(Editor’s note: originally published on the website of the Harvard Business Review, Bright B. Simons takes an in-depth look at entrepreneurs operating in Africa right now and what categories they fall into.)
It’s becoming ever clearer that entrepreneurship is the answer to the vexing economic questions facing Africa today: job creation, capital formation, skills acquisition, taxation-based self-sufficiency, quality of governance-demand, and of course social inclusion. But how has it actually evolved in Africa? Are there peculiar features of African entrepreneurship we may consider relevant to big global debates on development and sustainability?
I spend a significant amount of my time associating with a pro-business think tank that has been building an impressive database of entrepreneurs, small businesses, start-ups, and innovation-driven enterprises in Africa. Sifting through case studies, anecdotes, questionnaire responses, and many other snapshots of entrepreneurial activity in Ghana and a few other places on the continent I was drawn to two major characteristics of African entrepreneurship. I will call them hyper-entrepreneurship and excess diversification.
Until recently, my attitude had been quite negative about both of these. I was looking for reasons why the grand take-off of the African economy has been slower than predicted by the super-optimists (the continent is growing by five percent annually rather than the 10 percent or more seen in recent years in China and India). African-style hyper-entrepreneurship and excess diversification are so different from the standard models of business success that prevail in the West that I figured they must be the problem.