Africa is the poorest region in the world and the only major
developing region with a negative growth in income per capita over the
past two decades (Sachs et al., 2004: 117). Can entrepreneurship make a
difference to economic growth and development in Africa? Answering this
question would require rigorous research into African entrepreneurship.
However, compared to research on entrepreneurship elsewhere in the
world, and the extensive scientific debate on entrepreneurship in Europe
and the United States, entrepreneurship research in Africa is relatively
lacking. This lack is reflected in the fact that a number of recent
in-depth scientific reports on the causes and remedies of Africa's
slow economic growth performance fails to discuss entrepreneurship at
all (Sachs et al., 2004; Fafchamps et al., 2001; Collier and Gunning,
In contrast to the relative lack of scientific debate on African
entrepreneurship, policy makers in Africa, and some donor countries, are
claiming that entrepreneurship can make important contributions to
economic growth and development. For example a recent report by the
South African Department of Trade and Industry states, "the
government is now turning its attention to looking at entrepreneurship
development and the promotion of self-employment as strategies that can
help to overcome the unemployment problem and propel the economy to
higher rates of growth. (DTI, 2000: 4).
If policy makers are to be successful in this, more research on
African entrepreneurship will have to be carried out and disseminated.
Where and how should this research be focused? To provide some initial
answers to this question, it is the purpose of the present study to give
an overview of the current state of entrepreneurship research in Africa
based on the compilation of a comprehensive bibliography of African
entrepreneurship research. This is the first time that such a
bibliography has been attempted for Africa. We took our example from two
international bibliographies of entrepreneurship and SMEs. (1) Both were
published in the United States and are particularly comprehensive in the
coverage of literature worldwide, but not with regard to Africa. The
present study is aimed at rectifying this omission. Through the
compilation of such a bibliography, one can provide an indication of the
quantity of scientific research on African entrepreneurship, the topics
within entrepreneurship this research addresses, and the countries in
Africa where the scientific debate on entrepreneurship is most intense.
From this overview, we will also be able to glimpse some of the current
directions that African entrepreneurship research is taking.
The paper is structured as follows: in the next section (section 2)
we briefly discuss the concept of entrepreneurship for purposes of this
study and to illuminate the African context. Section 3 discusses the
methodology this paper follows in identifying and categorizing African
entrepreneurship research between 1963 and 2001. Section 4 summarizes
the main findings with respect to the topics, frequency and country
studied in African entrepreneurship research over the period. In section
5 we identify seven questions (or directions) in African
entrepreneurship research that seems topical. Section 6 concludes this
The Concept of Entepreneurship
There is no commonly accepted definition of entrepreneurship and
the concept defies easy measurement. It is a multidimensional concept
and the definition used will depend on the focus of the research taken
(Verheul et al., 2001: 4). Most often, especially in Africa, the term or
concept is equated with self-employment. The term self-employment refers
to people who provide employment for themselves as business owners
rather than seeking a paid job. In Africa, a large part of the
self-employed is in the informal sector, as we will show below, a
correspondingly large part of entrepreneurship research in Africa draws
on studies on informal enterprises. Defining entrepreneurship as
self-employment is consistent with the Global Entrepreneurship Monitor
(GEM) project's definition of entrepreneurship as "Any attempt
at new business or new venture creation, such as self-employment, a new
business organization, or the expansion of an existing business, by an
individual, teams of individuals, or established businesses. (Reynolds,
Hay and Camp, 1999).
The entrepreneurship literature indicates a difference between
entrepreneurship and small business promotion. Indeed, from the
definition above, it is clear that entrepreneurship is a much broader
concept than small business. However, small businesses are often seen as
the 'seedbeds. of entrepreneurship or one of the key
"vehicles. of entrepreneurship (Acs, 1992: 38). As such,
entrepreneurship and small business research are often intertwined. In
Africa, the relationship between entrepreneurship and small business
research is even closer. This is because small businesses (SMEs)
predominate in Africa to a larger extent than elsewhere. The size
distribution of firms in Africa is heavily skewed, with a much higher
proportion of very small firms than can be found elsewhere (Bigsten et
al., 2001; Tybout, 2000). (2)
In the directions taken by entrepreneurship research in Africa
(section 5 below) we note that the relationship between a firms size and
the manner in which it constrains entrepreneurship provide the basis for
this paper's research.
The study area included all the countries of Africa and, to a
certain extent, other parts of the world where academic and scientific
publications appeared with regard to Africa. Sources ranged from
scientific indexes, book bibliographies, theses and dissertations,
academic and professional journals, conference papers, popular journals,
and internet sources. It was not the intention to compile a listing of
any type of publicized information on entrepreneurship and SMEs, but to
concentrate on those that have scientific and academic value.
In total, just over 500 scientific publications on African
entrepreneurship spanning the years 1963 to 2001 were identified (Table
Each entry in the bibliography was classified according to author,
year, country, and subject. Altogether, 15 subjects or topics were used
to classify output. These 15 are:
1. Definitions, Concepts and Methodology
2. The Role of Entrepreneurship in Africa
3. Characteristics of African Entrepreneurship
4. Determinants, Constraints and Opportunities
5. Government, Support and Policy
6. Women Entrepreneurship
7. Informal Sector
8. Agriculture and Rural Development
9. Technology and Innovation
10. Culture, Networks and Clusters
11. Management, Education and Skills
12. Legislation, Institutions and Regulations
13. Financial factors, Credit and Information
In the next section we summarize the main features of African
entrepreneurship research as reflected in the bibliography. Frequency
and Topics of Research on African Entrepreneurship (1963.2001)
There has been a significant growth of entrepreneurship research in
Africa since 1980. Between 1963 and 1978 only 54 publications, or an
average of 3.38 per year were produced. This may be attributed to the
fact that African countries were still unaware that entrepreneurship and
SMEs could play a major part in the economic development and growth of
developing countries. However, in the past two decades the world became
more aware of SMEs contribution to the economies of countries and the
way in which this contribution can enhance the development and growth of
third world countries. This resulted in a dramatic increase in research
output in this field. Welsch (1992: 1) states that even in the US
academia began to take notice of this self-employment phenomenon only in
the late 1970s and early 1980s.
Since 1980 however, more than 466 or 89.6% of the total number of
publications identified in our bibliography were produced. The growth in
African entrepreneurship publications is depicted in Figure 1. As Figure
1 and Table 1 indicate, since the late 1980s there was a significant
increase in entrepreneurship research in Africa. This corresponds with
the implementation of structural adjustment programs (SAPs) in many
The data in Table 1 was broken down into the subject countries.
This is contained in Table 2 below.
Distribution of Research Output
It can be seen from Table 2 that 61.2% of all African
entrepreneurship research concerns South African entrepreneurship and
small business. About 12% is general, followed by research on Zimbabwe
(5.0%), Nigeria (3.8%) and Kenya (3.72%). Table 2 also shows that 70% of
all research was published between 1990 and 2001.
Publications per Topic
Using the 15 topics described in section 3, the publications on
African entrepreneurship identified were sorted per topic and per
period. This gives an indication of the topical areas in African
entrepreneurship research since the 1960s. From Table 3 can be seen that
by far the largest number of entrepreneurship research in Africa deals
with education, management, and skills issues (14.2%) and determinants,
constraints and opportunities of entrepreneurship (14.0%). Studies on
the role or contribution of entrepreneurship are also frequent (10.38%).
The least frequent research topic is on the role of finance, credit and
It can be seen from the table that, initially, African
entrepreneurship research was very general (1960s). During the 1970s the
focus was placed on the history of African entrepreneurship and the role
of culture and networks. During the 1980s the focus shifted to the
informal sector, the characteristics of African entrepreneurs and
education and training.
Table 3 shows that during the 1990s education and training remained
the dominant research theme in African entrepreneurship, followed by
characteristics of African entrepreneurs. Noticeable during the 1990s
was the interest in the role that entrepreneurship could play as well as
the emergence of research on women's entrepreneurship. These trends
in research reflects the greater acceptance of free and liberalized
markets in Africa after the Cold War ended in 1989 and the greater
recognition of the rights of women in the 1990s.
Themes in African Entrepreneurship Research
The issues addressed in African entrepreneurship, as detailed
above, can broadly be summarized as issues dealing with the determinants
of African entrepreneurship (including its obstacles) and the effects of
government on small business and entrepreneurial support measures for
entrepreneurship, such as education and training.
What are the main findings and gaps for future research that may
come from this? We put forth a number of directions, without necessarily
being exhaustive, that current entrepreneurship research in Africa is
taking. Entrepreneurship and Economic Growth?
There is relatively little research (as compared to elsewhere) on
the effect of entrepreneurship on economic growth and development and
vice versa. For instance, recently the issue of whether entrepreneurship
leads to lower unemployment or vice versa, resulted in an intense
scientific debate in Europe and the US (Audretsch et al., 2001). It
seems to be accepted, especially in government circles, that
entrepreneurship development will have beneficial effects for Africa.
However, the current findings from Africa are much more sober on these
prospects. Bewayo (1995), from a study of Ugandan entrepreneurs,
concludes that African entrepreneurs tend to emphasise "economic
survival," "making a living," and "providing for
family. as reasons for going into business. Also, high-economic growth
may discourage entrepreneurship by leading to higher wages and therefore
raising the opportunity costs of self-employment. Verheul et al. (2001:
12) remark that 'several arguments have been brought forward
supporting a negative impact of economic growth on the level of
In Africa high unemployment might be associated with a low degree
of entrepreneurial activities, and low economic growth might be the
cause of low entrepreneurship development (Audretsch, 1998). High
economic growth, on the other hand, may discourage entrepreneurship if
it is accompanied by rising wages. One explanation that would need
further research is whether this direction of causality is true for
Africa, and whether the levels and quality of human capital in Africa
impacts on the direction of causality.
The survivalist nature of entrepreneurship in Africa is emphasised
by Kesper (2000: 1) as a weakness of entrepreneurship with the
implication that SMEs might not be leading economic growth growth but
following it. She states:
Thus, the implication is that a broad approach to provide support
to entrepreneurs only really helps survivalist firms and thus acts as
some break on poverty. If job creation and some of the other goals are
to be realistic, then fine-tuning, targeting, and picking winners may be
a better way to implement entrepreneurial support programs. For these to
be successful would, however, require of government to build and
maintain better data on SMEs. Such data in Africa is extremely poor.
There is also a lack of information on employment, sales, sector, etc.
of SMEs. In particular, future research should result in more
longitudinal survey data on SMEs to be able to also scientifically gauge
the impact of support measures on entrepreneurs and their firms.
Small Businesses as Vehicles for Entrepreneurship
There is a need in Africa for more research on the relation between
entrepreneurship and firm size. We have already commented on the fact
that the size distribution of firms in Africa is heavily skewed towards
small firms. Moreover, existing research finds that while
entrepreneurship support programmes may lead to a rapid rise in the
number of businesses, the average size of businesses tends to be
constant (Fafchamps, 1994). A study covering Kenya, Swaziland, Zimbabwe,
Botswana, and Malawi found that only 0.9% of the surveyed firms grew to
10 employees or more over a five-year period (Liedholm et al., 1994).
Most start-ups stagnated at start-up size (1 to 4 persons). It could be
interesting, given the possible need for larger firms in Africa, to
determine which characteristics of entrepreneurs are positively
associated with firm size.
There are, of course, many large firms in Africa. Most of these are
multinational enterprises (MNEs). Indeed, as Coughlin (1998) remarks,
"Africans own very few medium or large-sized manufacturing firms..
Gilroy et al. (2002) point out that there is a lack of sufficient
research on the role and impact of MNEs in Africa. Better research on
the dynamics of MNEs in Africa may throw more light on the determinants
of small firm size in Africa as well as local indigenous
industrialization, and the functioning of networks, and the success or
failure of industrial clusters.
Naude and Krugell (2002) identify a number of factors in the
structural and institutional landscape in Africa that may limit firm
size. These are shortcomings in Africa's legal and financial
systems, human capital endowment, market size, and social fragmentation.
There is evidence that the macro-economic policy framework in
Africa, specifically tax policy, may influence firm size. Specifically,
biases in tax policy may favour the creation of smaller firms as a way
of avoiding taxes and regulations. Gauthier and Gersovitz (1997) find
evidence in Cameroon that small firms prefer to remain small and
informal in order to avoid taxes while large firms were influential
enough to obtain special treatment. It was the mid-sized firms that bore
the highest tax burden with the result that the distribution of firm
size in Africa is characterised by a "missing middle."
Finally, it noted that large firms require more managerial than
technical capacities to oversee and coordinate the business. This
creates a more urgent need for formal education and training of
entrepreneurs in Africa. Formal education increases the learning
capabilities of individual, thereby raising entrepreneurial efficiency
and resulting in more successful firm growth (Goedhuys and Sleuwaegen,
2000: 141). It has been found that there is a clear correlation between
entrepreneurial education and firm size in Africa: a much higher
percentage of entrepreneurs managing medium and large firms have
university degrees than those managing very small firms. The provision
of appropriate training for entrepreneurs in Africa is also an avenue
for future research as far as it related to the ability of African
entrepreneurs to learn how to export. The importance of entrepreneurship
for exports, and the possible importance of exporting for
entrepreneurship development, is explored below.
Entrepreneurs, International Trade and Globalisation
A third critical area for entrepreneurship research in Africa is
the relationship between African entrepreneurship, international trade,
and globalisation. According to Soderbom and Teal (2001: 20), "The
poor performance of manufacturing in most African countries is arguably
due to its inability to export its products.. Africa's (in
particular sub-Saharan Africa's) share of world trade fell
dramatically over the past 40 years. The region's share of world
exports declined from 3.1% in 1955 to 1.2% in 1990. There was also major
erosion of the region's ability to compete in international
markets, and Africa lost ground in key commodity exports (Ng and Yeats,
Exporting, are seen as one of the few possible strategies for
economic growth open to Africa (Fafchamps et al., 2001). Enlargement of
the effective market size through exports generates a number of
technological benefits (Krueger, 1981). Indivisibilities in production
are overcome and firms can use the minimum efficient plant size, utilise
all of their capacity, and exploit economies of scale (Balassa, 1978;
Feder, 1982; Jung & Marshall, 1985; Moschos, 1989). In addition,
trade introduces international competition (Chow, 1987). There is
competitive pressure to reduce X-inefficiency, (Jung and Marshall,
1985), and it necessitates technological improvements (Ram, 1985;
Moschos, 1989) and more efficient management (Feder, 1982). Thus,
exports tend to increase total factor productivity (Balassa, 1978).
These benefits also spill over to non-exported products that can then be
produced more efficiently (Tyler, 1981). All of the latter could suggest
that more manufacturing exports from Africa could boost entrepreneurship
development in a Schumpeterian sense. However, low entrepreneurship
development could also impact, through lower firm efficiency, on lower
exports from Africa. The question is: will greater exports facilitate
the development of entrepreneurs or will better entrepreneurs result in
higher levels and growth rates of exports? Or is there two-way
Bigsten et al. (1999) use the RPED firm-level panel data for
Cameroon, Ghana, Kenya, and Zimbabwe to estimate the effect of exporting
on efficiency. Measures of firm-level efficiency using stochastic
production frontier models are constructed for the period between 1992
and 1995. The results of both random effects and time-variant
productivity models reveal that exporters are more efficient than
nonexporters. Furthermore, exporters increased their efficiency during
the period more rapidly than non-exporters, and new entrants to
exporting had the largest subsequent efficiency gains. The effect of
exporting on efficiency appears to be larger in this African sample than
in comparable studies of other regions that are consistent with the
smaller size of domestic markets.
A concern expressed by Naude et al. (2002) is that large firms do
most currently exporting from Africa. Small manufacturing firms in
Africa often cannot bear the high, fixed cost involved in exporting. (4)
Thus, strategies aimed at increasing African exports should focus on
providing additional support to entrepreneurs in small firms and focus
on mechanisms to reduce the high fixed costs in exporting. There are
various ways in which industrial clusters and networks can provide
economies of scale and scope to allow firms to lower fixed costs in
exporting. The question of African enterprise clusters is addressed
Trade restrictions are a major reason why African entrepreneurs
have difficulty learning how to export. Teal (1999) finds that African
trade barriers are far more restrictive than that of any other region.
The divergence in the case of non-tariff protection is even sharper.
This limits the size of the internal market and prevents firms from
reaping economies of scale or learning how to export (see Naude et al.,
2000; Fafchamps et al., 2001). Although increasing competition in
international markets may lead to many small firms closing down, this
trade liberalization may be good for entrepreneurship development.
Entrepreneurial Networks and Clusters
A fourth area of research that needs to be explored is on
entrepreneurial networks and clusters. (5) Networks and clusters provide
information, assistance, and examples and they stimulate innovation and
transfer technology and skills (Brautigam, 1998: 3). In this way,
networks can help new entrepreneurs to enter into self-employment since
they reduce search costs while also lowering the risks of embarking on a
new venture. There are two interrelated strands in African
entrepreneurship literature. The first strand relates to industrial
clusters and attempts to ask what contribution industrial clusters can
play in Africa and why there is a lack of significant industrial
clusters in Africa. The second strand relates to entrepreneurial
networks and the role of social capital in strengthening them.
Clusters have been identified as important for African
entrepreneurs. Further research into clusters can be justified with
reference to learning by small firms and because small firms succeed in
exporting to the degree of larger firms when they make use of networking
and externalities in industrial districts (Schmitz, 1995). For instance,
Schmitz (1999: 465) writes that, "case studies have emerged from
various parts of the world showing that clusters of small enterprises
have broken into international markets.. According to Oostendorp (2001:
1), "if size is not helping African firms to become successful
exporters, other factors need to compensate for this, such as higher
levels of firms efficiency, lower transport costs, or higher product
quality.. Clustering and network effects may provide this compensation
as such clustering enables SMEs to obtain efficiency gains through
collective efficiency as a result of local external economies and joint
In this respect it is important to ask why there is a lack of
significant industrial clusters in Africa. Two related reasons have been
noted in the research literature, namely low levels of efficiency of
small firms and a low incidence of subcontracting between large and
small firms (McCormick, 1999). As Berry(2000: 12) recognizes,
"contractors are not willing to invest their time or efforts with
sub-contractors which are not close to being efficient producers. And a
cluster must have a high level of collective efficiency if it is to
compete in world markets." This may also explain the success of
East Asia and Latin America (as well as of some European countries) in
achieving rapid growth of exports from small firms, specifically, that
the efficiency of the small firms allowed for successful establishment
of clusters and sub-contracting (Berry, 2000: 12).
Further reasons may require more in depth research into the role of
local governments and industrialisation in Africa. For instance,
research in Europe (Italy) has pointed to the important role that local
municipalities played in stimulating the development of industrial
clusters and networks. Such research on the municipal-entrepreneurial
interface in Africa is lacking. Furthermore, the little existing
research on industrial clusters and networks in Africa seems to suggest
that many of the small industrial clusters found in Africa appear to
have developed out of market towns rather than out of vertical sectoral
disaggregation. According to Pedersen (1997: 14), "They are often
characterized by very limited vertical specialization and
diversification and may develop into clusters of petty commodity
producers rather than full-blown industrial clusters. This may be one
reason for the limited success of many African enterprise
As stated, the second strand of research on networks in Africa
focuses on entrepreneurial networks and social capital. Whilst related
to work on industrial clusters, this strand of research attempts to
identify the different types of networks used by African entrepreneurs
and the functions of the different types of networks. Barr (2002)
discusses "innovation networks. and 'solidarity networks. in
Africa, drawing on research from Ghana. Innovation networks fulfill the
function of improving firm performance by allowing information about the
world to flow between members whilst solidarity networks are designed to
reduce uncertainty. Barr (2002) finds that the latter type of network
dominates in Africa due to the fact that the uncertainty faced by
African entrepreneurs is paramount: "Much of the uncertainty facing
enterprises in sub-Saharan Africa is due to a lack of contract
discipline leading in turn to delayed supplies, unreliable quality and
late payments and repayments by customers. (Barr, 2002: 94).
Given the importance of solidarity networks in lowering
uncertainty, factors negatively impacting on these networks will lower
the survival rate and success rate of firms. Thus lower entrepreneurial
efficiency in Africa may be partly due to lower levels of social capital
(6) or lack of social cohesion. Africa's ethnolinguistic
fragmentation has been identified as a factor that might undermine
networks. Africa's median level of ethnolinguistic fragmentation is
0.73 versus 0.21 in non-African countries (Block, 2001: 457). Easterly
and Levine (1997) find that this ethnolinguistic fragmentation
undermines growth in Africa. Not only may lack of social cohesion
undermine the efficiency of entrepreneurs in Africa, but it may also be
a cause of the skewed distribution of firm size in Africa in that the
coordination problems in an ethnolinguistically fragmented society may
be prohibitive for the establishment and management of large firms. The
importance of social capital in strengthening entrepreneurial networks
is thus an important direction of research in Africa (Barr, 2002;
Fafchamps, 1992; Brautigam, 1997).
African research has made important strides in understanding the
role of 'special. groups of entrepreneurs, most notably women
entrepreneurs and ethnic minorities. The African literature on minority
entrepreneurship suggests that contractual mechanisms generated within
ethnic groups are crucial to providing access to inputs, credit,
technology, and finance. This in turn leads to greater profitability and
growth of firms within the network. Empirical evidence from the World
Bank's Regional Programme on Enterprise Development (RPED)
indicates that minority entrepreneur firms do enjoy a higher rate of
firm growth. This finding is consistent with the marginalisation theory
of entrepreneurship, wherein a person's marginal social position
acts as a driving force in their becoming self-employed.
Financial Constraints and Entrepreneurial Success
One of the significant findings from the research literature on the
constraints on African entrepreneurs relates to the difficulty these
entrepreneurs face when attempting to access finance and credit. These
findings are substantiated by many surveys that find that personal
savings, and not bank loans, are the main source of start-up funding
amongst entrepreneurs in African countries (Grenier, McKay and
Morrissey, 1998; Parker et al., 1995). Another important finding is that
women entrepreneurs have more difficulty than male entrepreneurs to
The lack of external sources have been explained with reference to
financial underdevelopment, the small firm size prevalent, and lack of
collateral offered by entrepreneurs.
Africa has less financial depth than other developing countries due
to financial repression and a lack of openness. Collier and Gunning
(1999a, 1999b) provide a number of explanations as to why the financial
sector has remained underdeveloped. For instance it faces high natural
costs because there is little collateral, limited financial information,
and high risks intrinsic to shock prone economies.
There are also policy-generated costs that constrain financial
development, such as implicit taxation through financial (interest rate)
repression, taxation through unremunerated reserve requirements, and a
poor legal system for loan recovery. The nature of the banks also plays
a role. Public sector banks have often been diverted to other objectives
such as channeling off-budget funds for government expenditure. The
remaining private banks are oligopolistic in nature and concentrate on
As a result of the above factors, informal credit and insurance
schemes predominate in Africa. Although these are also subject to
limited financial information and a lack of collateral problems,
Fafchamps (1992) argues that networks may support such arrangements. It
has already been pointed out in section 5.4 that this is one reason why
firms in Africa owned by ethnic minorities tend to grow faster and be
larger. This underlines the importance of research into informal credit
schemes and entrepreneurial networks in Africa.
The Economic Geography of Entrepreneurship
According to Sachs (2001), geographical factors may be important to
understand the difficulties faced by entrepreneurs in Africa. Gallup,
Sachs and Mellinger (1998: 9) identify a number of geographic features
of Africa that hinder entrepreneurs. They show that Africa has a very
high concentration of land in the tropics, (7) a population heavily
concentrated in the interior, (8) more than a quarter of the population
in landlocked countries, (9) is far from the closest core markets in
Europe, and has low population densities in the coastal and interior
regions. These factors raise both domestic and international transport
costs. Naude (2001) discusses the adverse impact of high shipping costs
on South African exports.
The impact of high transport costs may be more significant in
Africa because of the lack of clusters and large firms in Africa. As a
result of high transport costs, small firms are required to hold large
inventories, the cost of which can be prohibitive for small firms
(Rodriguez-Clare, 1996). (10) Furthermore, many complementary inputs
into manufacturing require a close proximity to the supplier,
specifically such services such as banking, auditing, consulting,
wholesale services and machine repair. Due to Africa's geography,
these services are often wholly absent.
Audretsch (1998) points out that geography also matters for
innovative activity and the international comparative advantage of
regions because the kind of knowledge-intensive inputs required for
high-skilled modern manufacturing necessitate a significant amount of
tacit, as opposed to codified, knowledge. As he states (1998: 21),
"the marginal cost of transmitting knowledge, especially tacit
knowledge, rises with distance.. This need for technological expertise
in a globally competitive economy significantly raises the entry costs
for small firms into exporting, especially when compared to the
probability of 0.5 that the firm might fail within 3 years.
Diamond (1998: 398) argues that as far as geography is concerned,
it is especially climate and the environment for food production that
limit the development of entrepreneurship. The latter, according to him,
gave rise in Europe to guns and other technology, widespread literacy,
and the political organization necessary to sustain entrepreneurial
innovation and development. In sub-Saharan Africa, however, "Food
production was delayed by Africa's paucity of domesticable native
animal and plant species, its much smaller area suitable for indigenous
food production, and its north-south axis, which retarded the spread of
food production and inventions."
Acemoglu et al. (2001a, 2001b) argue against the dominating
influence of geography, claiming that differences in poverty are due to
differences in the institutions of society. This is in following a line
of scientists that focus attention on the fact that societies or regions
that provides incentives and opportunities for entrepreneurial
development will be richer than those that fail to do so.
Acemoglu et al. (2001b: 4) find that:
It was easier for European colonial powers to settle and transfer
their institutions in poorer, less sparsely populated areas, such as
Australia, New Zealand, and North America than in more prosperous and
populated areas such as tropical Africa. The subsequent reversal of
fortune that these areas experienced is consistent with the institutions
hypothesis, but not the geography hypothesis, since the underlying
geography and climate remain unchanged. Naude (2004) finds empirical
evidence supporting Acemoglu et al.'s (2001a) thesis and also finds
that geography has a determining effect on institutions in Africa.
Apart from high population densities and relatively prosperous
communities in places in Africa that prevented large-scale settlement by
European settlers, Acemoglu et al. (2001a) suggest that African
institutions are also worse due to high settler mortality in the era of
colonialization (due to malaria and yellow fever). This prevented the
transplant of colonial institutions that could have been beneficial for
entrepreneurial development. Thus Acemoglu et al. contend:
They subsequently find a strong and significant negative
association between per capita income growth and better rates of settler
mortality. Lal (1998) attempts to identify aspects of the colonial
institutions that were important from an economic welfare point of view.
In other words, why were the European institutions that were
transplanted to the colonies of Australia, North America, and New
Zealand good for poverty eradication? The view of Lal (1998) is that the
West's culture of individualism and norms that approve of
individual material advancement encourage institutions of private
property. During the subsequent scientifically and technologically
driven Industrial Revolution, "the age of industry created a
considerable advantage for societies with institutions of private
property. (Acemoglu et al., 2001b: 37). Today, intellectual property
rights, protection of innovations through patent rights, and
institutions such as subsidies and learning organizations are
acknowledged in the endogenous growth literature as essential for
economic growth and development (Temple, 1999).
The Role of African Entrepreneurs in Technological Catching-Up
African entrepreneurs need to enter the production and exports of
high-technological manufactured goods. One noted constraint faced by
many exporters of manufactured goods from Africa is the technological
obsoleteness of African goods, which renders these goods
non-competitive. Indeed one of the strong arguments for trade
liberalisation in African countries is that greater openness will allow
African entrepreneurs to more rapidly assimilate new technologies.
In theory, the fact that Africa has many small businesses could be
a positive factor in technological catching-up. It has been claimed that
small firms can better adopt new technologies and that as a result of
new technologies, the importance of scale economies has been reduced,
implying that in many sectors small firms do not face a disadvantage
anymore (Verheul et al., 2001: 12). Thus, adaptation of new technologies
could be vital for African entrepreneurs.
The literature from Africa suggests that the transfer of technology
is not straightforward, even in the presence of a liberal trade regime.
Africa's geography, lack of clusters, and high transport costs may
limit the transfer of much needed technologies. The so-called
"technological capability approach. (Nelson and Winter, 1982)
implies that technology cannot simply be transferred to an African
economy or African entrepreneur like a product. The reason is due to the
difference between capacity and capability: the former may exist but the
latter may not and would require a close proximity to be transferred and
adopted. Much new technology involves tacit knowledge and a learning
process. Distance and high transport costs thus make lack of a close
proximity a significant obstacle to entrepreneurship in Africa.
Furthermore, the influences of domestic policay may hinder the
transfer of technology to entrepreneurs. This is due to policy
influences that contribute to an institutional landscape in Africa that
is not conducive to learning by entrepreneurs (Wolf, 2001). Uncertainty
has been identified as a cause for this. Lall (2000: 5) points out that
"if the learning period, costs, uncertainties and leakages are very
high, co-ordination with other firms in the supply chain exceptionally
difficult, or information, labor and capital markets particularly
unresponsive, "difficult. knowledge may not be absorbed.. Research
should determine to what extent this applies to Africa and how a more
conducive learning environment for technological innovation and
adaptation can be established.
Summary and Conclusion
In Africa, the term or concept of entrepreneurship is often equated
to self-employment. The term self-employment refers to people who
provide employment for themselves as business owners rather than seeking
a paid job. In Africa, a large part of the self-employed is in the
informal sector. Given the potential importance of self-employment for
African economic development, it was the purpose of the present study to
give an overview of the current state of entrepreneurship research in
Africa based on the compilation of a bibliography of African
entrepreneurship research. To our best knowledge this is the first time
that such a bibliography has been attempted for Africa.
The study area included all the countries of Africa and, to a
certain extent, other parts of the world where academic and scientific
publications appeared with regard to Africa. In total, just over 520
scientific publications on African entrepreneurship spanning the years
1963 to 2001 were identified. There has been a significant growth of
entrepreneurship research in Africa since 1980. Between 1963 and 1979
only 54 publications, or an average of 3.38 per year, were produced.
Since 1980 however, more than 466or 89.61% of the total number of
publications identified in our bibliography were produced.
About 61.2% of all African entrepreneurship research concerns South
African entrepreneurship and small business. About 12% is general,
followed by research on Zimbabwe (5.0%), Nigeria (3.84%) and Kenya
By far the largest amount of entrepreneurship research in Africa
deals with education, management and skills issues (14.2%) and
determinants, constraints, and opportunities of entrepreneurship (14%).
Studies on the role or contribution of entrepreneurship are also
frequent (10.38%). The most infrequently researched topic is the role of
finance, credit, and information.
Initially, African entrepreneurship research was very general
(1960s). During the 1970s the focus was placed on the history of African
entrepreneurship and the role of culture and networks. During the 1980s
the focus shifted to the informal sector, the characteristics of African
entrepreneurs, and education and training. During the 1990s education
and training remained the dominant research theme in African
entrepreneurship, followed by characteristics of African entrepreneurs.
Noticeable during the 1990s was the interest in the role that
entrepreneurship could play as was the emergence of research on women
entrepreneurship. These trends in research reflect the greater
acceptance of free and liberalized markets in Africa after the Cold War
ended in 1989 and the greater recognition of the rights of women in the
The themes that research on African entrepreneurship is taking are
recognising that government policy measures in Africa have a significant
impact on the level and success of entrepreneurship. In this respect,
the research on African entrepreneurship is consistent with that from
other regions (Storey, 1994; 2003). In Africa, government impact on
entrepreneurship both directly (through, for instance, taxation,
education and training policies, and privatization) and indirectly
(through, for example, contributing to an uncertain policy environment,
damaging social capital, and creating institutional features that keep
African firms small). We have argued that the smallness of African firms
and the role of social network capital in overcoming the negative
features limiting African firm growth and survival, are important topics
for future research on African entrepreneurship.
Finally, African entrepreneurship research can benefit from
additional research to understand the behaviour of different types of
entrepreneurs in Africa (nascent, novice, portfolio, habitual, and
serial entrepreneurs in Africa) as Delmar and Davidsson (2000) note; to
determine the characteristics of entrepreneurial cognition in Africa
(Baron, 1998); and to investigate opportunity recognition and
information acquisition strategies in Africa (Gaglio, 1997).
We are grateful to Werner Havenga for his research assistance and
to two anonymous referees for their comments and suggestions.
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(1.) See Meyer and Brigham (2000) and Welsch (1992).
(2.) Even the large firms in Africa are not very large by world
standards, and SMEs tend to be very small. For example, almost 98% of
all firms surveyed in 1997 in six African countries (Botswana, Kenya,
Lesotho, Malawi, Swaziland, and Zimbabwe) had less than 10 workers (Mead
and Liedholm, 1998: 63). In a survey of 143 manufacturing firms in Ghana
between 1992 and 1994, Soderbom and Teal (2001) find that 81% of firms
are SMEs and 53% employ less than 30 workers. Even in South Africa, with
the largest business sector on the continent, SMEs dominate. It is
estimated that in South Africa there are about 800,000 SMEs (Naude and
Krugell, 2002) which is about 95% of the total number of firms (formal
(3.) Rodrik (1998) emphasises that one should keep in mind that
there were a variety of performances within the region.
(4.) Even in the US there have been increasing concerns as to the
ability of small firms to export. Ali and Swierz (1991: 77) find that
"the small business exporting environment is more complex than
previously thought and that future efforts to understand it will
require, at minimum, a fuller examination of the interrelationships
among size, export experience, and managerial attitudes."
(5.) Clusters are geographically agglomerated industries. For
example, they are charactized by a high density of business activity,
resulting in ideas and both cooperation and competition between
businesses (Verheul et al., 2001: 13).
(6.) Bourdieu (1985: 248) defines social capital as "the
aggregate of the actual or potential resources which are linked to
possession of a durable network of more or less institutionalised
relationships of mutual acquaintance or recognition."
(7.) In all parts of the world, economic development in tropical
zones lags far behind that in temperate zones. The underlying reason is
a backlog in productivity growth. Differences in productivity growth and
innovation between temperate and tropical zones reflect the interplay of
a number of factors. First, many kinds of agricultural and construction
technologies do not transfer well between ecological zones. Second,
temperate zones have long had much higher rates of endogenous
technological change than have the tropics. Third, the tropics pose
inherent difficulties in agriculture and public health. Fourth, the
tropics are disadvantaged because they are far from the large
(8.) They find that only 19% of sub-Saharan Africa's
population live within 100km of the coast.
(9.) The costs of international transport for landlocked developing
countries are on average 50% higher than for coastal economies (Radelet
and Sachs, 1998).
(10). North (1958: 537) remarks, "Revolutionary developments
in transport have been an essential feature of the rapid growth of the
western world of the past two centuries. Reduction in the cost of
carriage has enabled specialization and division of labour on a national
and international basis to replace the relatively self-sufficient
economies that predominated in the western world two centuries
Research on South African SMEs reveals, however, a mismatch between
the reality and the model of the SME sector used by South African
policy makers: The South African SME sector is far from homogenous
and would require a fine-tuned set of interventions rather that the
generic assistance currently provided. Only the few, more dynamic
SMEs show a potential to contribute to rapid employment creation,
whilst survivalist activities constitute the vast majority of South
Historical and econometric evidence suggests that European
colonialism caused not only a major change in the organization of
these societies, but also an institutional reversal--European
colonialism led to the development of relatively better
institutions in previously poor areas, while introducing extractive
institutions or maintaining existing bad institutions in previously
Europeans adopted very different colonialization strategies, with
different associated institutions. In one extreme, as in the case
of the United States, Australia and New Zealand, they went and
settled in the colonies and set up institutions that enforced the
rule of law and encouraged investment. In the other extreme, as in
the Congo or Gold Coast, they set up extractive states with the
intention of transferring resources rapidly to the metropole. (p.
Table 1. Output of entrepreneurship/SME publications in Africa
in five-year intervals
Period Number Percentage
1963-68 8 1.53
1969-73 20 3.85
1974-78 26 5.00
1979-83 43 8.26
1984-88 46 8.85
1989-93 141 27.11
1994-98 179 34.42
1999-2001 57 10.96
Total 520 100.00
Table 2. Distribution of research output per country
Country 1963-2001 1960-69 1970-79
Africa (general) 62 3 7
Algeria 1 - -
Angola 1 - -
Botswana 13 - 1
Cameroon 4 - -
Central Africa 1 - -
Egypt 1 - -
Ethiopia 2 - -
Ghana 16 1 6
Ivory Coast 3 - -
Kenya 19 - 2
Liberia 1 - -
Libya 1 - -
Malawi 3 - 1
Mozambique 1 - -
Namibia 1 - -
Nigeria 20 2 4
Sierra Leone 2 - -
South Africa 318 3 25
Sudan 2 - 1
Swaziland 2 - 1
Tanzania 3 - -
Uganda 2 - 1
West Africa 2 - 1
Zaire 5 - -
Zambia 8 - 2
Zimbabwe 26 - -
Total 520 9 52
Country 1980-89 1990-2001 Percentage
Africa (general) 7 45 11.92
Algeria 1 - 0.19
Angola 1 - 0.19
Botswana 2 10 2.50
Cameroon 1 3 0.76
Central Africa - 1 0.19
Egypt - 1 0.19
Ethiopia 1 1 0.38
Ghana 4 5 3.07
Ivory Coast - 3 0.57
Kenya 7 10 3.65
Liberia 1 - 0.19
Libya 1 - 0.19
Malawi - 2 0.57
Mozambique - 1 0.19
Namibia 1 - 0.19
Nigeria 8 6 3.84
Sierra Leone 1 1 0.38
South Africa 49 241 61.15
Sudan - 1 0.83
Swaziland - 1 0.83
Tanzania 1 2 0.57
Uganda - 1 0.83
West Africa - 1 0.83
Zaire 1 4 0.96
Zambia 2 4 1.53
Zimbabwe 5 21 5.0
Total 94 365 100.00
Table 3. Publications per topic, 1963-2001
number of 1960-69 1970-79
Category publications publications publications
1 13 1 -
2 54 1 4
3 22 - 3
4 73 - 4
5 33 - 1
6 30 - 2
7 25 1 5
8 19 1 4
9 11 - -
10 49 1 6
11 74 - -
12 16 - 1
13 8 - 1
14 29 - 7
15 64 2 13
520 7 51
Category publications publications
1 4 8
2 7 42
3 14 51
4 7 16
5 5 27
6 9 19
7 11 8
8 2 12
9 2 9
10 3 39
11 11 63
12 2 13
13 2 5
14 9 13
15 7 42
Figure 1. Output of entrepreneurship/SME publications in Africa in
Intervals in years
Note: table made from bar graph.