UNLOCKING PRODUCTIVE ENTREPRENEURSHIP IN AFRICA’S LEAST DEVELOPED COUNTRIES

Zuzana Brixiová Schwidrowski

No wp990, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: In Africa’s least developed countries (LDCs), escape from poverty and convergence to living standards of more advanced economies depends critically on structural transformation and the emergence of productive entrepreneurship that would accelerate growth and job creation. So far, however, subsistence agriculture has been the main source of employment in these countries, while a dynamic private sector in industry or high value-added services has remained elusive. Utilizing the flow approach to labor markets, this paper complements the empirical literature and numerous surveys on small and medium enterprise (SME) constraints and develops a theoretical framework that examines the main obstacles to entrepreneurship in Africa’s LDCs. The paper posits that given the persistent frictions in product and labor markets as well as skill shortages that characterize these economies, development of productive entrepreneurship cannot be left to markets alone. The policy analysis suggests that the state has an important role to play. Well-targeted government interventions including training of potential entrepreneurs and workers can help establish more modern and highly productive SME clusters that Africa’s LDCs need.

Keywords: Entrepreneurship; institutions and policies; Africa; LDCs; search model (search for similar items in EconPapers)
JEL-codes: J64 J68 L26 O1 (search for similar items in EconPapers)
Pages: pages
Date: 2010-06-01
New Economics Papers: this item is included in nep-afr, nep-dge and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Unlocking Productive Entrepreneurship in Africa’s Least Developed Countries (2010)
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