Omidyar Network, the philantropic organisation of eBay founder Pierre Omidyar, have released what has to be the most in-depth study of African entrepreneurship to-date.
Omidyar Network releases must-read report on entrepreneurship in Africa
Omidyar Network, the philantropic organisation of eBay founder Pierre Omidyar, have released what has to be the most in-depth study of African entrepreneurship to-date. Titled Accelerating Entrepreneurship in Africa, the report is the result of an ambitious research project together with the consultancy firm Monitor Group, based largely on interviewing 582 entrepreneurs in six countries: South Africa, Nigeria, Ghana, Ethiopia, Kenya - and Tanzania, CDI's target country.
The report comes at what is a truly transformative moment for the way in which we think about development. In fact, it was released just a week after the 10th World Skoll Forum which brought together nearly 1,000 of the world's leading social entrepreneurs and featured such distinguished guests as Kofi Annan, the former Secretary-General of the United Nations.
The notion that entrepreneurship is crucial to development is itself not new, dating back to an essay by Harvey Leibenstein in 1968. Now however, expertise, resources and creativity are being applied on an unprecedented scale: Omidyar Network has invested 600 million dollars in a wide range of companies fostering economic advancement, the Acumen Fund - a pioneer in this field - has invested 83 million dollars in some of the most innovative indigenous entrepreneurial solutions to global poverty. In honour of this year's World Skoll Forum, the consultancy firm McKinsey has published a volume titled 'The Art and Science of Delivery' with contributors such as Tony Blair, Sir Michael Barber and Salman Khan.
The good news from Omidyar's report is that a spirit of entrepreneurship has been spreading rapidly throughout the countries surveyed. African entrepreneurs now have successful, self-made businessmen like Mo Ibrahim to look up to. At the same time, few of them believe they actually have the skills to manage a new firm, something that secondary and tertiary education are not preparing them to do - confidence levels are as low as 9 per cent in South Africa. More than that, there was a near-universal consensus about a lack of incubators, with 87 per cent in Tanzania arguing that there is an insufficient supply of such programmes. It is not just incubators though, business support services in general do not match the needs of new firms, satisfying a mere 20 per cent of Tanzanian entrepreneurs.
This has wider ramifications because without such support. Funding applications by new businesses largely are not sufficiently promising to attract capital from banks and the limited venture capital sector. The lack of compelling business plans in particular has been a major complaint by financiers. Ultimately, while governments will be needed to adjust legislative hurdles and improve infrastructure, business support through incubators and business-plan competitions can go a long way towards creating what Omidyar's report calls an entrepreneurial 'ecosystem'.
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