This article is written to commemorate World Entrepreneurs’ Day (WED) which falls on August 21 every year, to create awareness for entrepreneurship, innovation and leadership throughout the world.
The words ‘entrepreneurship’ and ‘entrepreneur’ are very much in vogue.
Although only recent additions to Ghanaian vocabulary, they are now bandied about, from Accra to Bawku, from student dormitories to plush C-suites in the business district; and pretty much everywhere else in between.
But in our local context, the word ‘entrepreneur’ is often used wrongly to describe individuals who are in fact “businessmen”.
My view is that while all commercial (as opposed to social) entrepreneurs are businessmen in so far as they run a business, not all businessmen are entrepreneurs.
A businessman establishes and manages a business principally for furthering personal goals or to capitalise on an immediate, possibly short-term opportunity to profit.
The business is typically the primary source of income to meet immediate needs, and is perceived as an extension of his personality, intricately bound with family needs and desires.
A real entrepreneur by contrast typically pursues the vision of their enterprise to remove an existing customer pain, taking a long-term view of building and sustaining an organisation through which to pursue the vision.
A customer pain may exist because a customer has a need nobody has been able to meet.
Or, although there may be one or more meetings, or purporting to meet, a particular need of the customer, the customer may still have a pain because the offerings of those enterprises in fact fall short, in one way or the other, of completely removing that pain.
Entrepreneurs (and indeed businessmen) don’t succeed or fail alone. They are helped or hindered, according to the Global Entrepreneurship Institute, by a mix of attitudes, resources and infrastructure known as the entrepreneurship ‘ecosystem’.
This includes institutions providing support, training and coaching for entrepreneurs or those seeking economic returns. The former include World Bank, Invest in Africa (for which I am an Ambassador), incubators, entrepreneurship hubs, churches, schools and universities, many of which now offer entrepreneurship.
The latter group include venture capital and private equity firms, banks, research institutions, corporates and individuals who invest privately or through the stock market.
The government is also a key ecosystem player. Since the early 2000s, Ghanaian governments have shown an interest in developing the health of the private sector and entrepreneurship.
These include Kufuor’s Venture Capital Trust Fund (which established a government equity fund and failed in its attempt to provide tax incentives to venture capital financing companies); Mahama’s Young Entrepreneurship Support (YES) scheme now renamed National Entrepreneurship and Innovations Plan (NEIP) which provides financial and other support to entrepreneurs.
It will appear that the majority of government interventions focus on nurturing and supporting micro-entrepreneurs, businessmen, and necessity entrepreneurs (those who go into business because they have no other economically viable options) who at best, create only a handful of jobs and many only create jobs for themselves, with limited impact.
These I refer to as “Small Fish” entrepreneurs.
Along with those efforts must be an aggressive policy to find, develop and nurture wannabepreneurs seeking to truly remove, or are removing the bigger types of customer pain by solving society’s biggest problems in a way that is scalable. (‘Big Fish’ entrepreneurs).
It is understandable why the government doesn’t take this approach. Big Fish problem-solving enterprises require significant investment which the government cannot provide; and support for the entrepreneurial masses, is more likely to win votes.
The government must continue with its efforts to remove bottlenecks.
At the very least, a more transparent system must be provided for acquiring and disposing of land and it must enforce the Rent Act of 1963 which forbids landlords from demanding more than six months’ rent in advance.
The Companies Act of 1963, a relic of colonialism and unsuited to the demands of modern business must be repealed and consigned to a museum.
The Ghana Investment Promotion Centre (GIPC) Act of 2013 also requires urgent amendment.
Its minimum capital requirements target Big Fish foreign entrepreneurs and investors, setting up in Ghana or partnering with locals.
Ironically, anecdotal evidence suggests Ghana attracts more Small Fish investors than Big Fish ones.
The typical foreign investor comes to Ghana initially because of personal, family or ancestral connections or as a tourist and typically invests between US$10,000 and US$300,000.
In many cases though, the enterprises grow beyond the initial capitalisation.
Just as I suggest that the government should support and nurture both Small Fish and Big Fish entrepreneurs (admittedly with a bigger focus on Big Fish ones), it should also encourage both foreign Small Fish and Big Fish entrepreneurs to Ghana.
Many of them in turn will enter into joint ventures and partnerships with Small Fish and Big Fish local entrepreneurs.
Beyond the government, we all have our part to play. Entrepreneurs must be more open to the participation of others privately or through the stock market, thereby spreading risk and reward, and providing patient capital to support long-term growth.