Lagos, Nigeria//-The Tony Elumelu Foundation, Africa’s leading philanthropy, in partnership with Stanford University has released a comprehensive research study centred on African entrepreneurs, urging African entrepreneurs to embrace growth opportunities.
The report revealed amongst others, pertinent cultural factors which influence the entrepreneurial journey of women especially.
Women in Africa are overwhelmingly represented in entrepreneurship (most entrepreneurs in Africa are women), yet their businesses are less profitable and experience delayed growth in comparison to their male contemporaries.
Women and men also reported dissimilar business motivations and aims, with especially stark differences in how they discussed their customers and products.
For male entrepreneurs, motivations revolved around “profit”, “growth” or “capital”, while motivation for female entrepreneurs learned towards social impact via specific products, services and industries.
Capital consideration was also a defining aspect for most African entrepreneurs. Using a select pool from the almost 140,000 African entrepreneurs that applied to the Tony Elumelu Foundation Entrepreneurship Programme between 2015 and 2017, access to capital was identified as not only playing a critical role in running a business, but how it was initially conceptualized – from size and scope to design and goals.
African entrepreneurs, aware of their limitations in raising capital, often restrict their ideas. With increased access to and more opportunities for seed funding, African SMEs will dream bigger, and launch businesses with larger footprint.
The research further investigated the mindset of entrepreneurs, presenting a unique understanding of the challenges facing African start-ups and the areas for growth across multiple sectors. It provides an opportunity to rethink how entrepreneurship is approached and supported, identifying two categories of entrepreneurs.
The first set of entrepreneurs – described as the exchange mindset – are grounded in their purpose of providing products and services, nurturing relationship with employees and customers, and providing value to others, while the second set – labelled the organization mindset – are more concerned about their ability to create, grow and expand their company.
The exchange mindset is characterised by a micro-level, ‘on-the-ground’ view, while the “organization mindset” entrepreneurs focused on ‘being an entrepreneur’, characterized by a more macro-level view of themselves and their activities.
Rather than just orienting themselves around the exchange of products and/or services with customers, organization mindset entrepreneurs oriented themselves around their purpose of creating and growing a company.
The study found that individuals with this mindset often discussed growth and performance, managing people and assets, and industry dynamics. Their attention is directed toward the characteristics of their business and its performance and expansion.
The exchange mindset entrepreneurs show maximum concern about the quality of product and services. In close contrast, the organization mindset entrepreneurs are likely to express internal motivation such as feelings of ownership and control, leading to an individualistic focus.
Both mindsets have varying management style as well, with the former viewing and describing their employers as equals whose opinions are valued, and the latter as resources to be managed.
Although differences in entrepreneurial mindsets might exist, African entrepreneurs are fundamentally characterized by their zeal to make significant impact one way or other.
These differences were most visible geographically across North, West, East and Central Africa. In West Africa, entrepreneurs – particularly Nigerians – had motivations embedded in profit-oriented language while Central Africa and Eastern African entrepreneurs seemed to be more oriented towards social justice, and community development. North African entrepreneurs were more disposed towards cyclical, project-based work.
In Eastern and Western Africa, there was a greater emphasis on farming and agriculture. Central African entrepreneurs had a lot of overlap in how they discussed why they became entrepreneurs with Eastern Africans.
The research concluded with the need for more African entrepreneurs to adopt the organizational mindset which is linked to higher business success.
Most entrepreneurs with the “exchange mindset” were women, highlighting the less formal level with which women view entrepreneurial enterprises. Women entrepreneurs must be empowered to think differently.
African entrepreneurs must embrace the language of creation alongside a clear vision for growth, which is achievable through guided and targeted mentorship.
Indeed, true to driving impact, the Tony Elumelu Foundation recently opened its online portal toreceive applications from extraordinary individuals across the continent with a minimum of five years of business or professional experience to apply for a chance to mentor young African entrepreneurs.
No doubt mentorship can be valuable across all business stages and levels of experience, these mentors will be assigned to entrepreneurs from the programme to provide quality guidance that plays into their business interests.
Mentors are required to participate in two hours sessions every month, over a 12-month period and are rewarded with certificates of achievements and value-add opportunities.
With a labour force of over 400 million which will surge by at least 70 percent before 2035, Africa is at a critical crossroad on what to do with such viable manpower.
To convert this young African workforce to creators of prosperity, the Tony Elumelu Foundation (TEF), Africa’s leading philanthropy empowering young African entrepreneurs, is a strong advocate for young men and women’s participation in entrepreneurship.
Through its flagship Entrepreneurship Programmelaunched in 2015, over 9,000 SMEs have been trained, funded, and mentored, by the Foundation, energising the private sector in the process, and creating hundreds of thousands of jobs directly and indirectly.
African Eye Report