Entrepreneurship and National Economic Development

Have you ever gone back in retrospect and looked at how far you have traveled in life? Just think back to the time you were a child and recall what it was like. Think about where you were then. Were you in an urban or rural environment? What did you hope you would achieve in life? What kind of future did you really hope for, if at all? Hopefully if you look at where you are now you can see just how far you have traveled or how different your present reality is from your imagined future.

In the late 1960s and 1970s there was an outflax from the cities: people left for the countryside with hopes of becoming entrepreneurs. Interestingly in 1973 Ethiopia earned more from exports than paid for its imports for the first time in modern history. It looked as if the country had turned its direction and was on the path to prosperity through a new far sighted embryonic entrepreneurial economy. Imagine where Ethiopia would have been today had that trend continued - over the last half century or so.

 

Just for comparison, look at the Economic Development of South Korea considered by many to be a prototype for a development success story. When it first began developing, South Korea’s industrial policy focused on import substitution and then moved to promoting exports and followed by developing more industries and manufacturing centers. In the 1980s, twenty years after it began developing, it liberalized its economy and has now become a highly developed country exporting all sorts of products around the globe.

Let us now compare the story of South Korea with Ethiopia and take an honest look at what Ethiopia has achieved economically over the last several decades.

In the late 1980’s as a staff I proposed to the Ethiopian Chamber of Commerce Board the need to launch Industrial Entrepreneurship Seminar. However, it was not accepted as the then government was not ready to see a vibrant private sector. Following the change of regime in 1991 and my return after completion of studies in the UK, I was asked to propose action plans that would help the revival of the private sector in Ethiopia. The aim was for Ethiopia to achieve economically, in a few decades more than it had in recent history. The hope was that rapid economic growth and industrial development would dramatically reduce unemployment and underemployment and give the younger generation a reason for hope. So I prepared a proposal to launch one national entrepreneurship development conference at the ECA and launched three entrepreneurship development trainings at Adama, Hawassa and Bahirdar in 1994/95. The training was helpful as 122 entrepreneurs were then selected and trained out of 2500 candidates nationally under UNDP sponsorship.

In the late 1960s and 1970s there was an outflax from the cities: people left for the countryside with hopes of becoming entrepreneurs. Interestingly in 1973 Ethiopia earned more from exports than paid for its imports for the first time in modern history.

Though Entrepreneurship was then unusual, through organizing a scarcely available training at that time, it has over the years evolved to become the government’s prime means of fighting poverty and youth unemployment at national level. To date, it is common to see potential signs that Small and Medium Enterprises (SMEs) would flourish in Ethiopia. They are widely accepted as avenues for economic development and their importance, contribution and strategic role, has gained a solid footing.

In many countries such as South Korea, these enterprises have become centers for innovations and they are operated by Entrepreneurs who take calculated risks. Entrepreneurs are not scared of failure as they face challenges and are always ready to grab opportunities Entrepreneurial culture is critical and that means change, and change means quite a gear shift in lifestyle.

Since the first ever practical and pilot Entrepreneurship Development training Programs (EDPs) was launched in Ethiopia in 1994/95, attempts have been made to awaken and motivate potential Ethiopian Entrepreneurs towards achievement over the long haul. One caution however is crucial: any attempt to seriously launch a national entrepreneurial movement requires all round considerations.

One important approach for the attainment of such innovative, egalitarian and farsighted development of indigenous potential entrepreneurs is to enable them utilize their imagination and creativity and invest in setting up modern SMEs. That requires availing and providing them with the necessary drive, inputs and support. The fundamental secret lies in exactly identifying and selecting the potential Entrepreneurs on merit based techniques, nothing else. Selection of resourceful potential Entrepreneurs that can sprint the country to greater achievements have to be skilfully carried out.

Considering starting one’s own business as an entrepreneur using whatever experiences and skills you have acquired as an employee or student is a serious decision that needs an in-depth thought. Beginning from the type of business one wants to launch to flying on one’s own with probably no guarantees is indeed exciting and also a risky affair. Making the right decision is critical and that requires to be armed with ample qualities and training in visionary entrepreneurship. Visionary entrepreneurs know their goals clearly and are achievement oriented.

The fundamental secret lies in exactly identifying and selecting the potential Entrepreneurs on merit based techniques, nothing else. Selection of resourceful potential Entrepreneurs that can sprint the country to greater achievements have to be skilfully carried out.

Promotion of Entrepreneurship depends on the business environment that exists in a country along with different existing motivations that the entire society offers, particularly to the entrepreneur.

Entrepreneurs that have the fundamental qualities and skills, capacity and determination to take the risks involved and the optimism to succeed need to be seriously and accurately scrutinized and encouraged. These are the seeds of Ethiopian Entrepreneurs that need to be brought together, supported and encouraged in batches or as individuals to create the required avidity, mass and drive with the requisite backup and support to arouse the will and vigor in them to succeed. This should not be a onetime affair but a continuous mission that will not stop. Only then can we ensure effective transfer of technology. It is this way that an essential footing that guarantees and lays the foundation for the achievement of anticipated future large scale entrepreneurial development of Ethiopia can be achieved.

So the most urgent priority in Ethiopia today starts with the task to inject the confidence to invest. We must enlighten indigenous potential business minded people about successful Entrepreneurship. When this occurs there will be consistent new businesses that will be successful, innovative and create jobs. People in business will then be encouraged to think about how they can make their products even better or how they can launch and develop new startups. And for that, initially effective donor support at the launch of pilot phase could be thought by setting effective output assured approach. Ascertaining the success of each Entrepreneur will of course be decisive and have to follow as part and parcel of the program inputs.

Our future depends on developing an environment where especially innovative entrepreneurs can flourish and grow. In forthcoming articles I will write more about entrepreneurship, its role for personal prosperity and national development including its contribution in various countries.

Andualem Tegegne

EBR Regular Contributer. Andualem Tegegne holds a BA degree in Economics from AAU and an MSc in International Trade and Finance specialising in International Business from Lancaster University in the UK. He worked at the Ethiopian Chamber of Commerce in various positions and finally left the Chamber in 2007 as Secretary General. He also worked at different organizations including the UN regional office in Nairobi. He pioneered and introduced entrepreneurship in Ethiopia. Comments can be sent to andualem.t@ethiopianbusinessreview.com or andu.teg@gmail.com

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