JAVAN MULENGA CHITEMBOAUD16377BEC24087

COURSE NAME:ENTREPRENEURSHIP DEVELOPMENT

COURSE PROFILE: ENTREPRENEURSHIP – INNOVATION AND FINANCING

ATLANTIC INTERNATIONAL UNIVERSITY-AIUHONOLULU-HAWAII, USA

MARCH 2014

Page 1 of 30

Email to: tyne.wood@gmail.com , Cell: +260977410177, www.aiu.edu

TABLE OF CONTENTS

I. Abstract.........................................................................................................................................................3

II. Background ...................................................................................................................................................3

III. Entrepreneur, enterprise and entrepreneurship.............................................................................................4

IV. Innovation, Invention and creativity..............................................................................................................7

V. Examples of global of serial entrepreneurs....................................................................................................9

VI. The importance of entrepreneurship development .....................................................................................11

Page 2 of 30

VII. Challenges to entrepreneurship...................................................................................................................12

VIII. General discussion.......................................................................................................................................16

IX. Conclusions..................................................................................................................................................19

X. Recommendations.......................................................................................................................................19

XI. References ..................................................................................................................................................20

Abstract

Our education and training in all learning institutions should be

designed in such a way that it forestalls in us the abilities and

capacities to ignite creative thinking. The difference between inventors

and entrepreneurs means that there is, in the world of commerce, a

Page 3 of 30

dignified place where cooperation and partnerships can be forged for the

purpose of accomplishing our dreams. Truly, innovation is an interface to

this feat and proves to all of us that indeed entrepreneurship is

absolutely indelible to economic growth. Notwithstanding the many factors

that act as barriers to entrepreneurship, our campaign should be one that

raises awareness to the benefits of a well-developed sector. In this

regard, ours is to modify the financial sector to be oriented towards the

oiling the engines of economic development and accelerating the unlocking

of potentials that lies in entrepreneurs.

Key words: entrepreneurship, innovation and finance

Background

The word entrepreneur has a military background tracing its origin in the

1700s from the French word called an ‘entreprendeur’, literary translated

as an executioner. Until 1886, the word “entreprendeur” was very common

within the French army and was only referred to Generals in the army

ranks as the executioners of military strategies in conquest for the

empire. “Entreprendeurs” were army generals of valor who would rather die

on the battlefield than surrendering to the enemy of the empire.

This single most trait is what shall stand out in my presentation of

knowledge on the subject of entrepreneurship. TEVETA (2009) sustained

this view that entrepreneurship came from the word “entreprendeur” which

was referred to a high ranked military officer in the army meaning

“undertaker”. These were generals responsible for undertaking military

strategies in wars.

Page 4 of 30

In 1923, the word entrepreneur was adopted into the world of commerce. In

this case, business people, men and women, would identify opportunities

in the market, count the costs and take on the risky are today revered

and called entrepreneurs.

Serial entrepreneurs are those that have built business empires through a

constant manipulation of the factors of production, for socio-economic

development of their respective communities

Entrepreneur, enterprise and entrepreneurship

Is every person an entrepreneur? What makes entrepreneurs stand out from

the rest? In our quest to understand the drivers and sustainable factors

of entrepreneurship, development and management, it is important that I

respond to the above questions as they provide a starting point for

further debate in this knowledge quest.

Sinyangwe (2010) debated that not all entrepreneurs are alike; either in

the traits or personal qualities often they differ markedly from each

other. Some are aloof and arrogant while some are withdrawn and shy.

Peter Drucker, a business management guru, argued that entrepreneurs are

people who actually search for change, responds to it, and exploits

changes as an opportunity. Schumpeter, J (1883-1950) viewed

entrepreneurship as a force of “creative destruction”. The entrepreneur

carries out new combinations therefore helping render old industries

absolute. In this respect, the creation of new and improved ways of doing

business leads to the destruction of old established ways of conducting

business.

Page 5 of 30

Sinyangwe (2010) further argued that entrepreneurs should be measured on

their economic impact of output, employment, income, investment export,

and other economic indicators. In reality, it is the ability of the

entrepreneurs to identify the factors that dictate the conditions and

circumstances under which a business should thrive and take appropriate

causes of action that ultimately lead to the success of the business. In

short, it is a matter of skill and aptitude.

The fact that only about 2 to 5 per cent of entrepreneurs succeeds,

augment the notion that not every person is an entrepreneur. Because risk

and uncertainty characterizes entrepreneurship, most people are risk

averse, this trait embody the truth that only few people have the

willingness and magnanimity to face the tenacity of the risk and

uncertain future. To this end, with supreme confidence I hold that not

every person is an entrepreneur.

There are three types of uncertainties these are;

Risk: this can be measured statistically

Ambiguity: this is hard to measure statistically

True uncertainty: It is impossible to estimate or predict

statistically

With this knowledge it is humbling to note that the act of

entrepreneurship is difficult to predict statistically because it

involves a high measure of risk and true uncertainty (Ekankumo and

Kemebaradikumo, 2011).

Page 6 of 30

Many pundits in the field of entrepreneurship have presented a great body

of knowledge especially on the characteristics of entrepreneurs. Men and

women who are captains of industries in an economy, what character do

they inhibit and why am I discussing entrepreneurs’ character? Character

is a crucial part of the entrepreneur’s Holy Grail for success.

To address the question, I have adopted the characteristics outlined by

Psychologist McClelland as follows;

1. Entrepreneurs have a desire for responsibility

2. Entrepreneurs are risk takers that they strive to eliminate risk for

profit gains.

3. They are full of confidence in their ability to succeed

4. They are very pragmatic and that they seek immediate feedback

5. They appear to have high levels of energy as they execute errands

6. They are more focused and futuristic in view of their actions

7. They have skill set appropriate for organization

8. They value more their achievements than money

9. They demonstrate high degree of commitment and willingness to accept

risk, work hard and take actions

10. They are flexible.

While these are not universal standards for measuring successful

entrepreneurs they somewhat offers the most salient traits that

differentiate entrepreneurs from others. It is with these traits that

Page 7 of 30

enable entrepreneurs to brave the storm of guiding an enterprise through

the stages of development, especially in an economy where the cost of

doing business is alarmingly high.

On the contrary, this world has witnessed individuals who have bravely

risen to the supreme echelons of entrepreneurship, whose success has

hugely impacted positively on the society. The need to evaluate their

character is of extreme importance in our endeavor to understand what

drives them through hardships. And such knowledge will most profoundly

signal policy-makers to develop alternative means in which sustainable

efforts can be given to them as a way of steering the private sector to

socio-economic prosperity.

From the entrepreneurship concept, it is learnt that many people want to

set up businesses, but they lack the much required character in them to

keep them through. In this respect, an entrepreneur must obtain most of

the characteristics outlined above to be able to face the risks and

uncertainties of the 21st century business environment.

Thus, the government deliberate policies should be schemed towards

inculcating these traits in people if we are to grow the number of

entrepreneurs in the economy, accelerate massive job creations,

innovation and economic prosperity.

Shahid, M. (2008) contended that entrepreneurship is an ancient concept

that is both simple and complex at the same time. We therefore see in his

argument that entrepreneurship phenomena has actually evolved in tandem

with the passing of time.

Page 8 of 30

An army of academicians of renowned proportions have done tremendous work

on this entrepreneurship subject. Analyzing the magnitude of impact from

empirical data that entrepreneurship can cause on both social development

and economic growth, we would most definitely be persuaded to jump to

conclusions and join the band wagon, at this earliest stage, that

entrepreneurship is a sure bet for unlocking employment conundrum.

Furthermore, most research has been directed to the discussion of the

factors that describe entrepreneurship development, challenges and what

it might be expected to achieve and less research has been done on

understanding the deepest fundamentals that drives and sustain

entrepreneurship at any level of socio-economic development.

To this end, it is robustly vital to keep the entrepreneurship discourse

within the spectrum of fundamental drivers and sustainable factors,

integrating innovation and financing as they play key roles in supporting

growth in the economy.

Consequently, it is significant to view entrepreneurship as “the ability

by one individual or a collection of them to mobilize resource inputs

with the resilience to take on the risks in order to achieve economic and

social benefits”. A creative and innovative response to the environment

which takes place in all sectors of the economy is known as

entrepreneurship (TEVETA, 2009).

This has posed a great deal of controversy in finding a suitable

universally agreed definition except that most, if not all, definitions

have led to the same knowledge. We can further push his argument to

highlight that indeed entrepreneurship is a concept of the dynamic

Page 9 of 30

process of vision, change and creation. It is in this obscured meaning

that the concept entails the application of energies and lots of passions

towards the creation and implementation of ideas and creative solutions.

Zambia with a total population of 13, 400, 000 peoples have

disappointingly 32% of working population. Despite a higher number of

businesses registered every year, 70% of these do not see the day of

their official opening day. Twenty-two per cent do not last a year in the

market and faces de-registration by Patent and Companies Registration

Authority (PACRA).

From the above, it is true that many of the people attempts to venture

into entrepreneurship, as a way of empowering themselves with sources of

income. However, lack of finances and access to markets pose huge

challenges coupled with lack of meaningful skills to support their

businesses.

To sum up, entrepreneurship is an integral fourth factor in economic

growth. An entrepreneur performs the art of developing a new and improved

enterprise in the face of risk and certainty, which is called

entrepreneurship. The presence of large number of entrepreneurs in an

economy is a manifestation of a stable, resilient and vibrant private

sector development, which, if well marshaled, can be a strong basis for

massive and sustainable job creation, innovation and economic growth.

Innovation, invention and creativity

So far, we have learnt that entrepreneurship is crucial to the

development and growth of the economy, but one of the most fundamental

factors that drive entrepreneurship is the ability to innovate. In this

Page 10 of 30

regard, the scope of entrepreneurship concept is not complete without an

honest dialogue on innovation in the light of entrepreneurship

development therefore, it plays a critical role.

UNECE (2012) held that in recent decades, innovation has become the focus

of economic research as a key long-term factor of economic development.

Shahid (2008) contended that behind all innovative businesses, there

entrepreneurs, individuals who poses the foresight, belief and boldness

to build something new. It is a fact of human existence that some

individuals are more capable than others, that some individuals are

harder workers than others, and that some individuals are better at

creating wealth than others.

According to OECD (2011) postulated that innovation is the implementation

of a new or significantly improved product, process, a new marketing

method, or a new organizational method in business practices, work place

organization or external relationships of a company.

Gerry, Scholes and Whitting (2008) argued that innovation and

entrepreneurship are fundamental drivers in today’s economy. Thomas and

Rhisiart (2000) postulated that innovation is a successful exploitation

of a new idea. But according to Beregheh et al (2009) they argued that

innovation is a multi-stage process whereby organizations transforms

ideas into new or improved products, services or processes in order to

advance, compete and differentiate themselves successfully in their

respective market place.

From the above, we clearly see that innovation is about creating a new

product, process or an improvement to the already existing product,

Page 11 of 30

process that is fit for commercial or social end. Innovation gives

comparative advantage to the one who accomplishes the creation of these

products or results. However, behind the veil of innovation, is invention

and creativity.

To take this dialogue further, I consider invention to be the extreme and

riskiest form of innovation. However, in the process of invention, it is

creativity which ignites inventiveness; therefore creativity is a driving

force of innovation while invention is a anchoring element in the

entrepreneurial environment.

Moreover, Kuznet (1962) as presented in Miriam (2012) gave a forceful

presentation on invention as having four dimensions, that is, technical

and economic magnitudes and a past and a future aspect of invention. He

postulated that technical past relates to the magnitude of a technical

problem resolved by the invention. The technical future can be measured

according to the size of the invention, which is dependent on the size of

invention that follows. The economic past of an invention involves the

cost and is measured according to the resources used. Lastly, the

economic future of an invention involves the production of new goods or

services and can enable cost reductions.

Kuznet’s work on this invention dichotomy provides a profound basis upon

which innovation can thrives. It is a solid foundation for the

development of entrepreneurship by creating technical and economic

integrations in various sectors of the economy. Consequently, for

invention to thrive, timeframes, atmosphere appropriate and finance and

technological resources must all be harnessed and channeled towards the

promotion of invention.

Page 12 of 30

So far, discussing inventors is by no way attempting to digress from the

matter at hand. Inventors may not be entrepreneurs or vice versa, mostly

inventors develop new goods or services but may not take them to the

market.

Entrepreneurs normally take the risk of mobilizing scarce resources with

intentions of bringing goods and services to the market for a profit.

Therefore, an entrepreneur adds that extra mile, an economic value to

invention. In this discourse, innovation is simply an interface between

an inventor and an entrepreneur. I am confident that creativity, as a

tipping point, is a force behind true entrepreneurship.

Gerry, Scholes and Whitting (2008) argued that innovation can either be

ignited by technological push or market forces. In the former is where

experts through R&D would develop a very good product according to their

judgment and offer it to the market. In the latter case, the market

dictates what their preferences and tastes are and the enterprise respond

by developing such products which satisfies market demands and desires.

To achieve this, requires a higher rate of diffusion of technology by

entrepreneurs within the economy. A desirable rate of technological

diffusion by entrepreneurs gives them leverages to seize many

opportunities that emerge in the business environment. This is crucial

for effective contribution to economic development.

Examples of global serial entrepreneurs

Innovation and entrepreneurship are fundamental drivers in today’s

economy. For many entrepreneurs is about independence, working for one

self. This pride in independence is reinforced by common stereotype of

Page 13 of 30

entrepreneurs as heroic. Relationships with large companies are crucial

in this whole concept. Relationship with large companies is very

important right from the begging and continues to be so even afterward.

Some of the global renowned 21st century entrepreneurs are as follows;

Steve Jobs – Apple brand

Steve Jobs worked for William Packard for a summer job at the age of

12and later he was a 40th employee at video games company Atavi. He is

revered as a technological innovator whose creativity in computers,

electronics and film led to the invention of Apple computers and built

Pixar into one of the world’s leading Animation Company. Today apple

brands are every where

Muhammad Yunus – Grameen Bank

This Nobel Prize winner is one of the greatest entrepreneurs whose work

impacted positively on the lives of many people in Bangladeshi. He is a

social entrepreneur and innovator, a pioneer of microcredit small loans

to entrepreneurs too poor to be considered by ordinary banks. Muhammad

Yunus began giving small loans to poor people in rural areas and helping

them to find market for their craft. This gave birth to one of the

largest bank in Bangladesh- the Grameen Bank.

Hewllet and Packat – HP brands

Hewlett came directly out of Stanford University‘s laboratories and

Packard worked at GE and Linton industries. These are two brains behind

Hewlett –Packard Company supplying HP brands worldwide.

Bill Gates – Microsoft Computers

Page 14 of 30

A college drop out, philanthropy, an inventor and entrepreneur who

invented micro soft Bill Gates is today one of the richest people on

earth whose annual income surpasses the size of most third world

economies. Bill Gates Foundation is one of the leading charitable

organizations helping many people around the world.

Niklas Zennstrom and Janus Friis – Skype

Niklas hold a MBA while Janus is a high school drop out. Their combined

effort has created one of the most prolific internet software, who does

not use Skype?

Zuckermann – Google

The influence that Google has on human kind is so immense such that its

inventors may not have intended to achieve. Yet this is a company that

was founded by two young undergraduate partners. Google has indeed

changed the way we conduct research and increased our level of knowledge.

From the above, one can deduce that being an entrepreneur entails

choosing a right partner with skill you do not have yet fits in very well

to accomplish the entrepreneurship vision. These are some of the global

renowned entrepreneurs who have changed the world for the better. While

larger firms have influence on their success, it is actually the

entrepreneurs themselves who ventures into the impossible to change the

world.

The importance of entrepreneurship development

Countries around the world regardless of the size of their economic

systems and social structures have recognized the huge significance of

Page 15 of 30

developing the entrepreneurial sector. Shahid (2008) recognizes this fact

that today, with rapid development of our society; entrepreneurship has

become one of the most dynamic forces in the economy. Most importantly,

entrepreneurs are particularly vital for bringing innovative products or

technologies to the market.

AfDB (2012) contended that supporting the development of micro, small and

medium-sized enterprises offers an important vehicle for social

development. This is largely because such enterprises need limited

financing to take off and they carter mainly for the needs of poor house

holds, provide a very important incubating base for emerging businesses

and a seedbed for indigenous entrepreneurship.

Zambia, which is a developing nation, has recognized that this sector

alone as a potential for creating steady job opportunities, increase GDP

and reduce poverty levels among citizens. A strongly developed

entrepreneurial sector is a source of national competitive advantage in

attracting foreign director investment into several sectors of the

economy, thereby, creating job opportunities, reducing poverty and

increasing economic growth.

Schrumm, C (2007) as presented in Dharma (2012) posited that

entrepreneurship is key to stay as economic super power. For the US to

survive and continue its economic and political leadership in the world,

we must see entrepreneurship as our central comparative advantage.

Nothing else can give us the necessary leverage to remain economic

superpower. This point aid our understanding that an economy that leads

in the area of entrepreneurship is poised to be an economic superpower.

Page 16 of 30

In Zambia, the need to establish, develop and promote entrepreneurship

cannot be overemphasized, in a country where 32% are in formal employment

simply means that we need to empower several individuals with potential

to set up and manage enterprises as the way of promoting job creation

among citizens.

The importance of entrepreneurs cannot be underestimated at all; they are

overwhelmingly responsible for maintaining both intra and extra-trade

within and out-side the country. In this regard, entrepreneurship opens

up new doors of opportunities in markets beyond the domestic ones. In

short, a fully functioning entrepreneurial sector acts as a driving force

of a country’s political and economical renown on the international

stage.

Due to their competitive nature, they are efficient exploiters of

national resources and make the economy more fluid. On the other hand,

the distribution of resources among people is more efficient and helps to

reach out to a wider population even those who live in the remotest areas

in their quest for making a profit.

Challenges to Entrepreneurship

Education and Training

Most entrepreneurs are not educated and those that are, have received

poor training. Consequently, many entrepreneurs suffer from chronic

deficiency of necessary managerial skills to operate an enterprise. OECD

(2011) identified poor managerial skills as a major hindrance to

entrepreneurship development. This, in part, explains why such a hugePage 17 of 30

number of start-up firms do not see the day of their official opening. A

well trained person will poses high degree of managerial and

organizational skills which are critical ingredients to operating an

enterprise.

Miriam et al (2012) said that lack of managerial capital has broad

implications for growth as well as the effectiveness of other important

factors. Actually, this notion is supported by the theory in

microeconomics in an earlier tradition that models the importance of

managerial capital and its allocation. Lucas (1978) and Rosen (1982) as

presented in Miriam et al (2012) concluded that talent for managing is an

important factor of production. This is crucial to entrepreneurs to

develop and sharpen up the skills of managing their enterprises.

Absolutely, lack of managerial capital can indeed be a hindrance to

growth.

Access to Business Development Experts (BDEs)

Business consultancy services in Zambia charge exorbitantly high fees

making themselves too scarce for the affordability of the majority

entrepreneurs. The need to make such services readily available for

anyone who needs them in order to improve the running of enterprises is

justified through a collective consensus to see that entrepreneurs run

sustainable businesses that have the capacity to supplement government

efforts in creating job opportunities, economic growth and see that

poverty levels are reduced among the people.

Marketing know-how

Page 18 of 30

Most entrepreneurs lack the capacities and capabilities to identify

market opportunities and match them correctly with the desires of the

market. This poor knowledge of the market in which they are supposedly

operating is highly retrogressive to the success of the sector. They are

highly susceptible to both entry and exit barriers of the markets.

Lack of coherent synergies between training institutions and industries

Lack of coherent, concise and precise strategies to promote synergistic

cooperation between training institutions and industry firms presents a

serious gap in the economic development agenda of the nation. Concerted

efforts should be directed towards establishing close linkages between

universities and industry organizations. Encourage a sense of cooperation

in order to allow strengthening the institutional status that supports

the development of the bases of innovation and entrepreneurship

Infrastructural and institutional challenges

In most developing countries, the state of infrastructures and

institutions is very poor to support economic take-off of

entrepreneurships. These ranges from high cost and erratic supply of

energy, transport system is moribund, unregulated rentals poor and

corrupt regulatory organizations leaves much to be desired. All these

make the development of entrepreneurship quite hard to gem.

Transport system

Lack of an effective and efficient transport system is another huge blow

to entrepreneurs in the country. This affects the amount of goods and

Page 19 of 30

services exchanged in the economy. As we have seen from above that

entrepreneurship requires a robust, stable and sound transport system in

order to achieve speed, dynamism, specialization and innovation to thrive

but all these are simply washed away by a very poor transport network.

Good transport networks connect communities and open up others to

commerce therefore increasing entrepreneurial opportunities for growth.

Moving goods from hubs of manufacturing to market places absolutely

demands for a robust, sound and stable transport system in order to

accomplish this process and fulfill economic aspirations of

entrepreneurs.

Financial challenges

Most, if not all literature on entrepreneurship development points to,

among other things, lack of capital as a major hindering factor that

entrepreneurs encounter. Access to capital such as bank loans are heavily

securitized, many lending institutions requires one to have assets,

immovable or movable depending on the nature and type of capital one

wishes to acquire. For example, if one wants to acquire a loan from

commercial bank, the bank will ask you to present at least one of these

items a running car, a house or a shop and so forth as security for

obtaining a loan from them.

Morgan (2012) contended that to fully realize the potential of

entrepreneurs, the sector needs to be approached with a fresh perspective

attuned to the challenges it faces. He further argued that there is need

for focus to shift from the available collateral in the business to the

viability of the business and the ability of the entrepreneur.

Page 20 of 30

AfDB (2012) commented that in many African countries, local

entrepreneurship has been hindered by inadequate access to finance, by

poor infrastructure, and a harsh regulatory environment favoring modern

technologies/businesses.

In this respect, it is true that businesses face diverse challenges and

have differing needs and as such require tailored services; some

businesses may require short-term technical support on a specific system,

while others need broader strategic support.

Jenkins and Sutton (2007) posit that one of the potential obstacles to

financial inclusion is informality. Most entrepreneurs operate in an

informal sector lacking legal ownership of land, homes and business which

are all used as collateral in the access to financing. All these hamper

entrepreneurs’ efforts in accessing capital. Chilumbi (2009) argued that

banks and other loan providing services lend out money on collateral and

a business plan basis without monitoring whether it has been used for the

intended purpose.

Richtemeryer, G. (2008) adds another dimension to this that entrepreneurs

should cultivate sound understanding of business finance, access to

capital, and relationship with lenders which are all integral to the

success of their businesses. Indeed, a better understanding of the

problems entrepreneurs face at varying points in their business lives

provides tremendous opportunities to shape programs, products, services,

and tools to meet these needs.

Page 21 of 30

Most entrepreneurs are college or university graduate or redundant

individuals who may be without properties at all. This implies that they

cannot qualify, in the first place, for a bank loan.

Furthermore, those who may be able to present one of these assets and

qualify for the loan, they will have to brave themselves for the

cumbersomeness of bank loan procedures such that even the timeframe you

needed this money for has elapsed and its value is depreciated.

Financial innovation will always be crucial to addressing this dilemma of

entrepreneurs. Chilumbi (2009) posited that because of high interest

rates on loans and lack of collaterals most entrepreneurs fail to access

capital for financing their enterprises.

Microfinance institutions are faster than commercial banks. However, the

interest rate at which these microfinance institutions lend out to

entrepreneurs are way beyond the capacity of the enterprise to be able to

repay the installments.

Although, today, one would arguably contend that the financial market is

highly subscribed due to many banks operating in the country, access to

capital still remains a number one major challenge for entrepreneurship

development and management. Higher interest rate coupled with

unreasonable taxes make the entire economy unattractive to domestic

investment and this erodes away the incentives for investment by local

entrepreneurs.

Page 22 of 30

General discussions

The concept of entrepreneurship is vast in scope. It has received great

deal of attention from many scholars of renowned proportions.

Entrepreneurship is not new and has something to do with individual

ingenuity and the ability to turn dreams into reality. Entrepreneurship

demonstrates to us that certain individuals are gifted with creativity

while others are gifted with the ability to accomplish that creative

power by transforming it into use.

It is this creative power that energizes innovation and financing to

achieve entrepreneurship, and face the risk in an uncertain business

environment. To this end, economies that identify these two facets and

integrate them into their agenda will be the next global super powers.

Higher interest rates in the financial sector deny most entrepreneurs’

access to capital to enable them finance their enterprises. This proves

two things, first, in part, explains why only 70 per cent of all start

ups businesses do not take off. Instead they remain as creative

imaginations of the conceiver. Secondly, those that manages to start,

suffers financial inertia due to sluggish flow of financial capital to

entrepreneurs, this entails one thing, sustainable efforts to keep and

nurture entrepreneurships through a learning curve are merely hampered by

the cost of borrowing.

In the fast changing knowledge based economy, identifying financing gaps

is crucial; this is due to the speed of innovation. Actually, it is those

innovative entrepreneurs with high potential for growth, have played a

Page 23 of 30

pivotal role in raising productivity and maintaining competitiveness in

recent years. Notwithstanding how innovative products and services are,

they need investment to flourish.

Entrepreneurs tend to be competitive in nature and exhibits speed,

dynamism, focus and flexibility, specialization and innovation. Thus,

creating an atmosphere where everyone with a dream can find opportunities

to turn them into reality, promoting financial innovation in the capital

market by tailoring financial products suited for empowering and driving

entrepreneurship will always play a pivotal role in accelerating the

development of the entrepreneurial sector. This is because a widely

available and equitable sources of capital, which comes out as number one

challenge, has a potent power of adding depth to entrepreneurship

development

Access to markets promotes intra-trade this requires a liberalized market

in which every individual is free to operate. However, we have seen that

there exist a number of barriers to markets that prevent entrepreneurs

from accessing them. This is why it will be recommended that government

intervening policies and strategies aimed at developing the sector must

be directed at reducing and eliminating these barriers, for instance,

investing in the development of infrastructures such as transport,

communication, safety and security while strengthening institutions that

foster entrepreneurship development is incredibly vital.

Great universities with up-to-date curriculum in order to provide high

class education and training to students as future captains of the

industries add a new dimension to creativity and innovation and

entrepreneurship

Page 24 of 30

Sound and equitable regulations and administering of taxes, inflations,

interest rates and so forth all are beneficial to entrepreneurs

All the above points support the creation of a robust, efficient and

vibrant entrepreneurial sector that is capable of generating the much

needed job opportunities, innovation and economic prosperity thereby

sustaining the well being of the people. Full throttle entrepreneurial

sector is guaranteed economic engine to higher productivity, increased

GDP and promote the nation towards international trade for the surplus

goods. International trade is beneficial as it brings in forex to support

our economy.

Access to market creates competition; competition promotes high quality

goods being readily available for the consumers. In this way improved

living standards are sustained. Open access to markets is essential for

the success of entrepreneurs to exchange their products for economic

Maintaining close relationships with larger firms is vital to

entrepreneurs as we have seen from the globally renowned gurus of

entrepreneurship, all had close relationships with their former

employers. In Zambia, most entrepreneurs in the mining sector offer

specialized services to larger mining firm such First Quantum Mine and

Konkola Copper Mine. Such services ranges from recruitment, maintenance,

construction, plant machinery leasing and hiring and so forth are all

very important bases for cultivating sound relationship with larger

firms.

The financial sector in Zambia is highly dominated by banks, that is, it

is bank-based, and this implies that banks are the main source of finance

Page 25 of 30

for entrepreneurs. In this respect, creating a flourishing

entrepreneurial sector requires that entrepreneurs must have access to

bank credits.

Government efforts to support the entrepreneurship development in Zambia

date back to post colonial era. Today the government has recapitalized

the citizen economic empowerment commission (CEEC) to receive projects

and business plans from entrepreneurs. When the commission began, it

focused more on just approving and financing viable business projects.

Unfortunately, the level of failure among start ups enterprises was very

high this was due to the knowledge gap. This led to the realization of

the need to engage entrepreneurs from the time a project has been

approved, the commission place entrepreneurs under supervision and

monitoring progress at the same time offering business advice until they

gain a desire pedigree to be able to run on their own.

The fact that entrepreneurs, particularly innovative ones are

increasingly becoming vital to economic growth, the role of the

government in creating a favorable atmosphere is absolutely. From this

paradigm, it is understandable that the government created a microfinance

firm specifically to lend out capital to civil servants such as the

teachers, nurses, and defense and security personnel to enable them

invest into entrepreneurship.

This government deliberate policy approach is key for developing a large

scale cadre of entrepreneurs and continue to grow the economy that is

supported via a robust, stable and sound private sector development.

Making several entrepreneurs have access to financing is incredibly

Page 26 of 30

significant to stimulating a fast paced economic performance and indeed a

positive step to poverty alleviation.

To this end, government measures aimed at developing, managing and

promoting entrepreneurship, should be focused, making markets work

efficiently to the advantage of entrepreneurs. This would require

providing incentives to encourage entrepreneurs taking a leading role in

driving the economy. In this case a shift from bank base system to a

market based system would offer much hope for the development of

entrepreneurial sector in Zambia.

Conclusions

Our education and training in all learning institutions should be

designed in such a way that it forestalls in us the abilities and

capacities to enable creative thinking. The difference between inventors

and entrepreneurs means that there is, in the world of commerce, a

dignified place where cooperation and partnerships can be forged with

purposes of accomplishing our dreams. Truly, innovation is an interface

to this feat and proves to all of us that indeed entrepreneurship is

absolutely indelible to economic growth. Notwithstanding the many factors

that act as barriers to entrepreneurship, our campaign should be one that

raises awareness to the benefits of a well developed sector. In this

regard, ours is to modify the financial sector to be oriented towards the

oiling the engines of economic development and accelerating the unlocking

of potentials that lies in entrepreneurs.

Recommendations

Page 27 of 30

Having analyzed several literatures on the subject I hereby recommend the

following;

Financial access:

The cost of borrowing should be reduced to levels that allow a vast

majority of individuals’ access capital to finance their enterprises.

This may also include promoting financial innovation in the areas of

designing financial products targeted at entrepreneurs in the market. On

the same score I recommend preferential forms of taxes to be given to

them as a way of motivating and encouraging the formation of businesses.

Finance is critical as it is required for the realization of the whole

process of generating an idea to offering a product to the market.

Market access:

I recommend that infrastructures and institutions established to enhance

the smooth functioning of markets must be strengthened by making them

being well resourced. In this way, they would be better placed to

effectively and efficiently supporting the development of vibrant

entrepreneurships in the country that have the capacities and

capabilities to equal the challenges of the 21st century business

environment.

Government intervention:

I further recommend that government intervening efforts should be aimed

at supporting the atmosphere under which entrepreneurship can easily be

established and nurtured. Providing tax incentives, capital machinery

import subsidies as well as an efficient regulatory system in place will

most definitely encourage domestic entrepreneurs to participate in thePage 28 of 30

markets via entrepreneurship. This will require introducing the learning

and training of entrepreneurship early in our education system will

unequivocally provide a long term to growth solution to economies

especially on the African continent.

In order to develop the economy, there is need for the government to take

a leading role in investing in far frang areas such the current programs

of opening up varsities in all provinces. This has a propensity to

attract private investment into such areas.

Bibliography

AfDB (2012) Briefing notes for AfDB’s Long-Term Strategy:Supporting Innovation and entrepreneurship for socioeconomic Development. Date: 7 march 2012

Chilumbi, L. (2009). Accessing equity-based financing on the Zambian market. Copperbelt University

Dharma (2012). Entrepreneurship: opportunities and challenges. Center economic research

Doing business: making a difference for entrepreneurs. World Bank and International financial commission, 2011

Ekankumo,B and kemebaradikumo. (2011). Entrepreneurship and entrepreneurial education (EE): a strategy for sustainable development. Asian journal of business management. Maxwell scientific organization

Johnson, G. and Scholes, K. (2005). Exploring Corporate Strategy: Text and Cases. 5th Edition. Prentice Hall Financial times

Johnson, Scholes and Whitting (2008). Exploring Corporate Strategy: Text and Cases. 8th Edition. Prentice Hall Financial times

Page 29 of 30

Miriam et al (2012). what capital is missing in developing countries. Bell journal of economics

Morgan, J.P. (2011). Report on support to SMEs in Developing Countries thorough financial intermediaries. Dalberg

Morgan, J.P. (2012). The small and medium enterprises (SME) sector – A catalyst for growth in South Africa. Dalberg

Shahid, M. (2008). The challenges of entrepreneurship in dynamic society.Bang college of business, Almity Central Asia business

Sutton, C. and Jenkins, B. (2007). The role of the financial services sector in expanding the economic opportunities. John F. Kennedy School ofGovernment/Harvard university

Teveta (2009). Entrepreurship development: manual for trainers/instructortraining.

UNECE (2012). Fostering innovative Entrepreneurship: challenges and policy United Nations, new York Geneva www.worldbank.org

Richtemeryer, G. (2008). Problems entrepreneurs face. BRIDG

Page 30 of 30