Learning from African entrepreneurship—on the psychological function of entrepreneurial preparedness

Abstract

Psychological preparedness for entrepreneurial actions helps to connect macro-institutional support for entrepreneurs to actions of entrepreneurs. Action knowledge and personal initiative are part of entrepreneurial preparedness, and there are two training concepts that have been developed to increase the number of entrepreneurs among BA and high school students in low- and middle-income countries and to improve the skills and mindset of entrepreneurs. I discuss large-scale randomized controlled interventions in both of these areas with the STEP and personal initiative training. Showing that psychological preparedness for entrepreneurial actions can be enhanced, the question is whether methods shown to work in low-income countries can inform entrepreneurship research in general. Issues that seem to speak against generalizing are often seen in necessity, survivalist, and informal entrepreneurship. These issues are discussed and are deemed of lower importance for generalization of findings. There are also methodological advantages when doing research in low- and middle income countries. Practical and policy implications are also provided. Entrepreneurship is about taking action and seizing opportunities. People often think of African entrepreneurs as just trying to survive, but there is more to it. In fact, Africa has likely many more entrepreneurs than the West, and these young business people are keen to learn and grow. We have created training programs for university and high school students to boost the number of entrepreneurs and improve their skills. We have tested these programs with over 6000 students across 11 developing countries, and they have been successful: Training participants started 30% more businesses than the control group. We have also developed a training called personal initiative to help entrepreneurs increase their profits by up to 30%. This has been tested with thousands of participants in ten countries. What makes these training programs special is that they are scientifically tested and proven to be highly effective (the tests were similar to examining the effectiveness of a new medicine). They focus on immediate skill and mindset learning. Psychological training helps entrepreneurs be ready to make the most of government and macro-economic support for businesses. So, there is a lot we can learn from entrepreneurship in Africa.

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