Entrepreneurship in Ghana
The fallouts of globalization – ease in communication, international media proliferation, ease in travel, and the internet – have reshaped values, perceptions, and attitudes. The stories behind strong brands such as Enterprise Group, Tropical Cable, Ghana Home Loans, Joy FM and Multimedia along with other budding brands like Nallem, Koko King, and Kingdom Books and Stationary etc., have energized the productive population to take up opportunities by embracing risk and innovation.
According to Kuratko (renowned entrepreneur scholar), entrepreneurs are aggressive catalysts for change within the marketplace and results in innovation, output and jobs. Of course, the potential merits in driving entrepreneurship are obvious.
Government-led entrepreneurial growth
As a nation, we are confronted with a multiplicity of issues in our developmental process at the individual, societal and national levels. On the economic front, there are several micro and macro government policies aimed at transforming our economy to become not only more productive but also more resilient in the global economic order.
Related to this economic transformational agenda has been the push by successive governments for more entrepreneurial support programs. The Mahama government instituted the Ghana Center for Entrepreneurship, Employment and Innovation- a business advisory support center that helps startups and young Entrepreneurs in business development, consulting, business financing and other support services.
The current Akufo-Addo government is looking at the National Entrepreneurship Innovation Plan, which will accelerate and improve the quality of entrepreneurship and promote innovation in businesses. Tertiary institutions are offering entrepreneurship programs in the belief that entrepreneurship can be taught, learnt, and applied to help create jobs and transform societies.
My question, however, is: How obvious have the dividends of these government-led interventions been? In terms of input-output analysis of these interventions, what has been the net economic benefit to the individuals involved and the nation at large?
The anecdote has been that very few of the beneficiaries of these programs are able to proceed with their businesses through the stages of the venture life cycle from new venture development stage through growth to stabilization. A very small percentage of these entrepreneurial businesses are able to employ significant numbers and grow to become big players nationally. Situated in the context of deregulation, liberalization, globalization of markets, and continuous heightened global competition, these entrepreneurial businesses have never stood a chance.
As a nation, we cannot remain competitive even in our West African sub-region if businesses fail to nurture growth to enjoy the related benefits of economies of scale and global competitiveness. Alongside these developments have been the scandals of corruption, misappropriation of funds, and politicization of government agencies tasked to roll out such programs.
Corporate-led entrepreneurial growth
In the wake of these minimal benefits from government-led initiatives, I am proposing the push for more corporate-led economic growth initiatives. This requires the application of Intrapreneurial principles. Entrepreneurs traditionally undertake their innovative activities and business risk-taking outside the known corporate establishment.
The Intrapreneur (or corporate entrepreneur) takes hands-on responsibility for creating innovation and risk of any kind within organizations. Either as creator or not, the Intrapreneur figures how to turn an idea into a profitable reality. The Intrapreneur is, therefore, parallel to the entrepreneur, but the difference being that he/she (intrapreneur) works within a corporate establishment. Intrapreneurship is seen as the infusion of entrepreneurial thinking into large bureaucratic structure. Big corporate firms, faced with turbulent environments and rapid technological changes can make do with a lot more entrepreneurially spirited employees.
Job growth within an economy has three traditional pathways – government, small companies (entrepreneurial businesses), and those bigger companies that managed to split themselves into smaller and smaller profit centers by becoming more and more entrepreneurial. I strongly make a case for Intrapreneurship. The Ghanaian economy does not only need entrepreneurs to start new businesses but also put life into existing large companies.
A symbiotic relationship between the intrapreneur and the large business becomes key. The relatively big business players like Enterprise group, Kasapreko, Goil, Dalex Finance, Mechanical Lloyds and others provide crucial resource for the Intrapreneur to pilot his ideas within the limited oversight control of the organization.
Likewise, these same big players can tap into the innovativeness, initiative and drive of the intrapreneur. The intrapreneur wants self-actualization by being in charge (at least to some degree) whiles the big firms need to birth new businesses that normally do not fit into their bureaucratic and lethargic mold.
Different nations and regions of the world have developed their economies under different global geopolitical and economic conditions. As a nation, Asia provides some parallels in our quest for economic transformation. In the 1980s and 1990s, the economic transformations of the Asian tigers (Hong Kong, Singapore, South Korea and Taiwan) were significantly triggered by corporate intrapreneurship that brought innovation and diversity to Asian firms.
According to Kuratko, their roots were in the European colonial companies’ mode of operations where colonial companies expanded primarily through the creation of new divisions that were set up by a manager with great freedom to exercise discretion, take initiative, and promote innovation. Through this strategy, conglomerates and monopolies were established. From trading and retail, then local assembly, they eventually became exporters, i.e. Harpers, Inchcape, Hagemeyer and the Borneo Companies, for example.
In China, businesses start from humble beginnings in industrial activities and later vertically integrated into downstream activities, real estate and property, and even banking and financial services e.g. the Salim Group (cement, automobiles, flour, food, chemicals, banking, property and insurance). In Indonesia, the Kuok (plantations, flour, shipping, hotels, mining, computer services, retail and film distribution) and Hong Leong (banking, insurance, automobile franchises, construction, hardware and manufacturing) groups in Malaysia, and the Charoen Pokphand (animal feed, poultry, chemicals, automobiles, telecommunications, textiles, property and retail) group in Thailand, for example.
It must, however, be mentioned that there were challenges due to the conservative patriarchal culture that sometimes limited the scope of innovation or diversification. Hence, some firms grew bigger than others depending on the degree of openness and intrapreneurship. Therefore, as stated by Kuratko’s research, intrapreneurship within Asian firms are paradoxical… Intrapreneurship made many companies what they are today, yet at the same time, opportunities are very limited because of the low level of trust perceived in employees without family connections and long periods of service within the firm. Yet, there are a lot of positives to draw from the Asian experience.
Global business experiences
It is even most striking to note that contemporary businesses that have stayed globally competitive have mostly grown via the intrapreneurship route. Few examples are Mac, iPod, iTunes, iPhone, iCoud computer inside of Apple. Then there is Gmail, Google News, Google Maps, AdWords, AdSense, Driverless Cars, Google Glasses and other innovations inside of Google. Another is Java Programming language inside of Sun Microsystems
An entrepreneurial business climate may have some positive implications in terms of many small-sized businesses with the merits of limited output and employment opportunities, personal satisfaction, independence, and freedom of small organizations, but lose out on global competitiveness. The late Kofi Annan stated that arguing against globalization is like arguing against the laws of gravity.
For our economy to be globally competitive, our businesses (especially indigenous ones) must grow bigger in scope and depth. Small-scattered independent entrepreneurial businesses cannot be a viable path for sustained employment and economic growth. Small independent businesses in our liberalized economy and globalized markets cannot survive competition from global firms who have tapped into intrapreneurship and acquisitions to grow and enter our markets. They have continually outmuscled our small entrepreneurial players with government’s hands tied due to global and regional trade agreements.
The challenge for corporate top-level executives has been how to motivate high-flyer employees (intrapreneurs) comprehensibly enough to prevent them from becoming entrepreneurs or be poached by a competitor firm. Surprisingly, interaction with former corporate high flyers turned entrepreneurs or working for different firms leave primarily not because of pay and benefits but rather a frustration in their attempts to innovate. I intend to address this issue in my subsequent article.
Kwesi Benyi, Business and Organizational Development Consultant