activity

amongst the populous. Thus, the author joins Robinson’s (2006) call for an overhaul of

this outdated educational system, incorporating entrepreneurial education into the

curriculum from an early stage. These are sentiments echoed within Munyavi’s (2012)

writing where he speaks about the Zimbabwean education system being inherited from

colonial era and states that it has never evolved to reflect the growing needs and

51
aspirations of the people. A curriculum that nurtures and supports entrepreneurship from

primary school level to university needs to be drafted and implemented. Sowing the seed

now will allow it to germinate and bear fruits in the generations to come. From the current

general curriculum one can glean that the topic of entrepreneurship is lacking and/or

barely mentioned. Basic business and money management skills are taught at A-Level

such as Accounting, Management of Business or Business Studies but with the silent

implication that students need to finish their education and get a job, and that is the

ultimate achievement (Munyavi, 2012).

Naude et al. (2011, p.5) express that innovation requires not only highly knowledgeable,

experienced and skilled entrepreneurs, but also highly-skilled labour. Thus, educational

policies and capability-building are important public policies that require special attention

Learning from positive as well as negative experiences is essential for successful

entrepreneurial behaviour. Learning implies the development of more adequate mental

models and is crucial to making successful decisions (Krauss et al, 2005, p.319).

Therefore with the proliferation of entrepreneurs, aspiring entrepreneurs will be able to

learn from the mistakes and successes of fellow countrymen and ultimately helping the

progression of overall entrepreneurial activity.

2.5.4 Financing

As identified by the International Finance Corporation (2010, p.17) there are a variety of

financial services (credit, savings, insurance, and payment facilities) that are crucial for

growth in the SME life cycle; however, the focus of this dissertation is on expanding

knowledge on the access to finance. This is due to the fact that low-income countries can

strengthen overall economic stability and spur growth by building stronger and more

diversified financial and banking sectors, according to a new policy paper from the

International Monetary Fund (Dabla-Norris, 2012).

52
Bank financing remains by and large the most important source of external finance to

existing and nascent SMEs (IFC, 2010, p.80). Unfortunately, many banks are very weak

and lend little according to Passport GMID (2012). In Zimbabwe, banks have traditionally

had an uneasy relationship with small businesses when it comes to advancing loans.

They have traditionally considered this sector to be ‘high risk' and have often demand

‘impossible' requirements such as immovable property as collateral for any loans.

However, this problem can be remedied by government guarantees of any loans

disbursed by these banks to small businesses (Jongwe, 2011).

Now in Zimbabwe, the government is in no financial position to guarantee any loans as it

is faced with massive budget deficits and the risk of these funds being utilised in corrupt

manners, runs extremely high. Consequently studies by the IMF (2010) indicate that small

firms rely on internal financing much more than large firms do, and that the likelihood of a

small firm having access to a bank loan in low-income countries is about a third of what it

is for a medium-sized firm, and less than half of what it is for a larger firm (IMF, 2010,

p.15). This is not surprising as an estimated 2.7 billion people in developing nations lack

access to basic formal financial services, such as savings or checking accounts, while

access to financial services is equally challenging for micro, small and medium sized

businesses. The largest share of the “unbanked” are said to live in Sub-Saharan Africa -

where only 12 percent banked (IFC, 2010, p.80).

Ultimately, the credit worthiness of many entrepreneurs proves to be the curtailing factor

in the setting up and growth of entrepreneurial ventures. Although Table 3 shows there to

be a range of sources of finance available to enterprising individuals, if it is not due to its

limited availability then access or knowledge of its existence prohibits its socioeconomic

enhancing use. Table 3 is an adaptation from Chittenden (2011) and highlights

conventional key sources of financing for business start-up and growth.

53
Table 3: SME Financing Options (Adapted from Chittenden, 2011; IMF, 2010)

Financing Option Elaboration

Bank Loans Excellent source of finance if an entrepreneur has suitable

security to borrow against or reliable earnings stream in
order to meet interest and loan repayments. Banks are
interested in ascertaining that the entrepreneur will be abl e
to meet loan and interest repayments.
Venture Capital Money gained from pension funds, major institutions,
universities and wealthy individuals and invested into
business on their behalf. Typically large sums of money
used to finance high technology entrepreneurial endeavours
with less than 1 percent of applicants receiving the financing
or investment. Venture capital funds usually seek high
returns on investment over a 3 to 5 year period.
Business Angels High net worth individuals looking for investment
opportunities .
Business Relationship Funding Equity based financing through strategic joint ventures and
alliances with larger corporates. This form of financing also
allows smaller firms access to greater expertise.
Grants This government based source of finance is the cheapest as
it usually does not require any repayments to be made .
However, requires governments to have the financial
resources and availed them for the entrepreneur’s industry
specific initiative.
Foreign Direct Investment The acquisition of at least 10 percent of the ordinary shares
or voting power in a public or private enterprise by non -
resident investors. Direct investment involves a lasting
interest in the management of an enterprise and includes
reinvestment of profits.
Equity Markets This form of finance is usually utilised as a growth vehicle
and entails floating the shares of an existing firm on the
stock exchange for investment from the general public.
Friends, Family and Entrepreneur’s Typically used at the infancy stages of a business or

personal resources product development stage as resources are usually very

small and limited.

54
Significant barriers, such as the gap between the formal financial sector and the mass of

informal entrepreneurs, continue to limit the potential of indigenous entrepreneurship.

Which is why micro lending programs that offer group loans, or so-called “solidarity loans”

have gained favour among development scholars, NGOs, international donors, national

governments and a few commercial banks (Chamlee-Wright, 2005, p.6). This is visible in

its inclusion within the IFC’s SME Finance Coverage (Figure 6).

Figure 6: SME Finance Coverage (IFC, 2010, p.20)

Foreign Aid

The only challenge about donor funding is that in most cases it pursues agendas of the

donors at the expense of nurturing creativity. This is not surprising as all such funding is

an extension of the foreign policy and foreign relations of the donor countries. However for

the recipient countries they are both positive and negative sides (UNESCO and ILO,

2006, p.1).

With Chamlee-Wright’s (2005, p.25) study suggesting that NGOs, donor agencies and

commercial organisations will be more successful in meeting their goals and those of

indigenous entrepreneurs if they are prepared to adjust to the local culture rather than

expect the culture to adapt to the development strategy.

55
However, “A race to attract the largest amounts of investment or aid from emerging

partners at any cost should be avoided,” said Emmanuel Nanadozie, Director of the

Economic Development at UNECA. “Africa needs more progress towards regional

integration and bigger markets to improve the bargaining power of African countries and

improve economic growth” (OECD, 2011). That is not to say that foreign aid is not

required but should be sought tactfully and with terms and conditions that help the

developing nation enable its entrepreneurs to bring about sovereignty, economic growth

and societal benefits. This call is made as poverty reduction and developmental

assistance over the past 30 years have been undertaken under the following assumptions

(Prahalad, 2010, pp.104):

 First, poor countries are poor because they lack the resources. Aid has, therefore,

been seen as a substitute for locally generated resources.

 Second, aid from rich countries to the governments of the poor countries for

specific projects (typically infrastructure) is believed to reduce poverty.

 Third, investments in education and health care might have the largest multipliers

per dollar of investment in economic development. As a result, aid has been

skewed to these sectors.

 It is only recently the development community is paying attention to the role of the

private sector and it wealth generators (entrepreneurs) as agents of poverty

reduction and developmental assistance.

For as little as USD $25, anyone around the world can evaluate business plans and

extend micro loans to Bottom of the Pyramid entrepreneurs through organisations such as

Kiva.org instead of providing typical charity donations.

56
2.5.5 Culture

Culture is increasingly acknowledged as a factor which can contribute to building an

entrepreneurial society as it is an important determinant of career preferences and helps

shape attitudes to risk-taking and reward. Developing an entrepreneurial culture and

fostering entrepreneurial attitudes and values should be moved high on government

agendas. Education and training (including lifelong training) in entrepreneurship and

creativity are the preferred instruments for encouraging entrepreneurial behaviour in

societies, and evidence suggests that such programmes can have an impact on

entrepreneurial activity and enterprise performance (OECD, 2004; Jongwe, 2011).

Hofstede (2012) describes culture as “the unwritten rules about how to be a good member

of the group” - but its core is hidden in unconscious values that change at a far slower rate

than the practices. Whilst Mueller and Thomas (2000, p.51) to culture as the underlying

system of values peculiar to a specific group or society, shapes the development of

certain personality traits and motivates individuals in a society to engage in behaviours

that may not be evident in other societies. Geert Hofstede (1980) constructed four distinct

dimensions of culture as an underlying framework to identify and explain differences in

cultural patterns observed across countries. Hofstede’s power distance, uncertainty

avoidance, individualism and masculinity dimensions define a specific set of values which

describe some aspect of culture and human activities. Although Hofstede did not specify

the relationship between culture and entrepreneurial activity per se, his culture dimensions

are useful in identifying the key elements of culture related to entrepreneurial orientation

(Mueller and Thomas, 2000, p.59).

In particular the contrast between individualism and collectivism is evaluated within

entrepreneurial literature as a means of understanding differences in the inclination of a

population engaging or not engaging in entrepreneurial activity and the kind of

57
entrepreneurial activities engaged in. Individualism pertains to societies in which social

ties and commitments are loose. Everyone is expected to look after himself or herself and

the immediate family. Collectivism, at the opposite pole from individualism, pertains to

societies in which people from birth onwards are integrated into strong, cohesive in groups

which throughout a lifetime continue to protect them in exchange for unquestioning loyalty

(Hofstede, 2012). Generally speaking, developing economies embody collectivist cultures

whereas developed states are typically individualistic in nature. That said - Bandura

(2005) edifies that cultures are dynamic and internally diverse systems not static

monoliths. Therefore, there are even greater individual differences among members within

cultures. For example, there are generational and socioeconomic differences in

communality in collectivistic cultures. Where the younger, higher educated, and more

affluent members of these societies are said to be adopting individualistic orientations

(Bandura, 2005, p.32).

Tiessen (1997, p.368) reassess the belief that individualist cultures are more

entrepreneurial than collective ones. He edifies that variety generation requires mostly

individual creativity and initiative; resource leverage depends on efficient relationships that

thrive under collectivism, but can be induced contractually between individualists. These

differences reveal that individualism and collectivism neither categorically encourage nor

discourage entrepreneurship; rather they influence how its functions are accomplished.

Whereby, individualists are claimed to produce breakthroughs that collectivists implement

and improve upon.

Recognising that culture appears to condition potential for entrepreneurship, generating

differences across national and regional boundaries - Mueller and Thomas (2000, p.52)

tentatively concluded that a “supportive” national culture will, ceteris paribus, increase the

entrepreneurial potential of a country. This suggests that in addition to support from

political, social, and business leaders, there needs to be a supportive culture to cultivate

58
the mind and character of the potential entrepreneur. To be motivated to act, potential

entrepreneurs must perceive themselves as capable and psychologically equipped to face

the challenges of a global, competitive marketplace. The former authors note that

business education from a young age can play an important role in this regard by

providing not only the technical tools (i.e. accounting, marketing, finance, etc.), but by also

helping to reorient individuals toward self-reliance, independent action, creativity, and

flexible thinking. This is a point previously eluded to within the training and education

section of this dissertation, where promoting and nurturing entrepreneurship from a young

age within schools truly goes towards creating an everlasting or at least long-term

entrepreneurial culture as values and ambitions are typically determined early in life, they

tend to be “programmed” into individuals resulting in behaviour patterns which are

consistent with the cultural context they exist in and endure over time (Mueller and

Thomas, 2000, p.58). UNESCO and ILO (2006, p.6) go on to say that stimulating an

entrepreneurial spirit is not only about business and making profit; it is also about the

connections to community well-being, poverty reduction and sustainable

Therefore in our search to nurture entrepreneurship, there is a need to promote the

intrinsic benefits of entrepreneurial activity (autonomy, mastery and purpose) rather than

merely perceiving it as a means to potentially earn more money than if one were to be in

formal employment. The repetition of such sentiments from influential individuals, the

educational system and mass media could and would help a nation realise the true

benefits of pursuing an entrepreneurial path through life. This should help inspire a

significant shift of competent and creative individuals across the entrepreneurial axis

presented by Bolton and Thompson in section 2.3.

Unfortunately in Zimbabwean culture, it is often regarded as a sign of disrespect to

question the rationale of accepted practices. Often, such inquisitiveness is misconstrued

as an attack on the person or the powers that be. In cultures where individuals have a

59
question-to-answer ratio that is below one, ie, where individuals have more answers than

questions, Schumpeterian entrepreneurship is suffocated (Chulu, 2012).

Mauborgne and Kim of the Blue Ocean Strategy fame discovered, a set of four questions

which were constantly asked by serial innovators that created new profitable business

growth since 1880. Chulu presents their questions as a tool Zimbabweans should utilise to

progress from a Kirznernian entrepreneurship culture to a Schumpeterian culture. This

information can be found within Figure 8.

Chulu notes that many enterprises in Zimbabwe focus chiefly on the second question and

ignore the third and the fourth questions. Focusing on either the first or the second

question alone, ironically, will result in one innovating themselves out of business. It’s

simple really — introducing new value or enhancing value lifts the enterprises’ cost

curve. Successfully addressing the last two questions results in cost-reduction innovation.

This is what will drive up margins and compensate for the cost of new customer value

innovation and customer value enhancement.

Successfully answering results in value

What are the factors that industries have
innovation i.e. engineering new
never offered w hich must be introduced?
fundamental or intrinsic value for

Which factors does industry take for

Well thought out responses arms
granted and w hich ones could be raised
entrepreneurs with enhanced value
above current accepted standards?

Which factors is industry over delivering Calculated responses yield cost-reduction

on and therefore should be reduced? innovation – driving up margins

Which standards does industry critically Successful solutions lead to cost-

and habitually deliver upon that could be reduction innovation – compensating for
completely eliminated? the cost of new customer value innovation

60
Figure 7: Creating a Schumpeterian Entrepreneurial Culture (Adapted from Chulu, 2012)
3. Research

The primary research element of this dissertation draws upon ‘qualitative interviewing’

methods with information being gained from several face-to-face interviews held with

authoritative individuals within the Zimbabwean socioeconomic arena. The research was

undertaken to augment literary diagnosis of who entrepreneurs are, what they elicit on

society and its economy, and finally how they can best be supported within a Zimbabwean

context (research objectives [a], [b] and [c]). The collection of this data is a function of

there not being sufficient literary information focusing on Zimbabwean entrepreneurship to

arrive at a conclusive and holistic understanding of these individuals’ role within the

country, let alone how to support them.

3.1 Methodology
With qualitative research operating from the perspective that knowledge is situated and

contextual, and therefore the job of the interview is to ensure that the relevant contexts

are brought into focus so that situated knowledge can be produced. Qualitative

interviewing therefore tends to be seen as involving the construction or reconstruction of

knowledge, more than the excavation of it (Mason, 2002, p.62-63). Hunt (1989, p.14)

further goes to edify how the intended research is an interpretive enterprise mediated by

the subjective experience of both researcher and subjects. In accordance with the concept

of ‘reflexivity’, the researcher realises that they and the research methods used within this

study are unavoidably entangled in the politics and practices of the social world. The

subjectivity of the researcher within the analysis of information is duly not treated as a

problem to be avoided, but as a resource that can be developed in ways that augment

and intensify the social research (King and Horrock, 2011, p.126). As the researcher was

61
not only interested in what respondents said, but how they said it (Bryman and Bell, 2011,

p.467).

Having adopted a ‘relativist’ ontological position, the world is viewed as being unstructured

and diverse. Whereby, our understandings and experiences are relative to our specific

cultural and social frames of reference and as a result open to a range of interpretations.

This view is in line with the qualitative and social nature of this research and unlike a

‘realist’ perspective society is not viewed as a pre-existent ‘real’ entity with objects and

structures but is rather the product of people engaging with one another (King and

Horrock, 2011, p.9). This is complemented by an epistemological position which allows

that a legitimate and meaningful way to generate data on these ontological properties is to

talk interactively with people, to ask them questions, to listen to them, to gain acces s to

their accounts and articulations, or to analyse their use of language and construction of

discourse (Mason, 2002, p.63-64).

An inductive approach is also used in order to (1) to condense extensive and varied raw

data into a brief, summary format; (2) to establish clear links between the research

objectives and the summary findings derived from the raw data and (3) to develop a

theory about the underlying structure of experiences or processes which are evident in the

raw data (Thomas, 2003, p.2).

3.2 Interview Framework

A semi-structured interview framework was utilised to conduct hour long interviews with

each participant. This framework was decided upon on the merit that it allowed the

interviewer to document the interviewee’s experiences, knowledge, ideas and impressions

on aspects of the research project they felt were relevant and important (Alvesson, 2011,

62
p.3). Thus, allowing the discovery of issues that may have otherwise been unapparent to

the interviewer.

Upon providing an introduction of the interviewer and the intended study, consent to

audibly record and document the interview was sought. Due to the busy nature of the

respondents, the interviewer was granted interviewing times ranging from 45 minutes to

an hour. This time frame applied for all respondents except for interviewee C who initially

offered the same time period but insisted on continuing with the interview after the

specified time elapsed. The interview ended up being an hour and a half long. This may

create a bias in the level of information elicited from this individual in comparison to other

respondents, however, is still deemed to be equally as valuable as the thoughts and

opinions shared by the other parties. Kvale and Brinkmann (2009, p.178-179) identify

audio recordings as; the most common way of recording an interview, allowing the

interviewer to concentrate on the topic and dynamics of the interview, it also allows for re-

listening and analyses of words, tone and pauses. Considering the vast amount of

information that relayed during the interviews, this means of permanently recording the

dialogue was utilised in conjunction with note taking. Although if done excessively, may

interrupt the free flow of the conversation, writing down main aspects would prove handy

in the transcribing and analyses process.

Although words and sentences are exchanged in both directions, an interview is

essentially a one-way process. Otherwise if it were to be a two-way process of

communication (more like a genuine conversation), it would lose much of its value

because of the biases introduced by the interviewer (Oppenheim, 1992, p.66). Therefore,

the chosen framework required the interviewer to refrain from explicit expression of

beliefs, attitudes and opinions so as not to affect the interviewee’s responses. However, in

accordance with Bryman and Bell (2007, p.467) explanation of a semi-structured interview

– the researcher had a list of open-ended questions on fairly specific topics to be covered

63
(interview guide) which he posed at opportune moments within the interview and allowed

all the experts a great level of leeway within their responses. Elaborations were requested

on points that were raised and deemed to be worthy of being followed up in order to gain

absolute clarity on the true meaning, context and implications of the given statement/s.

The interview guide followed the thematic issues raised within literature (policies and

regulation, financing, training and education, and culture) and is included within this

dissertation as Appendix C.

These thematic issues were put forward to interviewees in order to gain validating or

contradictory insights of pervasive literary beliefs. This was rationalised by Alvesson’s

(2011, p.1), “strong belief that the ‘collection’ and processing of data can provide a solid

base for saying yes or no to various hypotheses and theories”. By and large all questions

within the guide were asked, often in similar but not always exact order and wording. All

interviews were conducted in within the respondents’ natural surroundings (business

offices) in order to allow them to feel free and able to express their true views and

opinions without the concerns of an unfamiliar environment.

3.3 Interviewees

3.3.1 Sampling

Patton (1990, p.182) explains that a ‘maximum variation’ sampling technique purposefully

picks a wide range of variation on dimensions and interests. Given the wide ranging scope

of the intended study, this sampling method is adopted as it documents unique and

diverse variant views from as wide a cross-section of individuals as possible. The

variations being a result of the different realities and conditions each of the respondents

exist within. The intention is to be able to identify important common patterns or themes of

information that arise from the various perspectives the interviewees provide.

64
Respondents from the following disciplines were sought in order to provide the intended

maximum variation sample:

 Financiers – banker, venture capitalist or business angel.

 Policy Makers – representatives from the ministries of: SME and Cooperative

Development; Education; Economic Planning and Investment Promotion; Science

and Technology and Development; Industry and Commerce.

 Social and Economic Analysts – Editors from the local newspapers or authors of

Zimbabwe related books.

 Entrepreneurs – High profile entrepreneurs or high-growth entrepreneurs.

In addition to providing maximum variation, the selected disciplines followed a

theoretical sampling approach whereby knowledgeable and authoritative people in

corresponding fields to those of the study were sought (Bryman and Bell, 2011, p.460)

i.e. policy and regulations, financing, training and education and culture. Of the listed

desirable respondents, the researcher was able to ascertain six interviews with

individuals whose backgrounds provided them with credible knowledge and

experience in majority of the sought disciplines. This was done through travelling to

Zimbabwe and ‘cold calling’ individuals identified within news articles, government

websites, and through the use of the researcher’s personal networks. Figure 10

provides a professional overview of the respondents who for simplification and to

uphold a level of objectivity are simply referred to as interviewees, rather than by their

names. The sample was unintentionally male and potentially reflective of the typical

structure of high profile posts within the country. The range of ages was between 41

and 58 and therefore the expressed views cannot be said to be reflective of all

generations within the country.

65
 Figure 8: The Interviewees

3.3.2 Rationale

In accordance with the theoretical sampling approach; interviewee A represents the

economic analytical perspective being sought through his post, however, he also

embodies the views of a policy maker. Interviewee B provides a similar yet variant view as

that of A given their job roles and institutions. Interviewee C not only offers the insight of a

financier but as an esteemed entrepreneur is sought to provide information on how he

believes individuals such as himself can or should be supported. As the only author on

entrepreneurship in Zimbabwe, interviewee D is looked upon to convey analytical views

on the socioeconomic issues arising from entrepreneurship. Interviewee E represents the

training and education element of the study and F provides an alternate yet similar

perspective to C.

66
Due to the lengthy and wide ranging nature of the information gathered throughout the

interviewing process, only key aspects raised will be included within this section’s analysis

of the findings. Highly relevant questions posed will be outlined before a medley of the

interviewees’ responses is provided in order to give a balanced yet unified response to the

issue at hand. In certain instances, responses from other questions or points raised within

the respondent’s liberal expression of views, thoughts and ideas are utilised to augment

answers provided in relation to a specific question. This is in line with Hunt (1989, p.14)

elaboration on how the intended research is an interpretive enterprise mediated by the

subjective experience of both researcher and subjects. In accordance with the research

objectives of this dissertation and thematic questions posed within the interview, data has

been amalgamated from all interviews and presented under the following subheading:

Zimbabwean Entrepreneurs, Economic Impact, Social Impact and Supporting

Entrepreneurs.

3.4 Zimbabwean Entrepreneurs

Who are entrepreneurs within a Zimbabwean context?

The classification of an entrepreneur within Zimbabwe seemed to be wide ranging. With

interviewee B acknowledging self-employed, traders, the owner of a; bought, franchised,

inherited or a business built from ‘scratch’ as an entrepreneur. On the other hand,

interviewee, C, D, E and F all asserted a distinction between entrepreneurs and ‘real

entrepreneurs’. They noted that within Zimbabwean society, being in charge of your own

business or livelihood entitled one to classify or to be classified as an entrepreneur.

Therefore, Interviewee D interjected after providing a similar response and stated that,

“this off course does not include subsistent farmers in rural areas as they do not

essentially engage in business transactions with their produce, but commercial farmers

are and should be considered as entrepreneurs”.

67
C, D, E and F described ‘real entrepreneurs’ as individuals or groups who establish a

registered business and whether to ‘put food on the table’ or to grow the enterprise

contribute to GDP and pay taxes. Interviewee C highlighted that within this group of ‘real

entrepreneurs’ there were two categorise in Zimbabwe; honest and corrupt. These two

categories could be further broken down into “average” entrepreneurs and “high-value

entrepreneurs”. He measurably asserted that the country was filled with corrupt average

entrepreneurs and desperately required more honest high-value entrepreneurs – citing a

few examples of these individuals.

Respondent D edifies that there are two generations of entrepreneurs within Zimbabwe.

The first are the survival entrepreneurs who arose as a result of the economic crisis, lack

of jobs, reasonable wages and are therefore classified as necessity entrepreneurs. This is

consistent with literature on the typical forms of entrepreneurship found within LEDCs.

The respondent then speaks of a second generation who have evolved as a result of

frustrations with the existing infrastructure and bureaucracies found within the firms they

worked in. He says that these are opportunity entrepreneurs who have spotted and

pursued the chance of conducting business in an alternative manner. He believes that the

subsequent generation of entrepreneurs will be more innovative than the current

arbitrager and imitators comprising the Zimbabwean economy at the moment. These

opportunity entrepreneurs are envisioned to be have a different outlook on conducting

business due to the higher levels of education and societal exposure found from migration

and diasporan proportions.

68
Which sectors would you say have the highest level of entrepreneurial activity and

why?

Entrepreneurial activity was said to vary between urban areas (mainly in the capital city)

and the rest of the country. The peripheries surrounding Harare were noted to engage in

primary sector activity, with F and E noting that mining was the largest growing activity.

This is due to the relatively recent discoveries of alluvial diamonds and the existing

reserves of gold. They offer high returns and require next to no technical skills to extract,

which suits the constituents of these areas as most of them have limited literacy or

educational backgrounds. They trade them on the ‘black market’ (informal channels) and

in many cases utilise the proceeds for their family’s upkeep and in other cases proceeds

are simply squandered, according to F.

Agriculture was noted by A as having been the nation’s ‘backbone’ activity, with maize

and tobacco being major export products. The common finding within the dialogue of ‘out

of town’ entrepreneurial activity was the fact that these activities were engaged in by

individuals or groups with no real structure to their operations and consequently no long-

term or medium-term plans for the money – they were said to be preoccupied with

surviving and if possible living comfortably.

Interviewee B highlighted urban entrepreneurship to mainly be in the secondary and

tertiary sector with A stating that the basic processing and selling of raw mineral resources

constituted a lot of secondary activity. However, services were noted by all respondents

except E as being the largest activity within the urban areas with the financial services

being said to be the ‘hub’ of all activity. “This is where all the real money is” says F. C

posits that Zimbabweans are “clever sheep”, seeing as the economy is in a poor state;

few activities tend to make substantial amounts of money. However, the few that do –

entrepreneurs (not ‘real entrepreneurs’) all flock to them and maximise the profits they are

able to make from it e.g. haulage services, importation and sale of electronic and high

69
value goods and foreign currency exchange (before the implementation of the multi-

currency system). Respondents B and E noted that a lot of city dwellers still conducted

primary sector activities such as farming or mining. Some do so as their sole means of

income and others carry it out in conjunction with a public or private sector job they are

employed in. The, difference between these individuals with their rural counterparts is the

fact that they are usually highly educated and conduct their operations in a professional

manner. Their activities are usually in the form of registered or unregistered businesses

but employing other individuals and reinvesting in the growth of the given project.

3.5 Economic Impact

Could you describe the role played by entrepreneurs and their enterprises within

the Zimbabwean economy?

Interviewee F starts of by stating that entrepreneurs are supposed to create employment

and that’s what legitimate entrepreneurs within this economy do. Other entrepreneurs

(informal sector entrepreneurs) do as well he says, but the standards and remuneration of

such occupations are usually of a poor level. C adds to this stating, “There is a

misconception within this country, where people believe employment is provided by the

government – when in actual fact it is the entrepreneurs they prosecute who create

employment”. He continues to add that, “entrepreneurs of this era have to fight the corrupt

and old fashioned government to pave the way for future generations so that they can

function under normal vis-à-vis optimum conditions and therefore reach their full potential,

therefore at the same time helping the nation reach its full economic potential.”

Respondent B acknowledges entrepreneurs for providing the population with basic and

luxury goods and services, whether through importation, manufacturing, nurturing,

galvanisation of resources or use of natural talents and abilities. With E stating that

entrepreneurs within this economy inadvertently contribute to GDP growth and GDP per

70
capita rates but are merely concerned with going about their lives as comfortable as

possible.

D argues that for all the negativity informal entrepreneurs receive, they are and have been

the core of the Zimbabwean economy preventing the country from completely crumbling in

the face of the mismanagement exercised by parastatal officials. They have imported and

distributed fuel through so called illegal channels when the government’s National Oil

Company of Zimbabwe (NOCZIM) did not have the foreign currency reserves to do so.

They introduced affordable foreign television decoders when legislation stipulated that the

national television channels show 100 percent local content which was used as a means

of limiting the negative and condemning international publicity government was receiving.

C simply says that informal sector entrepreneurs are bona fide entrepreneurs in regard to

innovating and spotting loop holes (opportunities) within the system that allow them to

survive and in some cases profit greatly from the dire economic and political situation

found within the country.

3.6 Social Impact

Could you describe the role played by entrepreneurs and their enterprises within

the Zimbabwean society and environment?

Interviewee D sarcastically retorts, “If you’re talking about global warming issues when

you ask about the environment – Zimbabweans are not concerned with such issues, we

have much bigger problems to deal with than that.” Although expressed in a light- hearted

manner, this comment seemed to encapsulate the genuine view point of many of the

respondents. C adds that unless the entrepreneurial activity imminently affects the

population adversely, very few people are concerned with the long term environmental

impact of the initiative. As long as it brings about financial returns for the parties interested

71
and the local community benefits in the form of jobs, or investments to their areas such as

the establishment of a school, hospital or road – everybody is relatively happy.

Having gathered his thoughts, C continues to say, “You see, the problem is that the

people of this country have come a long way and still have a long way to go. The colonial

era stripped them of everything they/we know and now that we are free, there is a clamour

to get anything and everything one can get his hands on – to live the lives the colonialist

did when they occupied this country and that is why people have little concern for things

such as the environment. That, plus the fact that times, have been and, are still tough so

making the most of one’s life now is what motivates people to operate in the manner they

do.”

In the researcher’s view, this rationalised F’s assertion that there is not a community or

charitable spirit within the country. Everybody is preoccupied with providing for him or

herself and their family circles as best they can. C however contradicted this statement

citing that upon establishing his financial service group he sought to provide fair and

generous wages, develop staff and acknowledged he could not help everybody in the

country and as a result selected a social cause he would aid. In his case, the entrepreneur

specified his organisation sponsored widows and orphans and their upkeep was to be an

above the line expense not a nominal amount offered after profits and dividends had been

paid.

As a result he reports to have paid for the education, accommodation and dietary

requirements of over 1,100 orphans from the beginning of their education process till the

completion of their tertiary education. With over 30 doctors, 60 lawyers and a host of other

professionals arising from this support – he smiled and said, “this is what motivates me to

wake up every morning and go to work – so that many more less privileged children can

enjoy the same basic opportunities.” He concluded by restating that charity or

72
entrepreneurially led community interest projects were not common practice amongst

Zimbabwean entrepreneurs. He notes a handful of high net worth entrepreneurs who

actively engage in such initiatives. Ultimately, he blames the scarcity of such activity on

the country’s lack of a supportive culture.

3.7 Supporting Entrepreneurs

What would you say the major shortcoming or challenges entrepreneurs within this

country face?

A variety of responses were offered to this question from all respondents. The table below

provides a tally of the mentioned reasons, therefore going to highlight the most pertinent

shortcoming or challenges as perceived by the cross-section of respondents.

Table 4: Shortcomings/Challenges faced by Zimbabwean Entrepreneurs

Shortcoming - Challenge Interviewee Tally

Harsh economic and political environment A, B, C, D, E, F
Lack of financing and funding options A, B, C, D, E, F
Lack of a supportive national culture B, C, D, E, F
Limited entrepreneurial education, training and mentoring A, C, D, E, F
Un-conducive political and regulatory environment C, D, E, F
“Colonial hangover” C, D, F
Lack of entrepreneurial temperament C, F

Of the mentioned responses, acknowledgement of the harsh economic environment

Zimbabweans and entrepreneurs alike exist in was mentioned by all respondents. The

harsh political element, however, was mentioned by all except the two government

officials. Lack of financing was specially noted by C to be a result of not a liquidity crisis in

the economy as stated by B, D and F but rather a credit crisis. He emphatically states

that, “Zimbabwe has been ostracised by the international community. This means that we

have no credit lines from the World Bank or International Monetary Fund. In addition,

73
given the shambolic political setup in this country – no governments or non-governmental

organisations want to be associated with funding or aiding Mugabe and his cronies.”

F contributed to this line of thought insisting that up until there is a change in political

setup of the country, much needed foreign direct investment (FDI) will not be availed to

the country. The banker goes on to say, “without FDI banks such as my own do not have

the resources to loan the money existing or would-be entrepreneurs require for starting or

growing their businesses.” Respondent C further elaborates stating that, “For real

economic growth this country needs an injection of real money, I would say a few billions.

This money is required over a long-term period of time; let us say 5 to 10 years. Because

right now there is no money in Zimbabwe: when institutions lend money to businesses, 90

days is considered a long-term loan [laughs].”

With regard to a supportive national culture, D states that entrepreneurs need the support

of their friends and families in whatever they do. Consequently stating aspiring

entrepreneurs do not receive such support; as stable employment has been embedded in

the mind-set of the populous as thee means to make a good living. E spoke on societies

scepticism and reluctance to purchase goods or services offered by an indigenous

entrepreneur contending that people would much rather buy or pay for goods and services

from foreign owned companies, a Caucasian run enterprise or imported goods – if they

can afford it. These sentiments go to reiterate and encapsulate what C, D and F referred

to as a ‘colonial hangover’ whereby locals look down upon their own kind as a result of

always having been looked down upon themselves. C edifies on how successful blacks of

the colonial error owned a bottle store or a grocery store and how this has subconsciously

been demarcated as the ceiling for black entrepreneurial excellence. He says there is a

lack of belief in the abilities of fellow countrymen to establish and run an enterprise that is

equivalent to those run by former colonialists.

74
In reflection upon his statement, C caveats that this colonial hangover is predominantly

found amongst the older generation who lived through the colonial era. Supplementing

this line of thought, he posits that there is a ‘generational war’ occurring within the country.

Within which, the older generation who are predominantly in high positions of power within

society are symptomatic of this colonial hangover and the younger generation –

“generation Y” has been brought up in a fully integrated, inclusive and embracive

environment. Especially considering the fact that many have studied abroad, there is a

clash of ideas and ideals between the two generations. C concludes the only way this

generational war will be resolved is through natural selection – he warns that it will not

completely disappear though as the colonial story is etched within our history books,

folklore, media and thus embedded in our culture as a people and as long as it is, it will

continue to hinder the entrepreneurial progression of the Zimbabwean people.

Finally, F and C allude to a lack of real entrepreneurial temperament being prevalent

within the Zimbabwean entrepreneurial construct. They argue in favour of the nature

approach in understanding the emergence of entrepreneurship. They both state that due

to the lack of jobs and poor wages being offered within private and public sector alike,

many non-entrepreneurial individuals have found themselves having to pursue

entrepreneurial careers. As a result, the calibre of ventures established and in operation

are not of a high standard in their regard.

Suggested solutions to some of the challenges raised within dialogue and in literature

were provided in accordance to questions posed within the research guide. Responses

have been compiled and are presented in the reoccurring thematic areas of this

dissertation.

75
3.7.1 Policies and Regulation

What are the main policies and regulations in place to support entrepreneurial

activity?

Interviewee B acknowledged Zimbabwe’s poor ranking in the ‘Ease of Doing Business

Report’ before referring to the ‘Industrial Development Policy 2012-2016,’ where he

quoted the government’s commitment to improve the country’s ease of doing business

ranking through the establishment of a One Stop Shop. This organisation, which would be

a subsidiary of the Zimbabwe Investment Authority is meant to reduce the time taken to

set-up a business from 48 days to 5 days. However, when asked, “when is it meant to be

put in place?” the respondent simply shrugged. He also noted that there was no legislation

or policy in place to categorically aid entrepreneurs other than the proposed “51 percent

Indigenous Ownership Bill” which entails the patronisation of foreign owned firms by local

inhabitants of Zimbabwe. There was an apparent lack of knowledge on any entrepreneur

oriented or entrepreneurship enhancing legislative measure within the country amongst all

other respondents. Respondent E did elaborate on his lack of awareness of such policies

explaining that this was not one of his areas of experience and recommending the

researcher speak to government officials for an answer to such a question. He did

hypothesise that any entrepreneur related policies would be masked or bundled up as

SME enhancing initiatives.

Interviewee A identified export trade as an essential means of gaining economic stability

and growth. As a result he elaborated upon great initiatives that are being put in place to

encourage entrepreneurs to produce products for external clientele. The following import

and export related policies were cited as examples of government aids in supporting

entrepreneurial activity within the country:

 Duty Free importation of raw materials to be used in the production of goods

for export (Duty Drawback Scheme). Disincentivize the export of raw materials

76
 through introduction of tax – thus encouraging entrepreneurs to create new value

added products.

 Duty Free importation of capital equipment to promote mechanisation and the

creation or processing of value added products and services for local and

international markets.

 Duty Deferments - financially unable businesses can defer duty payments for up

to a year (said to be highly pertinent aiding the survival of nascent enterprises).

 New and Stronger Trading Ties – Zimbabwe’s main trading partners were said

to be South Africa and Zambia but great national initiatives were being made to

create stronger ties with the ‘Asian Tigers’.

 100 percent Retention of Export Earnings instead the previously mandatory 30

percent levy payable to the Reserve Bank  Increasing liquidity and job creation

through the financial growth of firms  Larger deposits within entrepreneur’s

personnel and corporate bank accounts  Allowing banks to be in a position to

issue out loans to aspiring or established entrepreneurs.

In different words, all examinees of this study alluded to the mere drafting and

implementation of entrepreneur focused legislation. In addition to this, B expressed that a

policy and regulatory framework based on the emerging economy of India would be an

ideal template for Zimbabwe. He believes there are many historical and cultural

similarities between the countries and astutely informs that “entrepreneurial support based

on pervasive western ideologies will not be able to optimally enhance this country – we

are simply different people and we respond differently to different stimuli”.

Interviewees D and F advocated for government to exercise protectionism of SME activity

within the country. Stating that this would allow the historically disadvantaged

entrepreneurs of developing nations to advance to a competitive level i.e. allow

77
entrepreneurs to build up knowledge, skills and resources to be able to successfully aid

developing nations to ‘catch-up’ to what were referred to as pioneer countries. With D

sarcastically posing that, “…not doing so is like placing a toddler (Zimbabwean

entrepreneurs) into a heavy weight boxing match (global markets)”.

3.7.2 Training and Education

What education/training/mentoring programmes or assistance is offered to

aspiring, nascent and existing entrepreneurs within Zimbabwe?

The Master Trainer of Entrepreneurship categorically stated that entrepreneurial

education, training and mentoring are non-existent within the country. He spoke on how

he had not exercised any training stewardship for entrepreneurs within Zimbabwe for the

past seven years due to the lack of international funding for this function. Thus leading to

his employment with the charity organisation he provided Fundraising Management and

Quality Assurance. The respondent also explained to the researcher that the educational

curricula from primary to tertiary level did not provide any form of entrepreneurship

education. He adds that fundamental business education should not be considered to be

entrepreneurial education as the business education merely produces business

employees whereas entrepreneurial education should liberate individuals to be creative,

resourceful and how to go about setting up an enterprise.

The two bankers were firm believers in entrepreneurs naturally being born entrepreneurial

and that education merely produced average entrepreneurs. As a result, F argued for the

need of a system that allowed individuals who have gained relevant experience within a

given field or industry and possessed the prerequisite “entrepreneurial flair” to be able to

apply for mentorships with entrepreneurs within that specific industry. That said it is the

researchers view that the implications of this suggestion appears to be idealistic sound

however the practical feasibility of its implication may have been ill considered.

78
Respondents C, D and F acknowledged the former existence of a professional

entrepreneurial course by the name of EMPRITECH which used to assist nascent

entrepreneurs with business plan writing, financing options and basic business

management skills. However, since its closure no other programmes have existed in its

place. D attributes some of the poor entrepreneurial business practices within the market

to the shortage of such guiding institutions.

Examinee F promotes the importance of role models and competitors as the best learning

and development tools for aspiring and existing entrepreneurs respectively. Having

unknowingly been praised by C for actively aiding other financial sector entrepreneurs in

the establishment of competing firms, F believes that established entrepreneurs learn and

develop from strong and healthy competition. Therefore as the founder of the first

indigenous commercial bank, F conveyed a fear of self-complacency as the driving force

behind his aiding of other financial sector entrepreneurs. This self-driven selflessness

appears to have inspired and helped interviewee C achieve his personal entrepreneurial

successes.

3.7.3 Financing

What financial support is accessible/available to nascent and existing

entrepreneurs?

As previously mentioned, the liquidity crisis which was identified to be a credit crisis was

noted as a major limiting factor to the availability of financial support for entrepreneurs by

the banking sector. Respondents C and F did mention that existing high-growth

enterprises had the latitude to float companies of the Zimbabwe Stock Exchange in order

to gain financial resources for growth.

79
Interviewees A and B both noted the Ministry of SME and Cooperation as being the

guardian of entrepreneurial related funding. However, they also did note that just like any

other government department, funds are tight and as a result very little support is or can

be offered within the interim.

Interviewee D spoke on micro-entrepreneurs reliance on group loans. Within this scenario,

individuals of the same trade were identified to exercise a ‘round robin system’ of lending

money to each other with no legal framework in place for the repayments of loans. Good

faith and trust in each other was said to be the only form of security utilised with

surprisingly low levels of defect. This is acknowledged as a prime example of

entrepreneurs’ resourcefulness, risk-taking orientation and effective use of personal

networks. It is also noted to coincide with the use of solidarity loans mentioned by

Chamlee-Wright (2005) in section 2.5.4.

Research study C calls for the government to take affirmative action, as the largest

employer within the country, by banking with local banks and insurance firms. He argues

that this will breed trust, belief and faith in the indigenous banking sector whilst entrusting

the private sector with the investment and management of the country’s financial

reserves.

3.7.4 Entrepreneurial Culture

How could the entrepreneurial culture within the country be improved upon?

Having established the effect of colonialism on Zimbabwe’s culture and entrepreneurial

predisposition, it was similarly argued by all respondents that culture is extremely hard to

change and takes many years to take effect. Education from a young age was proposed

as the logical means of achieving any changes. However, E referred to changing the

80
mentality of the older generation as “impossible as teaching an old dog new tricks”. W hich

is why the author shares interviewee C’s view of natural selection being the only

means of gradually shifting the population to see past the colonial era.

3.7.5 Additional Suggestions

After warning that his views and opinions could be interpreted as controversial at times,

interviewee C outlined three factors he felt needed resolving, with the belief that

rectification of these, “will allow everything else to fall in place and Zimbabwe will once

again be known as the breadbasket of Africa and it will be a global economic contender,

with above descent standard of living conditions.” The three factors were:

 Change of government – reduces internationally perceived political risk and allows

for the generation of new ideas, policies and regulations.

 Normalise international relations – leads to the removal of trade embargoes

allowing the country to freely export vast mineral resources with proceeds being

channelled towards debt repayments and support of entrepreneurial ventures.

Normal international relations will also bring about much needed FDI, NGO aid

and lines of credit from the World Bank and IMF.

 Create a supportive culture – allows naturally born high growth entrepreneurs to

develop and provide high-value goods and services for both local and export

markets without having to channel time and resources towards paying bribes or

fighting a system of individuals who do not believe in an fellow indigenous person’s

abilities or fighting individuals who simply want to bring you down - jealousy.

The same respondent went on to hypothesise that Zimbabwe did not need more than 100

high-growth entrepreneurs operating within the primary and tertiary sector to position the

country as a global economic contender within a 5 to 10 year window period. Given a

conducive environment (outlined within the three former factors) he is convicted that a

81
focus of entrepreneurial activity within the mobilisation of abundant natural resources

combined with the tactful leveraging of these resources within global markets by financial

service ambassadors would bring about economic and social prosperity to the nation.

More so, he adds, if entrepreneurs are able to innovatively process and add value to

these resources.

This view was shared by F and D believed that entrepreneurial focus within e-commerce

and and resources would provide the optimum results.

82
4. Discussion and

Recommendations

The intention of this section is to validate, contradict and relate findings with academic

theory. In addition to this, allow the researcher to express his own views, beliefs and

thoughts. This will be done through the use of the reoccurring subsections within this

dissertation i.e. entrepreneurs, economic and social impact and finally supporting

entrepreneurship.

4.1 Entrepreneurs
Through the combination of literary and research consultation, entrepreneurs have come

to be understood by this dissertation as;

Individuals who utilise a range of intrinsic and extrinsic factors to conceptualise, galvanise

resources and assume the risks of arbitraging inventing, innovating or imitating products

and services for perceived opportunities or needs within the private, public and third

sector markets through the formation and leadership of formal or informal enterprises – in

hope of fulfilling personal motivations and/or benefiting their socioeconomic environment.

This definition, which satisfies the research objective of identifying who entrepreneurs are,

is applicable within both a developed and a developing nation context and adds the

missing macro socioeconomic effect of entrepreneurship previously mentioned in section

2.2 of this dissertation. It also affixes the intrinsic drive/ambition/autonomy elements

raised within section 2.3 through its acknowledgement of personal motives as well as

recognising the essential risk orientation these individuals are said to possess. It draws

83
upon Schumpeterian (invention, innovation and imitation) and Kirznerian (arbitraging and

information asymmetries represented within the mention of extrinsic factors) ideals alike

and acknowledges the informal sector activity predominantly found within LEDC as a

legitimate realm of entrepreneurial activity as highlighted by research respondents. The

act of formulating ideas (conceptualisation) is thought to be an important differentiating

factor with business people (who may essentially acquire an existing firm or franchise).

Finally, this elaborate definition also incorporates established and nascent entrepreneurs

of any business, size or sector, regardless of whether they are operating as a result of

necessity or opportunity.

4.2 Economic Impact

Conventionally, formal sector entrepreneurs are regarded as the generators of economic

development. Primary research found that informal sector entrepreneurs may not

essentially give rise to economic growth or prosperity however in the case of the study’s

developing country they were hailed as “the core that prevented the Zimbabwean

economy from completely crumbling”. These individuals provide new and existing

products and services to market, predominantly to sustain their livelihood but in doing

inadvertently enhance the day-to-day lives of all citizens through the creation of menial

jobs.

4.3 Social Impact

Although Tiessen’s (1997) assessment argued that individualist cultures bred

entrepreneurial breakthroughs and collectivists implemented and improved upon the

breakthroughs, this study argues that entrepreneurs (high-growth entrepreneurs in

particular) tend to be driven by individualistic orientations regardless of the prevailing

84
national culture and in the pursuit of accomplishing their individually oriented aspirations

the consequently give rise to societal benefits. That is to say, the double entendre of self-

driven selflessness could be attributable to societal progression.

It was evident from the dialogue had with participants of the study that the possible social

impact entrepreneurs were identified to be able to elicit within theory, were not occurring

within a Zimbabwean context. This is particularly true with regard to charitable or

community enhancing activity. This is an interesting contrast to literature’s identification of

African communities as collectivist in nature. With the high group loyalty and

consideration, one would think that entrepreneurs within these communities would be

eager and keen to contribute to the society’s advancement. But seeing as colonialism was

said to be responsible for a lot of the behaviours of individuals within the country of study,

it is hypothesised that the long periods of not being entitled or allowed to amass wealth or

riches has left those who do achieve it guarding their new found possessions jealously.

4.4 Supporting Entrepreneurs

By and large the author agrees with many of the viewpoints raised by the respondents as

means of nurturing and supporting entrepreneurship. Further to this, the author tresses

that entrepreneurs and their businesses should not merely learn to live within the existing

government policies and access to markets. Instead, through the effective use of industry

bodies and influential individuals within the business and political arena – challenge and

champion alternative and more favourable policies and routes to market. Although not

explicitly expressed by the interviewed parties, this realisation was a result of discussions

with them. These sentiments are also embodied within Nyambayo’s (2008) call for

Zimbabwean entrepreneurs not to sit idle in times of hardship but rather forge new paths

in the face of adversity. Especially as societal leaders, the onus lies with them to be the

necessary change agents.

85
It is believed that there is a need for an appropriate balance between large and SMEs,

privately owned by indigenous entrepreneurs and foreign owned enterprises. This is so

that that technological advancements may be brought to market by the foreign

multinationals and therefore provide a basis upon which large and small indigenous

enterprise owners alike can imitate and incrementally improve upon in order to meet the

needs and requirements of local people. However, in agreement with interviewees D and

F protectionism is advocated for in order to allow the historically disadvantaged

entrepreneurs of developing nations to advance to a competitive level i.e. allow

entrepreneurs to build up knowledge, skills and resources to be able to successfully aid

developing nations to ‘catch-up’ to what were referred to as pioneer countries.

It was interesting to note that although reference to the importance of an entrepreneurially

conducive political and regulatory environment was established within literature and

reiterated by the research interviewees – none of the respondents of the study were able

to categorically offer advice or suggestions on necessary actions required to rectify the

situation. It is seems to be testimony of the ease of noticing what is wrong but highlights

the challenges of coming up with a ‘full proof’ plan or a course of action agreeable by a

majority. Therefore in fear of ill advising, respondents either retorted that it wasn’t their

job, they didn’t know or I wouldn’t even know where to start.

86
5. Limitations and Future

Research

The wide ranging scope of implications of this study are noted as a limiting factor; as they

predicate the overview nature of this dissertation, therefore impeding in depth analysis of

particular or pertinent issues to be thoroughly carried out. Future research could benefit

from thoroughly evaluating the role of gender within developing nation’s entrepreneurial

activity. Analysing any differences in the social and economic impact these two groups of

individuals give rise to. The role of intrapreneurs was also not covered within this study

and this presents an interesting opportunity for subsequent academic analysis.

There was an evident shortage of Zimbabwe focused literature, especially with regard to

entrepreneurship. As a result, a literary case for Zimbabwe had to be built up from general

developing nation information, and where possible – southern Africa focused literature.

The lack of Zimbabwean scholarly publications was identified by interviewee D as a

function of the state’s poor governance of public services such as education. As a result -

lecturers, professors and professionals have no incentive to conduct research or codify

their tacit knowledge. Instead they focus on means of ensuring their personal and family’s

sustenance needs. Another limiting factor of this research is the fact that research was

qualitatively oriented whilst the measurement of the social and economic impact of

entrepreneurs could have benefited from a quantitative analysis. This was not achievable

within the remits of this dissertation due to a lack of necessary resources such as access

to a wide range of entrepreneurs, inconsistencies in data pertaining to Zimbabwe due to

government policies restricting foreign agencies evaluating and analysing its affairs.

87
Not being able to secure interviews with all intended parties proved to limit the research

findings of this study to the fields of expertise the respondents had experience in. The

research could perhaps have benefited from a diversity of entrepreneurs e.g. high-growth,

nascent and ‘average’ entrepreneurs. Furthermore, participants from the Ministries of

SME and Cooperation, and the Ministry of Education would have been highly beneficial in

conveying a well-rounded account of the entrepreneurial climate within Zimbabwe and

how it is being or intended to be supported.

Finally, I call upon my own personal shortcomings as a limiting factor. This is in line with

Polanyi’s (1966) historic assertion that - as a human beings “we can know more than we

can tell”. This is particularly relevant in reference to my expression of knowledge gleaned

throughout the researching, interviewing and writing of this dissertation. Whereby existing

and gained tacit knowledge on certain issues is at times partially elaborated upon or

merely eluded to rather than succinctly conveyed or codified due to the challenges of

adhering to the parameters of this study. Polanyi’s assertion could also be said to be

applicable to the information articulated by the forthcoming interviewees, as despite all

efforts to relay as much relevant information as possible, linguistic, time and cognitive

limitations could have a hindering effect on the findings of this research.

88
6. Conclusion

In theory the role of entrepreneurs within a developing nation was found to be multifaceted

in nature. They were identified as the pivotal engine for economic growth, organisational

and societal leaders, responsible for the welfare of the environment and the communities

that exist within them. These individuals were said to be agents of change through their

introduction of inventions, innovations and imitations – whilst possessing the ability to

reduce poverty, raise the standard of living of multitudes through job creation and their

engagement in socially oriented initiatives.

In reality, and in the case of Zimbabwe, majority of entrepreneurial activity was found to

be lacking in the provision of many of the possible social and economic benefits. Through

qualitative interviews conducted with a fairly diverse cross-section of participants, majority

of indigenous entrepreneurs of the country were validated to be informal in nature and

resembling Kirznerian entrepreneurship of arbitraging rather than the more desirable

Schumpeterian form of entrepreneurship. Activity was found to revolve around Rossa et

al. (2006) mention of survivalist pluriactivity, in which ephemeral pockets of demand are

exploited as they arise. Interviewees attributed this to the long-term effects of colonialism

and a harsh political and economic environment. Significant curtailing factors faced by this

group of individuals were noted to be: a harsh and un-conducive economic and political

environment; lack of a supportive national culture; no credit lines, FDI and overall financial

liquidity within the market; and finally the absence of entrepreneurial training programmes

or courses and an entrepreneurial curriculum within the educational system.

The existence of a new generation of high-growth entrepreneurs were said to have the

propensity to remedy multiple social and economic challenges faced within the country.

Interviewee C went as far as hypothesising that Zimbabwe did not need more than 100 of

89
these individuals and the appropriate socioeconomic environment to position the country

as a global economic contender within a 5 to 10 year time frame. Drawing upon a range

of intrinsic and extrinsic factors, the proliferation of high-growth entrepreneurs in particular

is believed to be the key to economic and social prosperity. As the mere proliferation of

entrepreneurship seems to have occurred within Zimbabwe but due to the circumstances

under which it has occurred, its success and ability of aiding the country to flourish have

been stunted. That said, the activity of the existing generation of informal entrepreneurs

(colonial oriented, necessity driven, imitative entrepreneurs) was attributed to have

prevented the country from completely crumbling during periods of hyperinflation. Thus

they have provided a platform (dilapidated as it may be) for the second generation of

opportunity driven entrepreneurs who have grown up in more socially integrated and

inclusive environments and are highly educated to eventually give rise to inventive and

innovative socioeconomically enhancing activity.

90
7. References

Acs, Z. and Virgill, N. (2009). “Entrepreneurship in Developing Countries”. Jena Economic

Research Papers, No.023, pp.1-82.

African Economic Outlook [AEO]. (2012). “Zimbabwe”. Available at:

<http://www.africaneconomicoutlook.org/en/countries/southern-africa/zimbabwe/> Accessed:
[03/08/12].

Alvesson, M. (2011). “Interpreting Interviews”. Sage Publications, London.

Austin, J., Stevenson, H. and Wei-Skillern, J. (2006). “Social and Commercial Entrepreneurship:
Same, Different, or Both?” Journal of Entrepreneurship Theory and Practice, pp.1-22.

Bandura, A. (2005). “Adolescent Development from an Argentic Perspective”. Ch. 1, Self-Efficacy

Beliefs of Adolescents, pp. 1-43.

Baron, R.A. and Markman, G.D. (2003). “Beyond Social Capital: the role of entrepreneurs’ social
competence in their financial success”. Journal of Business Venturing, No.18, pp.41-60.

nd
Bolton, B.K. and Thompson, J. (2004). “Entrepreneurs: Talent, Temperament, Technique”. 2 Ed.,
Ch.12-13, pp.315-359, [Book]. Elsevier Butterworth-Heinemann, Oxford.

rd
Bryman, A. and Bell, E. (2011). “Business Research Methods”. 3 Ed., Ch. 1-3, pp.1-592, Oxford
University Press, New York.

Bull, I. and Willard, G.E. (1993). “Toward a Theory of Entrepreneurship”. Journal of Business
Venturing, Vol.8, pp.183-195.

nd
Burns, P. (2007) “Entrepreneurship and Small Business”. 2 Ed. pp.56-62. Palgrave Macmillan,
Bassingstoke.

Campos, E.J., Lien, D. and Pradhan, S. (1999). “The Impact of Corruption on Investment:
Predictability Matters”. World Development. Vol.27, No.6, pp.1059-1067.

Chamlee-Wright, E. (2005) “Entrepreneurial Response to ‘Bottom-up’ Development Strategies in

Zimbabwe”. The Review of Austrian Economics, Vol.18, No.1, pp.5-28.

Cheng, S., Stough, R.R. and Jackson, R.W. (2009). “Measuring and building high-quality
entrepreneurship: a research prospectus, Innovation”. The European Journal of Social Science
Research, Vol.22, No.3, pp.329-340.

Chittenden, F. (2011) “Different Types of Funding”. High Technology Entrepreneurship. [Lecture],

Attended: [02/11/11], University of Manchester, Business School.

Chulu, B. (2012) “The Human Capital Telescope: Schumpeterian entrepreneurs key to economic
growth”. Zimbabwe Independent. [Newspaper], 08 March 2012, Available at:
<http://www.theindependent.co.zw/business/34503-the-human-capital-t elescope-schumpeterian-
entrepreneurs-key-to-economic-growth.html> Accessed:[12/06/12]

91
Crews, D.E. (2010). “Strategies for Implementing Sustainability: Five Leadership Challenges”. SAM
Advanced Management Journal, p.15-21.

Dabla-Norris, E. (2012). “Expanding Financial Sectors in Low-Income Countries”. IMF Strategy,

Policy and Review Department. Available at:
<http://www.imf.org/external/pubs/ft/survey/so/2012/POL060112A.htm> Accessed: [24/07/12].

Dodgson, M. (2011). “Exploring new combinations in innovation and entrepreneurship: social

networks, Schumpeter, and the case of Josiah Wedgwood (1730-1795)”. Journal of Industrial and
Corporate Change, Vol.20, No.4, pp.1119-1151.

Etzioni, A. (1987). “Entrepreneurship, Adaptation and Legitimation: A Macro-behavioural

Perspective”. Journal of Economic Behaviour and Organisations, No.8, pp.175-189.

European Commission. (2012). “Small and medium-sized enterprises (SMEs): Promoting

Entrepreneurship”. Enterprise and Industry. [Online]. Available at:
<http://ec.europa.eu/enterprise/policies/sme/promoting -ent repreneurship/index _en.htm> Accessed:
[27/07/12].

Florida, R.L. and Kenney, M. (1988). “Venture Capital and High Technology Entrepreneurship”.
Journal of Business Venturing, No.3, pp.301-319.

Geels, F.W. (2002). “Technological transitions as evolutionary reconfiguration processes: a multi -

level perspective and a case-study”. Research Policy, No.31, pp.1257-1274.

Global Entrepreneurship Monitor [GEM]. (2012). “About us”. [Online]. Available at:
<www.gemconsortium.org.> Accessed: [02/08/12].

Graseck, S. (2008) “Explore the Past to Understand the Present and Shape the Future”. National
Council for the Social Studies, Social Education, Vol.72, No.7, pp.367-370.

Grierson, J.P., Mead, D.C. and Moyo, S. (1997). “Business linkages in Zimbabwe: helping to shape
‘win-win’ economic structures”. Development in Practice, Vol. 7, No.3, pp.304-307.

Hedberg, P. (2011). “The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to

Modern Times”. Scandinavian Economic History Review, Vol.59, No.2, pp.193-196.

Heinonen, J. (2006). “How to promote entrepreneurship through education system?” Kingston

University, Small Business Research Centre. Available at:
<http://www.bepart.info/fileadmin/user_upload/textfiles/2006_Symposium_June_06_Rostock/Keyn
ote__Pres._J._Heinonen.pdf> Accessed: [03/08/12].

Herold, C. (2010) “Let’s raise kids to be entrepreneurs”. TED Talks, [Online]. Available at:
<https://www.ted.com/talks/cameron_herold_let_s_raise_kids_to_be_entrepreneurs.html>
Accessed [16/07/12]

Hofstede, G. (2012). “Dimensions of national Cultures” Gert Hoftede and Gert Jan Hofstede.
[Online]. Available at: <http://www.geerthofstede.nl/> Accessed: [14/08/12].

Huff, W.G. (1989). “Entrepreneurship and Economic Development in Less Developed Countries”.
Business History, Vol.31, No.4, pp.86-97.

92
Hunt, J.C. (1989). “Psychoanalytic Aspects of Fieldwork.” Qualitative Research Methods Series 18,
Sage Publications, London.

International Association for Impact Assesment [IAIA]. (2010) “Social Impact Assessment”.
[Online]. Available at: <http://www.iaia.org/iaiawiki/sia.ashx> Accessed: [19/08/12].

International Finance Corporation [IFC]. (2010). “Scaling-Up SME Access to Financial Services in
the Developing World”. G20 Seoul Summit 2010 [Report], Financial Inclusion Experts Group, SME
Finance Sub-Group, pp.1-88.

International Monetary Fund [IMF]. (2006). “Glossary of Selected Financial Terms: Terms and
Definitions”. Foreign Direct Investment, Gross Domestic Product [Online]. Available at:
<http://www.imf.org/external/np/exr/glossary/showTerm.asp#89> Accessed: [24/07/12].

International Monetary Fund [IMF]. (2012). “World Economic Outlook April 2012: Growth
Resuming, Dangers Remain”. World Economic and Financial Surveys, pp.1-221.

International Monetary Fund [IMF]. (2011). “Zimbabwe: 2011 Article IV Consultation”. IMF Country
Report, No. 11/135. [Online].Available at:
<http://www.imf.org/external/pubs/ft/scr/2011/cr11135.pdf> Accessed: [03/08/12].

Jensen, S.M. and Luthans, F. (2006). “Entrepreneurs as authentic leaders: impact on employees
attitudes”. Leadership and Organisation Development Journal, Vol.27, No.8, pp.646-666.

Jongwe, A. (2011). “State’s role in promoting entrepreneurship”. The Financial Gazett e, Workforce
Solutions. [Newspaper]. Available at: <http://www.financialgazette.co.zw/comment/8309 -states-
role-in-promoting-entrepreneurship.html> Accessed: [02/08/12].

Kerr, W. and Nanda, R. (2010). “How Governments Should Spur Entrepreneurship”. Forbes,
Entrepreneurs. Available at: <http://www.forbes.com/2010/04/28/how-to-spur-entrepreneurship-
entrepreneurs-financ e-harvard.html> Accessed:[24/07/12].

King, N. and Horrocks, C. (2011). “Interviews in Qualitative Research”. Reprinted, Sage

Publications, London.

Kvale, S. and Brinkmann, S. (2009). “Interviews: Learning the Craft of Qualitative Research
nd
Interviewing”. 2 Ed., Sage Publications, London.

Kramarenko, V., Engstrom, L., Verdier, G., Fernandez, G., Oppers, E.S., Hughes, R. McHugh, J.
and Coats, W. (2010). “Zimbabwe: Challenges and Policy Options after Hyperinflation”.
International Monetary Fund, African Deparment, Vol.10, No.3, pp.1-62.

Krauss, S.I., Frese, M., Friedrich, C. and Unger, J.M. (2005). “Entrepreneurial Orientation: A
psychological model of success among southern African small business owners”. European
Journal of Work and Organizational Psychology, Vol.14, No.3, pp.315-344.

Lazear, E.P. (2005). “Entrepreneurship”. Journal of Labour Economics, Vol.23, No. 4, pp. 649-680.

Lemmon, G.T. (2012) “Promoting Entrepreneurship in Vulnerable Economies”. Harvard Business

Review Blog Network. Available at:
<http://blogs.hbr.org/cs/2012/06/promoting_entrepreneurship_in.html> Accessed: [24/07/12].

93
Lingelbach, D., de la Viña, L. and Asel, P. (2004). “What’s Distinctive about Growth-Oriented
Entrepreneurship in Developing Countries?” International Finance Corporation [IFC] and University
of Texas, pp.1-10.

Maak, T. (2007). “Responsible Leadership, Stakeholder Engagement, and the Emergence of S ocial
Capital”. Journal of Business Ethics, p.329-347.

Maak, T., and Pless, N. (2009). “Responsible Leaders as Agents of World Benefit: Learning’s from
Project Ulysses”. Journal of Business Ethics, p.59-71.

nd
MacKenzie, D., and Wajcman, J. (1999) “The Social Shaping of Technology”. [Book]. 2 ed. Open
University Press, Buckingham.

Mangelsdorf, M.E. (2010) “The Pitfalls of Promoting Entrepreneurship”. MIT Sloan Management
Review, The Magazine, Innovation. [Online]. Available at: <http://sloanreview.mit.edu/the-
magazine/2010-winter/51203/the-pit falls-of-promoting-entrepreneurship/> Accessed: [23/07/12].

nd
Mason, J. (2002). “Qualitative Research”. 2 Ed., Ch, 2-3, Sage Publications, London.

McDade, B.E. and Spring, A. (2005). “The ‘new generation of African entrepreneurs’: networking to
change the climate for business and private sector-led development”. International Journal of
Entrepreneurship and Regional Development, Vol.17, No.1, pp.17-42.

Metcalfe, J.S. (2004). “The entrepreneur and the style of modern economics”. Journal of
Evolutionary Economics, No.14, pp.157-175.

Minniti, M. and Lévesque, M. (2010). “Entrepreneurial types and economic growth”. Journal of
Business Venturing, No. 25, pp. 305-314.

Morris, R. (2011). “2011 High-Impact Entrepreneurship Global Report”. Global Entrepreneurship

Monitor [GEM], Centre for High-Impact Entrepreneurship at Endeavour, pp.1-13.

Mueller, S.L. and Thomas, A.S. (2000). “Culture and Entrepreneurial Potential: A Nine Country
Study of Locus of Control and Innovativeness”. Journal of Business Venturing, No.16, pp.51-75.

Munyavi, K. (2012). “Zimbabwe school’s curriculum lacks entrepreneurship, basic business and
money management skills”. Entrepreneur Crunch. [Online]. Available at:
<http://entrepreneurcrunch.com/zimbabwe -schools-curriculum-lacks-entrepreneurship-basic-
business-money-management-skills/> Accessed: [31/07/12].

Mwenda, A. (2007) “Andrew Mwenda takes a new look at Africa”. TED Talks [Video]. Available at:
<http://www.ted.com/talks/andrew_mwenda_takes_a_new_look_at _africa.html> Accessed:
[30/04/12].

Nielsen, L. (2011). “Classifications of Countries Based on Their Level of Development: How it is

Done and How it Could be Done”. IMF Working Paper: Strategy, Policy and Review Department,
Vol.11, No.31. Available at: <http://www.imf.org/external/pubs/ft/wp/2011/ wp1131.pdf> Accessed:
[24/07/12].

Naudé, W., Szirmai, A. and Goedhuys, M. (2011). “Innovation and Entrepreneurship in Developing
Countries”. United Nations University, Policy Brief, No.1, pp. 1-8.

94
Nyambayo, A. (2008). “Succeeding in Turbulent Times”. Ch. 1-5, pp.1-99, Typocrafters Printers
(Pvt) Ltd, Harare.

Organisation for Economic Cooperation and Development [OECD]. (2012). “ Aid Satistics,
Recipient Aid at a glance”. Zimbabwe, [Online]. Available at:
<http://www.oecd.org/dataoecd/12/60/1883524> Accessed: [24/07/12].

Organisation for Economic Co-operation and Development [OECD]. (2011). “African Economic
Outlook 2011”. Available at:
<http://www.oecd.org/countries/zimbabwe/africanec onomic outlook 2011.htm> Accessed:
[03/08/12].

Organisation for Economic Co-operation and Development [OECD]. (2004). “Promoting

Entrepreneurship and Innovative SMEs in a Global Economy”. OECD Ministerial Confrence on
SMEs, Istanbul 2004, pp.1-43. Available at: <http://www.oecd.org/dataoecd/5/24/31919590.pdf>
Accessed: [03/08/12].

Oppenheim, A.N. (1992). “Questionnaire Design, Interviewing and Attitude Measurement”. New
Ed., Continuum, London.
Passport GMID [Global Market Information Database]. (2012). “Zimbabwe: Country Factfile”.
Euromonitor International. [Online]. Accessed: [12/06/12].

Pedersen, P.O. (1992). “Entrepreneurs and managers in Zimbabwe’s district service centres”.
Entrepreneurship and Regional Development, An Internantional Journal, Vol.4, No.1, pp.57-72.

Pink, D. (2009). “The Surprising Science of Motivation”. TED Talks, August, 2009 [Video]. Available
at: <http://www.ted.com/talks/dan_pink_on_motivation.html> Accessed: [07/08/12].

Prabhu, J. Tellis, G. and Chandy, R. (2010) “Creating a Culture of Innovation: Why corporate
culture is key to radical innovation in firms”. pp. 5-22. AIM Research, London.

Prahalad, C.K. (2010). “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through
th
Profits”. 5 Ed., Part I-II., pp.1-136. Pearson Education, New Jersey.

Puri, M. and Robinson, D.T. (2006). “Who are Entrepreneurs and Why do they Behave that Way?”
Duke University, pp.1-37.

Polanyi, M. (1966). “The Tacit Dimension”. The University of Chicago Press, London.

Rankin, N. (2006). “Leadership ‘is in our genes”. Journal of Competency and Emotional
Intelligence, Vol.14, No.1, pp.1-4.

Ratten, V. and Welpe, I.S. (2011). “Special issue: Community -based, social and societal
entrepreneurship”. Entrepreneurship and Regional Development: An International Journal, Vol.23,
No.5-6, pp.283-286.

Riddle, L. and Brinkerhoff, J. (2011). “Diaspora entrepreneurs as institutional change agents: The
case of Thamel.com”. International Business Review, No.20, pp.670-680.

Robinson, S. (2000). “Key survival issues: Practical steps towards corporate environmental
sustainability”. Corporate Environmental Strategy, Vol. 7 Issue 1, p92-105.

95
Robinson, K. (2006). “Ken Robinson says schools kill creativity”. TED Talks, [Video]. Available at:
<http://www.ted.com/talks/lang/en/ken_robinson_says_schools _kill_creativity.html>
Accessed:[20/08/12].

Rosa, P., Kodithuwakku, S. and Balunywa, W. (2006). “Reassessing Necissity Entrepreneurship in

Developing Countries”. Institute of Small Business and Entrepreneurship [ISBE], Cardi ff, pp.1-13.

Sarasvathy, S.D. (2003). “What makes entrepreneurs entrepreneurial?” The Darden Graduate
School of Business Administration, University of Virginia, pp.1-9.

Silverthorne, S. (2009). “Government’s Positive Role in Kick -Starting Entrepreneurship”. Harvard

Business School, Q&A with Josh Lerner. Available at: <http://hbswk.hbs.edu/item/6318.html>
Accessed: [25/07/12].

Svendsen, G.L.H., Kjeldsen, C. and Noe, E. (2010). “How do private entrepreneurs transform local
social capital? Four case studies from rural Denmark”. Journal of Socio-Economics, No.39, pp.631-
644.

The Heritage Foundation (2012). “Zimbabwe”. 2012 Index of Economic Freedom. [Online].
Avialable at: <http://www.heritage.org/index/country/zimbabwe> Accessed: [12/06/12].

The Oxford Dictionary of English, (2010). "society noun". Ed. Catherine Soanes and Angus
Stevenson. Oxford University Press, 2005. Oxford Reference Online. Oxford University Press.

The World Bank Group. (2011). “About Development”. The World Bank. Available at:
<http://go.worldbank.org/N174APV2T0> Accessed: [25/07/12].

The World Entrepreneurship Forum. (2008). “Promoting Entrepreneurial Spirit”. Available at:
<http://www.world-entrepreneurs hip-forum.com/index.php// Think-Tank/Promoting-entrepreneurial-
spirit> Accessed: [27/0712].

The Zimbabwean. (2012). “Policy vacuum unsettles Diasporans”. The Herald, ZNCC Daily
Newsletter, 05 March 2012 [Online]. Available at:
<http://www.thezimbabwean.co.uk/business/industry/56756/policy -vacuum-unsettles-
diasporans.html> Accessed: [09/08/12].

Thomas, D.R. (2003) “A General Inductive Approach for Qualitative Data Analysis”. University of
Aukland, August, pp.1-9 Available at:
<http://www.fmhs.auckland.ac.nz/soph/centres/hrmas/_docs/Inductive2003.pdf> Accessed:
[10/05/12].

Tiessen, J.H. (1997). “Individualism, Collectivism, and Entrepreneurship: A Framework for

International Comparative Research”. Journal of Business Venturing, Vol.12, pp.367-384.

Tremayne, J. (2009). “Sustaining momentum: Get the rundown on sustainability before your
resources run out”. Smart Business Dallas. [Online] Available at:
<http://www.sbnonline.com/2009/01/sustaining -moment um-get-the-rundown-on-sustainability-
before-your-resourc es-run-out-2/> Accessed: [12/07/12].

96
United Nations Conference on Trade and Development [UNCTD]. (2002). “UN recognition of the
problems of land-locked developing countries”. [Online]. Available at:
<http://archive.unctad.org/Templates/Page.asp?intItemID=3619&lang= 1> Accessed: [24/07/12].

United Nations Educational, Scientific and Cultural Organization [UNESCO]. and International
Labour Office [ ILO]. (2006). “Towards an Entrepreneurial Culture for the Twenty -First Centruy:
Stimulating Entrepreneurial Spirit through Entrepreneurship Education in Secondary Schools”.
st
Secondary Education in the 21 Century. Available at:
<http://unesdoc.unesco.org/images/0014/001470/147057e.pdf> Accessed: [21/06/12].

Vallier, D. and Peterson, R. (2009). “Entrepreneurship and Economic Growth: Evidence from
emerging and developed countries”. Entrepreneurship and Regional Development, Vol.21, Nos. 5-
6, pp.459-480.

Van der Zwan, P., Verheul, I. and Thurik, R. (2011). “Drivers of Female Entrepreneurial Activity
Across Countries: Choice or Barriers?”. Centre for Advanced Small Business Economics,
International Council for Small Business, pp.1-11.

Van Vugt, M., Hogan, R. and Kaiser, RB. (2008). “Leadership, Followership and Evolution: Some
lessons from the past”. American Psychologist, Vol. 63, No. 3, 182–196.

Vasconcelos, A.F. (2008). “Broadening even more the internal marketing concept”. European
Journal of Marketing, Vol.42, No.11/12, pp.1246-1264.

Wignaraja, G. (2003). “Promoting SME Exports from Developing Countries”. Organisation for
Economic Co-Operation and Development [OECD]. Available at:
<http://www.oecd.org/dataoecd/12/54/20167784. pdf> Accessed: [03/0812].

World Bank. (2012). “GDP per capita: Current US$”. [Online]. Available at:
<http://data.worldbank.org/indicator/NY.GDP.PCAP.CD> Accessed: [31/08/12].

World Bank. and International Finance Corporation [IFC]. (2012). “Doing Business: in a more
transparent world”. Comparing Regulation for Domestic Firms in 183 Economies. [Report]. pp. 1-
212.

World Trade Organisation [WTO]. (2012). “Who are the developing countries in the WTO?”.
[Online]. Available at: <http://www.wto.org/english/tratop_e/devel_e/d1who_e.htm> Accessed:
[24/07/12].

Zimbabwe National Chamber of Commerce [ZNCC] a. (2012). “2012 National Budget Analysis”.
[Online]. Available at:
<http://www.zncc.co.zw/index.php?option=com_content& view=article&id=24& Itemid=55>
Accessed: [12/04/12].

Zimbabwe National Chamber of Commerce [ZNCC] b. (2012). “SMEs”. [Online]. Available at: <
http://www.zncc.co.zw/index.php?option=com_content& view=article&id=19&Itemid=22> Accessed:
[12/04/12].

97
8. Appendices

APPENDIX A

Promoting Entrepreneurial Spirit

(The World Entrepreneurship Forum, 2008)

Reform Regulations Create New “Entrepreneur Promote Proper Governance

Friendly” Institutions

To promote a truly Introduce new-style Set forth a governance framework

entrepreneurship-centred entrepreneurship-friendly support which unambiguously encourages
business climate, reform tax and institutions that provide risk-taking, while also ensuring
regulatory environments so as to technological knowledge, market that ethics lapses, corruption, and
make it easier, faster, and less information, business know-how, neglect of environmental
costly for entrepreneurs to set up certification services, access to sustainability carry a high cost to
enterprises, grow them if they are capital, and other essential reputation.
successful, or close them if not; business support.
minimize the time they spend on
licenses, tax procedures, litigation
and other similar activities.

Create and Early Education Foster Positive Develop Young Adult

Entrepreneurial Curricula Entrepreneurial Attitudes Curricula

Include within schools a curricula Foster a cultural context where Include within an education
that promotes the development of entrepreneurship has a positive curricula practical elements of
the skills and attitudes that are the image and where entrepreneurial entrepreneurship and business
hallmark of entrepreneurship, such success is publicly celebrated. development so as to increase the
as: Creating a vision, entrepreneurial IQ within the
perseverance, creativity, spotting community.
needs, empathy, leadership,
dealing with ambiguity, risk-taking,
and follow-through.

Promote Lifelong Empower Entrepreneurial Understand

Entrepreneurial Education Women, Minorities and the Entrepreneurship
Disadvantaged

Provide entrepreneurs lifelong Support programs must also Make it known that entrepreneurs
learning and development specifically target women, are positive agents of social
platforms for sharing of experience minorities, and the disadvantaged. change, wealth creation,
and best practices, coaching and Further, governments should transparency, sustainability, and
mentoring, mutual support, and implement laws and policies that innovation.
international networking, with the ensure that entrepreneurs are
strong support of key stakeholders sensitive to gender empowerment
from business and civil society. as well as diversity promotion.

98
APPENDIX B

Common Elements in Promoting Competitive Entrepreneurship

(Wignaraja, 2003)

• A stable, predictable macroeconomic environment for enterprise development

characterised by low budget deficits, tight inflation control and competitive real exchange

rates.

• An outward-oriented, market-friendly trade regime emphasising the dismantling of import

controls and tariffs to send signals to SMEs to restructure complemented

by strong export support in the form of duty-free access to imported raw materials and an

efficient trade promotion organisation providing marketing assistance for

SMEs;

• Streamlining of bureaucratic procedures and regulations affecting small business start-

up, operation, importing and exporting including business registration, business

expansion, value added tax administration, customs regulations and export procedures .

• Increased training at SME-level including assistance for SME associations to launch

training schemes, information campaigns to educate SMEs about the benefits of training,

tax breaks for training and specialist entrepreneur development courses at existing

universities and polytechnics.

• Comprehensive technology support for SMEs in the areas of quality management,

productivity improvement, metrology, other technical services and Internet access.

Appropriate measures might include grants for SMEs to obtain ISO9000/14000

certification, creating productivity centres for SMEs and re-organising public technology

institutions to provide better services for SMEs, support for computer purchase and

Internet diffusion.

99
• Access to SME finance at competitive interest rates through prudent monetary policy

management, competition in the banking sector, training for bank staff in assessing SME

lending risks, micro-finance and specialist soft loans for SMEs.

• Programmes to foster the emergence and deepening of a few, selected industrialclusters

in line with comparative advantage. Appropriate measures might the provision of training,

technical support and finance for particular industries and geographical locations.

• An efficient and cost-competitive infrastructure for enterprise development with respect

to air and sea cargo, telecommunications, Internet infrastructure and electricity. Some

specialist infrastructure schemes for SMEs (e.g. industrial estates and reduced Internet

charges) might be appropriate depending on local circumstances.

100
APPENDIX C

Interview Guide

1. Who are entrepreneurs within a Zimbabwean context?

2. Would you be able to describe the role of these entrepreneurs and their
enterprises within this country/economy/society?
3. Which sectors would you say have the highest levels of entrepreneurial activity?
4. Could you describe the typical nature of the entrepreneurial ventures established
within the sectors you mentioned as being highly populated with entrepreneurial
activity?
5. What would you say are the major shortcomings or challenges entrepreneurs
within this country face?
6. Necessity versus opportunity led entrepreneurship, what would you say is more
prevalent within this country?
(Why)
7. What would you say the shortcomings or challenges the support infrastructure
faces in assisting entrepreneurs and their businesses?
8. In your opinion, how could we go about resolving or overcoming some of the
shortcomings and challenges that you’ve highlighted?
9. What are the main policies and legislations in place to support entrepreneurial
activity?
10. What effect do the current policies have on entrepreneurial activity?
(Positives & Negatives)
11. What financial support is accessible/available to individuals or groups who are
trying to start-up a business?
12. What financial support is accessible/available to existing small and medium
enterprises?
13. What support infrastructures i.e. organisations are in place and dedicated to
entrepreneurial/SME initiatives?
14. What education/training/mentoring programmes or assistance is offered to
aspiring, nascent and existing entrepreneurs within this country?
15. What would be your advice as to how high value entrepreneurial activity could be
nurtured within this country?
16. Which sectors should Zimbabwe be focusing or dependent upon for economic
growth?

101