Innovation and entrepreneurship. africa in dillema

INNOVATION AND
ENTREPRENEURSHIP.
AFRICA IN DILEMA
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2021
By Minani Leodegard
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INNOVATION
AND
ENTREPRENE
URSHIP.
AFRICA IN
DILEMA
[Document subtitle]
By Minani Leodegard
“According to the African Development Bank, 22 percent of Africa's
working-age population are starting businesses…” Entrepreneurship
or just informal sector?
2021
INNOVATION AND
ENTREPRENEURSHIP. AFRICA IN
DILEMA
By Minani Leodegard
E M A I L : M I N A N I L E O D E G A R D @ G M A I L . C O M

INNOVATION AND ENTREPRENEURSHIP. AFRICAIN DILEMA.
BY MINANI LEODEGARD minanileodegard@gmail.com
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FOREWORD
Innovation and economic growth are important. A larger company offers work to more
people, pays millions of monthly returns to revenue bodies, avails itself of more knowledge,
has more development opportunities and is able to wield more influence. Innovation is the
key to achieve such sustainable growth. Unfortunately small enterprises in African countries
are only growing at a snail’s pace.
This book emphasizes on explaining innovation and entrepreneurship at large and African
position is annexed. It identifies the roadblocks for innovators and entrepreneurs and
discusses ways for developing an ecosystem for innovators and entrepreneurs to pave a way
through the barriers and create ground-breaking products and new technologies which meet
consumers’ needs.
This book will be of interest to researchers, students, international agencies, governments,
businesses and individuals interested in the field of innovation and its potentials. It will also
be relevant to investors, manufacturers and other stakeholders involved in the economic
development of Africa.

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INTRODUCTION
We should now consider why countries must invest in science and technology, how science
creates wealth, and what we must do to achieve this "new liberation" – using untapped
natural wealth, human resources, and effective policy execution to create explosive wealth
that creates national and continental technology hubs. The secret that lies behind science and
the prosperity of nations is simple but profound: ideas matter … This is the most important
secret of the wealth of the industrialised world. And the constant pursuit of the economic and
military advantage and superiority which scientific invention and technology confer is an
essential component of a world-view that changes the realities on the ground.
In this race of exploiting innovation and technology, Africa has fallen behind because its
people, despite their historical abilities in science, have not done this in an organised manner.
The more the western world was able to invent and innovate in the past 300 years, the more
"civilised" it became. And as Africa, in comparison, remained closer to nature and was
dominated by natural phenomena, the more "primitive" and backward the continent seemed.
Western science led to the invention of gunpowder and other superior military weapons that
outclassed bows, arrows and spears. Combined with the development of shipping
transportation, the west became intrepid explorers of the world, developed a world-view of
racial superiority, which led it to achieve military and economic conquests that resulted in
transatlantic slavery and colonialism.
It is difficult now to imagine life without electricity, refrigerators, cars, telephones, air-
conditioners, railways, dishwashers, and many other everyday appliances that make life in the
modern era convenient, comfortable, and more economically productive. But for millions of
Africans, life without these inventions and the innovations based on them is still their daily
reality. And that reality often is nasty, brutish and short. Science, technology and innovation
can turn their destiny around – and should …
African countries need to make technology and innovation a strategic priority from the
standpoint of a world-view that Africa can invent and innovate, and must do so in order to
liberate itself from the oppressive dominance of globalisation. Why not manufacture its own
mobile phones or innovate based on the original cell phone? In doing so, African countries
need to understand that there really is no such thing as "transfer of technology". No nation
will willingly transfer its technological know-how to others because that knowledge is the
basis of competitive advantage. Industrial nations can at best give a developing country a
shallow surface insight into their know-how, and even then only in the context of foreign
investment deals in which developed countries that host foreign direct investment inflows
skilfully negotiate and secure such agreements, and have skilled workforces to absorb and
expand on such prowess.

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TABLE OF CONTENTS
INTRODUCTION ..................................................................................................................... iii
TABLE OF CONTENTS................................................................................................................... iv
CHAPTER ONE. INNOVATION...............................................................................................1
1.1. Understanding the term innovation..............................................................................1
1.2. Creativity and innovation ............................................................................................2
1.3. Sustaining vs disruptive innovation..............................................................................2
1.4. History of innovation ...................................................................................................3
1.5. Process of innovation ...................................................................................................5
1.6. Sources of innovation ...............................................................................................5
1.7. Factors facilitating innovation..................................................................................6
1.8. Diffusion of innovation.................................................................................................7
1.9. Measurement of innovation..........................................................................................8
1.9.1. Organizational-level..............................................................................................8
1.9.2. Political-level ........................................................................................................8
1.10. Indicators of innovation........................................................................................9
1.11. Innovation index.......................................................................................................9
1.12. Rate of innovation .................................................................................................. 10
1.13. Innovation and development .................................................................................. 11
1.14. Government policies towards innovation................................................................ 11
1.15. COVID-19 PANDEMIC and its impact ON innovation.......................................... 12
CHAPTER 2. INNOVATION IN AFRICA............................................................................... 14
2.1. History of African Innovation.................................................................................... 14
2.2. Key Examples of African Innovation ......................................................................... 15
2.3. Key Players in the African Innovation Space ............................................................. 15
2.4. The future of innovation in Africa.............................................................................. 16
2.5. Key statistics of Africa innovation ................................................................................ 16
CHAPTER 3. ENTREPRENEURSHIP .................................................................................... 17
3.1. Understanding the term entrepreneurship................................................................. 17
3.2. History of entrepreneurship....................................................................................... 17
3.2.1. Innovation in 20th century.................................................................................. 18
3.2.2. Innovation in 21st century .................................................................................. 19
3.3. Perspectives on entrepreneurship............................................................................... 20

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3.4. Elements of entrepreneurship .................................................................................... 20
3.5. Relationship between small business and entrepreneurship ................................... 22
3.6. Entrepreneurial behaviors ......................................................................................... 22
3.6.1. Uncertainty perception and risk-taking.............................................................. 22
3.6.2. "Coachability" and advice taking....................................................................... 23
3.7. Strategic entrepreneurship......................................................................................... 23
3.8. Entrepreneurship training and education .................................................................. 24
3.9. Entrepreneurial resources.......................................................................................... 24
3.9.1. Additional financing ........................................................................................... 25
3.9.2. Predictors of success............................................................................................... 25
CHAPTER 4. ENTREPRENEURSHIP IN AFRICA................................................................ 27
4.1. Key info graphic data ....................................................................................................... 27
4.2. Entrepreneurship or just informal sector in Africa............................................................. 29
4.3. Perspectives for Africa innovation and entrepreneurship restoration................................ 29
4.3.1. Education/ Expertise Gap .......................................................................................... 29
4.3.2. Outdated government policies and leadership styles.................................................. 29
4.3.3. Infrastructure............................................................................................................ 29
4.3.4. Corruption ................................................................................................................ 30
4.3.5. Lack of Innovation..................................................................................................... 30
REFERENCES........................................................................................................................... 31
ABOUT THE AUTHOR........................................................................................................................33

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CHAPTER ONE. INNOVATION
1.1. Understanding the term innovation
Innovation is the practical implementation of ideas that result in the introduction of new
goods or services or improvement in offering goods or services. ISO TC 2791
on innovation
management proposes in the standards, ISO 56000:2020 to define innovation as "a new or
changed entity creating or redistributing value". However, many scholars and governmental
organizations have given their own definition of the concept. Some common element in the
different definitions is a focus on newness, improvement and spread. It is also often viewed
as taking place through the provision of more-effective products, processes, services,
technologies, art works or business models that innovators make available to markets,
governments and society. Innovation is related to, but not the same as, invention: innovation
is more apt to involve the practical implementation of an invention (i.e. new / improved
ability) to make a meaningful impact in a market or society, and not all innovations require a
new invention.
Surveys of the literature on innovation have found a large variety of definitions. In 2009,
Baregheh et al. found around 60 definitions in different scientific papers, while a 2014 survey
found over 40. Based on their survey, Baragheh et al. attempted to define a multidisciplinary
definition and arrived at the following definition:
"Innovation is the multi-stage process whereby organizations transform ideas into
new/improved products, service or processes, in order to advance, compete and differentiate
themselves successfully in their marketplace"
In an industrial survey of how the software industry defined innovation, the following
definition given by Crossan and Apaydin was considered to be the most complete, which
builds on the Organisation for Economic Co-operation and Development (OECD)2
manual's
definition:
Innovation is production or adoption, assimilation, and exploitation of a value-added novelty
in economic and social spheres; renewal and enlargement of products, services, and markets;
development of new methods of production; and the establishment of new management
systems. It is both a process and an outcome.
Influential scholar Everett Rogers3
, defines it as follows:
"An idea, practice, or object that is perceived as new by an individual or other unit of
adoption"
1
ISO/TC is a technical committee of the International Organization for Standardization (ISO). Its
purpose is to develop, maintain and promote standards in the fields of innovation management.
2
The Organisation for Economic Co-operation and Development (OECD) is an intergovernmental
economic organisation with 37 member countries, founded in 1961 to stimulate economic progress and
world trade. It is a forum of countries describing themselves as committed to democracy and the market
economy, providing a platform to compare policy experiences, seek answers to common problems,
identify good practices and coordinate domestic and international policies of its members.
3
Everett M. "Ev" Rogers (March 6, 1931 – October 21, 2004) was an eminent American communication
theorist and sociologist, who originated the diffusion of innovations theory and introduced the term early
adopter.

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According to Kanter, innovation includes original invention and creative use and defines
innovation as a generation, admission and realization of new ideas, products, services and
processes.
Two main dimensions of innovation were degree of [novelty] (i.e. whether an innovation is
new to the firm, new to the market, new to the industry, or new to the world) and kind of
innovation (i.e. whether it is processor product-service system innovation). In recent
organizational scholarship, researchers of workplaces have also distinguished innovation to
be separate from creativity, by providing an updated definition of these two related but
distinct constructs:
Workplace creativity concerns the cognitive and behavioral processes applied when
attempting to generate novel ideas. Workplace innovation concerns the processes applied
when attempting to implement new ideas. Specifically, innovation involves some
combination of problem/opportunity identification, the introduction, adoption or modification
of new ideas germane to organizational needs, the promotion of these ideas, and the practical
implementation of these ideas.
Peter Drucker4
wrote: Innovation is the specific function of entrepreneurship, whether in an
existing business, a public service institution, or a new venture started by a lone individual in
the family kitchen. It is the means by which the entrepreneur either creates new wealth-
producing resources or endows existing resources with enhanced potential for creating
wealth.
1.2. Creativity and innovation
In general, innovation is distinguished from creativity by its emphasis on the implementation
of creative ideas in an economic setting. Amabile and Pratt in 2016, drawing on the literature,
distinguish between creativity ("the production of novel and useful ideas by an individual or
small group of individuals working together") and innovation ("the successful
implementation of creative ideas within an organization"), and as such, they consider both
part of the same process.
1.3. Sustaining vs disruptive innovation
One framework proposed by Clayton Christensen5
draws a distinction between sustaining and
disruptive innovations. Sustaining innovation is the improvement of a product or service
based on the known needs of current customers (e.g. faster microprocessors, flat screen
4
Peter Ferdinand Drucker (November 19, 1909 – November 11, 2005) was an Austrian management
consultant, educator, and author, whose writings contributed to the philosophical and practical
foundations of the modern business corporation. He was also a leader in the development of management
education, he invented the concept known as management by objectives and self-control, and he has been
described as "the founder of modern management".
5
Clayton Magleby Christensen (April 6, 1952 – January 23, 2020) was an American academic and
business consultant who developed the theory of "disruptive innovation", which has been called the most
influential business idea of the early 21st century. Christensen introduced "disruption" in his 1997 book
The Innovator's Dilemma, and it led The Economist to term him "the most influential management
thinker of his time."

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televisions). Disruptive innovation in contrast refers to a process by which a new product or
service creates a new market (e.g. transistor radio, free crowdsourcedencyclopedia, etc.),
eventually displacing established competitors. According to Christensen, disruptive
innovations are critical to long-term success in business.
Disruptive innovation is often enabled by disruptive technology. Marco Iansiti and Karim R.
Lakhani define foundational technology as having the potential to create new foundations for
global technology systems over the longer term. Foundational technology tends to transform
business operating models6
as entirely new business models emerge over many years, with
gradual and steady adoption of the innovation leading to waves of technological and
institutional change that gain momentum more slowly. he advent of the packet-switched
communication protocol TCP/IP7
—originally introduced in 1972 to support a single use case
for United States Department of Defence electronic communication (email), and which
gained widespread adoption only in the mid-1990s with the advent of the World Wide
Web8
—is a foundational technology.
1.4. History of innovation
The word "innovation" once had a quite different meaning. The first full-length discussion
about innovation is the account by the Greek philosopher and historian Xenophon9
(430–355
BCE). He viewed the concept to be multifaceted and connected it to political action. The
word for innovation that he uses is 'Kainotomia' (innovation) and before him it had been used
in two plays by Aristophanes10
. Plato11
discussed innovation in his book Laws and was not
very fond of the concept. He was sceptical to it in both culture (dancing and art) and
education (he did not believe in introducing new games and toys to the kids). Aristotle12
did
not like organizational innovations as he believed that "All possible forms of organization
6
An operating model is both an abstract and visual representation (model) of how an organization
delivers value to its customers or beneficiaries as well as how an organization actually runs itself.
7
The Internet protocol suite is the conceptual model and set of communications protocols used in the
Internet and similar computer networks. It is commonly known as TCP/IP because the foundational
protocols in the suite are the Transmission Control Protocol (TCP) and the Internet Protocol (IP). During
its development, versions of it were known as the Department of Defence (DoD) model because the
development of the networking method was funded by the United States Department of Defense.
8
The World Wide Web (WWW), commonly known as the Web, is an information system where
documents and other web resources are identified by Uniform Resource Locators (URLs, such as
https://example.com/), which may be interlinked by hyperlinks, and are accessible over the Internet. The
resources of the Web are transferred via the Hypertext Transfer Protocol (HTTP), may be accessed by
users by a software application called a web browser, and are published by a software application called a
web server. The World Wide Web is not synonymous with the Internet, which pre-dated the Web in some
form by over two decades and upon which technologies the Web is built.
9
Xenophon of Athens was an Athenian-born military leader, philosopher, and historian. At the age of 30,
Xenophon was elected a commander of one of the biggest Greek mercenary armies, the Ten Thousand,
that marched on and came close to capturing Babylon in 401 BC. As the military historian Theodore
Ayrault Dodge wrote, "the centuries since have devised nothing to surpass the genius of this warrior".
10
Aristophanes (c. 446 – c. 386 BC), son of Philippus, of the deme Kydathenaion (Latin: Cydathenaeum),
was a comic playwright or comedy-writer of ancient Athens and a poet of Old Attic Comedy.
11
Plato (428/427 or 424/423 – 348/347 BC) was an Athenian philosopher during the Classical period in
Ancient Greece, founder of the Platonist school of thought and the Academy, the first institution of higher
learning in the Western world.
12
Aristotle (384–322 BC) was a Greek philosopher and polymath during the Classical period in Ancient
Greece. Taught by Plato, he was the founder of the Lyceum, the Peripatetic school of philosophy, and the
Aristotelian tradition. His writings cover many subjects including physics, biology, zoology, metaphysics,
logic, ethics, aesthetics, poetry, theatre, music, rhetoric, psychology, linguistics, economics, politics,
meteorology, geology and government.

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have now been discovered. If another form of organization was really good it would have
been discovered already (Politics II as cited by Benoît Godin 2015)
Before the 4th century in Rome, the words novitas and res nova / nova resmeant were used
with either negative or positive judgment on the innovator. This concept meant renewing and
this meaning was incorporated into the new word innovo in the centuries that followed. It was
used in the Vulgate bible13
in spiritual as well as political contexts. It was also used in poetry
and then mainly had spiritual connotations but was also connected to political, material and
cultural aspects.
In Machiavelli's14
The Prince15
(1513), innovation is described in a political setting. It is
portrayed as a strategy a Prince may employ in order to cope with a constantly changing
world as well as the corruption within it. Here innovation is described as introducing change
in government (new laws and institutions) in Machiavelli's later book The Discourses (1528)
innovation is described as imitation, as a return to the original that has been corrupted by
people and by time. Thus for Machiavelli Innovation came with positive connotations. This is
however an exception in the description of innovation from the 16th century and onward. No
innovator from the renaissance until the late 19th century ever thought of applying the word
innovator upon themselves, it was a word used to attack enemies.
The word "innovation" once had an older, historical, and quite different meaning. From the
1400 through the 1600s, prior to early European settlement of the Americas from 1492, the
concept of "innovation" was pejorative – the term was an early-modern synonym for
"rebellion", "revolt" and "heresy".It was often associated with religion. Kings and queens
issued declarations against it and if you were very unlucky as the puritan Henry Burton, your
ears could be chopped off if you were accused of innovating. In the 1800 it was the social
reformers turn to be accused of innovating. People promoting capitalism saw Socialism as an
innovation and spent a lot of energy working against it. For instance Goldwin Smith saw the
spread of social innovations as an attack on money and banks. These social innovations were
socialism, communism, nationalization, cooperative associations. Thus contrary to what
many people believe, social innovation appeared much earlier than technological innovation.
In the 1900s the concept Innovation did not become popular until after the Second World
War. This is the point in time when people started to talk about technological product
innovation and tie it to the idea of economic growth and competitive advantage. Joseph
Schumpeter16
(1883–1950) is often credited for being the one who made the term popular and
he contributed greatly to the study of innovation economics,
13
The Vulgate is a late-4th-century Latin translation of the Bible. It was to become the Catholic Church's
officially promulgated Latin version of the Bible during the 16th century as the Sixtine Vulgate then as
the Clementine Vulgate; the Vulgate is still presently used in the Latin Church.
14
Niccolò di Bernardo dei Machiavelli (3 May 1469 – 21 June 1527) was an Italian diplomat, philosopher,
politician, historian and writer who lived during the Renaissance. He is best known for The Prince (Il
Principe), written about 1513.
15
The Prince is a 16th-century political treatise written by Italian diplomat and political theorist Niccolò
Machiavelli as an instruction guide for new princes and royals. The general theme of The Prince is of
accepting that the aims of princes – such as glory and survival – can justify the use of immoral means to
achieve those ends.
16
Joseph Alois Schumpeter (February 8, 1883 – January 8, 1950) was an Austrian political economist. He
was born in Moravia, and briefly served as Finance Minister of German-Austria in 1919. In 1932, he

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In business and in economics, innovation can become a catalyst for growth. With rapid
advancements in transportation and communications over the past few decades, the old-world
concepts of factor endowments and comparative advantage which focused on an area's
unique inputs are outmoded for today's global economy. Schumpeter argued that industries
must incessantly revolutionize the economic structure from within, that is innovate with
better or more effective processes and products, as well as market distribution, such as the
connection from the craft shop to factory. He famously asserted that "creative destruction is
the essential fact about capitalism". Entrepreneurs continuously look for better ways to satisfy
their consumer base with improved quality, durability, service and price which come to
fruition in innovation with advanced technologies and organizational strategies.
1.5. Process of innovation
One of the early models included only 3 basic phases for innovation. According to Utterback
(1971), these phases were: 1) idea generation, 2) problem solving, and 3) implementation. By
the time one completed phase 2, one had an invention, but until one got it to the point of
having an economic impact, one didn't have an innovation. Diffusion wasn't considered a
phase of innovation heavy. Focus at this point in time was on manufacturing.
All organizations can innovate, including for example hospitals, universities, and local
governments. The organization requires a proper structure in order to retain competitive
advantage. Organizations can also improve profits and performance by providing work
groups opportunities and resources to innovate, in addition to employee's core job tasks. It is
necessary to create and nurture an environment of innovation. Executives and managers have
been advised to break away from traditional ways of thinking and use change to their
advantage. The world of work is changing with the increase in the use of technology and both
companies and businesses are becoming increasingly competitive. Companies will have to
downsize or reengineer their operations to remain competitive. This will affect employment
as businesses will be forced to reduce the number of people employed while accomplishing
the same amount of work if not more.
1.6. Sources of innovation
Innovation may occur as a result of a focus effort by a range of different agents, by chance, or
as a result of a major system failure. According to Peter F. Drucker17
, the general sources of
innovations are different changes in industry structure, in market structure, in local and global
demographics, in human perception, mood and meaning, in the amount of already available
scientific knowledge, etc.
Original model of three phases of the process of Technological Change
In the simplest linear model of innovation the traditionally recognized source is manufacturer
innovation. This is where an agent (person or business) innovates in order to sell the
innovation. Specifically, R&D measurement is the commonly used input for innovation, in
immigrated to the United States to become a professor at Harvard University, where he remained until
the end of his career, and in 1939 obtained American citizenship.
17
Peter Ferdinand Drucker (November 19, 1909 – November 11, 2005) was an Austrian management
consultant, educator, and author, whose writings contributed to the philosophical and practical
foundations of the modern business corporation.

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particular in the business sector, named Business Expenditure on R&D (BERD) that grew
over the years on the expenses of the declining R&D invested by the public sector.
Another source of innovation, only now becoming widely recognized, is end-user innovation.
This is where an agent (person or company) develops an innovation for their own (personal
or in-house) use because existing products do not meet their needs. MIT economist Eric von
Hippel has identified end-user innovation as, by far, the most important and critical in his
classic book on the subject, "The Sources of Innovation".
The robotics engineer Joseph F. Engelberger asserts that innovations require only three
things:
1. a recognized need
2. competent people with relevant technology
3. financial support
Innovation processes usually involve: identifying customer needs, macro and meso trends,
developing competences, and finding financial support.
The Kline chain-linked model of innovation places emphasis on potential market needs as
drivers of the innovation process, and describes the complex and often iterative feedback
loops between marketing, design, manufacturing, and R&D.
1.7. Factors facilitating innovation
Innovation by businesses is achieved in many ways, with much attention now given to formal
research and development (R&D) for "breakthrough innovations". R&D help spur on patents
and other scientific innovations that leads to productive growth in such areas as industry,
medicine, engineering, and government. Yet, innovations can be developed by less formal
on-the-job modifications of practice, through exchange and combination of professional
experience and by many other routes. Investigation of relationship between the concepts of
innovation and technology transfer revealed overlap. The more radical and revolutionary
innovations tend to emerge from R&D, while more incremental innovations may emerge
from practice – but there are many exceptions to each of these trends.
Information technology and changing business processes and management style can produce
a work climate favorable to innovation. For example, the software tool company Atlassian
conducts quarterly "ShipIt Days" in which employees may work on anything related to the
company's products. Google employees work on self-directed projects for 20% of their time
(known as Innovation Time Off). Both companies cite these bottom-up processes as major
sources for new products and features.
An important innovation factor includes customers buying products or using services. As a
result, organizations may incorporate users in focus groups (user centred approach), work
closely with so called lead users (lead user approach), or users might adapt their products
themselves. The lead user method focuses on idea generation based on leading users to
develop breakthrough innovations. U-STIR, a project to innovate Europe's surface
transportation system, employs such workshops. Regarding this user innovation, a great deal
of innovation is done by those actually implementing and using technologies and products as
part of their normal activities. Sometimes user-innovators may become entrepreneurs, selling

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their product, they may choose to trade their innovation in exchange for other innovations, or
they may be adopted by their suppliers. Nowadays, they may also choose to freely reveal
their innovations, using methods like open source18
. In such networks of innovation the users
or communities of users can further develop technologies and reinvent their social meaning.
One technique for innovating a solution to an identified problem is to actually attempt an
experiment with many possible solutions. This technique was famously used by Thomas
Edison's laboratory to find a version of the incandescent light bulb economically viable for
home use, which involved searching through thousands of possible filament designs before
settling on carbonized bamboo.
This technique is sometimes used in pharmaceutical drug discovery. Thousands of chemical
compounds are subjected to high-throughput screening to see if they have any activity against
a target molecule which has been identified as biologically significant to a disease. Promising
compounds can then be studied; modified to improve efficacy, reduce side effects, and reduce
cost of manufacture; and if successful turned into treatments.
The related technique of A/B testing is often used to help optimize the design of web sites
and mobile apps. This is used by major sites such as amazon.com, Facebook, Google, and
Netflix. Procter & Gamble uses computer-simulated products and online user panels to
conduct larger numbers of experiments to guide the design, packaging, and shelf placement
of consumer products. Capital One uses this technique to drive credit card marketing offers.
1.8. Diffusion of innovation
Diffusion of innovation research was first started in 1903 by seminal researcher Gabriel
Tarde, who first plotted the S-shaped diffusion curve. Tarde defined the innovation-decision
process as a series of steps that include:
1. knowledge
2. forming an attitude
3. a decision to adopt or reject
4. implementation and use
5. confirmation of the decision
Once innovation occurs, innovations may be spread from the innovator to other individuals
and groups. This process has been proposed that the lifecycle of innovations can be described
using the 's-curve' or diffusion curve. The s-curve maps growth of revenue or productivity
against time. In the early stage of a particular innovation, growth is relatively slow as the new
product establishes itself. At some point, customers begin to demand and the product growth
increases more rapidly. New incremental innovations or changes to the product allow growth
to continue. Towards the end of its lifecycle, growth slows and may even begin to decline. In
the later stages, no amount of new investment in that product will yield a normal rate of
return.
The s-curve derives from an assumption that new products are likely to have "product life" –
ie, a start-up phase, a rapid increase in revenue and eventual decline. In fact, the great
18
Open source is source code that is made freely available for possible modification and redistribution.
Products include permission to use the source code, design documents, or content of the product.

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majority of innovations never get off the bottom of the curve, and never produce normal
returns.
Innovative companies will typically be working on new innovations that will eventually
replace older ones. Successive s-curves will come along to replace older ones and continue to
drive growth upwards. In the figure above the first curve shows a current technology. The
second shows an emerging technology that currently yields lower growth but will eventually
overtake current technology and lead to even greater levels of growth. The length of life will
depend on many factors.
1.9. Measurement of innovation
Measuring innovation is inherently difficult as it implies commensurability so that
comparisons can be made in quantitative terms. Innovation, however, is by definition novelty.
Comparisons are thus often meaningless across products or service. Nevertheless, Edison et
al. in their review of literature on innovation management found 232 innovation metrics.
They categorized these measures along five dimensions; i.e. inputs to the innovation process,
output from the innovation process, effect of the innovation output, measures to access the
activities in an innovation process and availability of factors that facilitate such a process.
There are two different types of measures for innovation: the organizational level and the
political level.
1.9.1. Organizational-level
The measure of innovation at the organizational level relates to individuals, team-level
assessments, and private companies from the smallest to the largest company. Measure of
innovation for organizations can be conducted by surveys, workshops, consultants, or internal
benchmarking. There is today no established general way to measure organizational
innovation. Corporate measurements are generally structured around balanced scorecards
which cover several aspects of innovation such as business measures related to finances,
innovation process efficiency, employees' contribution and motivation, as well benefits for
customers. Measured values will vary widely between businesses, covering for example new
product revenue, spending in R&D, time to market, customer and employee perception &
satisfaction, number of patents, additional sales resulting from past innovations.
1.9.2. Political-level
For the political level, measures of innovation are more focused on a country or region
competitive advantage through innovation. In this context, organizational capabilities can be
evaluated through various evaluation frameworks, such as those of the European Foundation
for Quality Management. The OECD Oslo Manual (1992) suggests standard guidelines on
measuring technological product and process innovation. Some people consider the Oslo
Manual complementary to the Frascati Manual from 1963. The new Oslo Manual from 2018
takes a wider perspective to innovation, and includes marketing and organizational
innovation. These standards are used for example in the Community Innovation
Surveys.Other ways of measuring innovation have traditionally been expenditure, for
example, investment in R&D (Research and Development) as percentage of GNP (Gross
National Product). Whether this is a good measurement of innovation has been widely
discussed and the Oslo Manual has incorporated some of the critique against earlier methods

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of measuring. The traditional methods of measuring still inform many policy decisions. The
EU Lisbon Strategy has set as a goal that their average expenditure on R&D should be 3% of
GDP. In a study, the top spenders in terms of R&D in 2018 spent an average of 22% of their
GP (Gross Profit) on R&D.
1.10. Indicators of innovation
Many scholars claim that there is a great bias towards the "science and technology mode"
(S&T-mode or STI-mode), while the "learning by doing, using and interacting mode" (DUI-
mode) is ignored and measurements and research about it rarely done. For example, an
institution may be high tech with the latest equipment, but lacks crucial doing, using and
interacting tasks important for innovation.
A common industry view (unsupported by empirical evidence) is that comparative cost-
effectiveness research is a form of price control which reduces returns to industry, and thus
limits R&D expenditure, stifles future innovation and compromises new products access to
markets. Some academics claim cost-effectiveness research is a valuable value-based
measure of innovation which accords "truly significant" therapeutic advances (i.e. providing
"health gain") higher prices than free market mechanisms. Such value-based pricing has been
viewed as a means of indicating to industry the type of innovation that should be rewarded
from the public purse.
1.11. Innovation index
Common areas of focus include: high-tech companies, manufacturing, patents, post-
secondary education, research and development, and research personnel. The left ranking of
the top 10 countries below is based on the 2020 Bloomberg Innovation Index. However,
studies may vary widely; for example the Global Innovation Index 2016 ranks Switzerland as
number one wherein countries like South Korea, Japan, and China do not even make the top
ten.
Bloomberg Innovation Index
2020
Rank Country/Territory Index
1 Germany 87.38
2 South Korea 87.3
3 Singapore 85.57
4 Switzerland 85.49
5 Sweden 84.78
6 Israel 84.49
7 Finland 84.15
8 Denmark 83.21
9 United States 81.40
10 France 81.67
Global Innovation Index 2020

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1 Switzerland 66.08
2 Sweden 62.47
3 United States 60.56
4
United
Kingdom
59.78
5 Netherlands 58.76
6 Denmark 57.53
7 Finland 57.02
8 Singapore 56.61
9 Germany 56.55
10 South Korea 56.11
Innovation Indicator 2018
1 Singapore 73
2 Switzerland 72
3 Belgium 59
4 Germany 55
5 Sweden 54
6 United States 52
7
United
Kingdom
52
8 Denmark 51
9 Ireland 51
10 South Korea 51
1.12. Rate of innovation
In 2005 Jonathan Huebner, a physicist working at the Pentagon's Naval Air Warfare Center,
argued on the basis of both U.S. patents and world technological breakthroughs, per capita,
that the rate of human technological innovation peaked in 1873 and has been slowing ever
since. In his article, he asked "Will the level of technology reach a maximum and then
decline as in the Dark Ages?" In later comments to New Scientist magazine, Huebner
clarified that while he believed that we will reach a rate of innovation in 2024 equivalent to
that of the Dark Ages, he was not predicting the reoccurrence of the Dark Ages themselves.
John Smart criticized the claim and asserted that technological singularity researcher Ray
Kurzweil and others showed a "clear trend of acceleration, not deceleration" when it came to
innovations. The foundation replied to Huebner the journal his article was published in, citing
Second Life and eHarmony as proof of accelerating innovation; to which Huebner replied.
However, Huebner's findings were confirmed in 2010 with U.S. Patent Office data and in a
2012 paper.

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1.13. Innovation and development
The theme of innovation as a tool to disrupting patterns of poverty has gained momentum
since the mid-2000s among major international development actors such as DFID, Gates
Foundation's use of the Grand Challenge funding model, and USAID's Global Development
Lab. Networks have been established to support innovation in development, such as D-Lab at
MIT19
. Investment funds have been established to identify and catalyze innovations in
developing countries, such as DFID's Global Innovation Fund, Human Development
Innovation Fund, and (in partnership with USAID) the Global Development Innovation
Ventures.
The United States has to continue to play on the same level of playing field as its competitors
in federal research. This can be achieved being strategically innovative through investment in
basic research and science".
1.14. Government policies towards innovation
Given the noticeable effects on efficiency, quality of life, and productive growth, innovation
is a key factor in society and economy. Consequently, policymakers have long worked to
develop environments that will foster innovation and its resulting positive benefits, from
funding Research and Development to supporting regulatory change, funding the
development of innovation clusters, and using public purchasing and standardisation to 'pull'
innovation through.
For instance, experts are advocating that the U.S. federal government launch a National
Infrastructure Foundation, a nimble, collaborative strategic intervention organization that will
house innovations programs from fragmented silos under one entity, inform federal officials
on innovation performance metrics, strengthen industry-university partnerships, and support
innovation economic development initiatives, especially to strengthen regional clusters.
Because clusters are the geographic incubators of innovative products and processes, a cluster
development grant program would also be targeted for implementation. By focusing on
innovating in such areas as precision manufacturing, information technology, and clean
energy, other areas of national concern would be tackled including government debt, carbon
footprint, and oil dependence. The U.S. Economic Development Administration understand
this reality in their continued Regional Innovation Clusters initiative. The United States also
has to integrate her supply-chain and improve her applies research capability and downstream
process innovation.
In addition, federal grants in R&D, a crucial driver of innovation and productive growth,
should be expanded to levels similar to Japan, Finland, South Korea, and Switzerland in order
to stay globally competitive. Also, such grants should be better procured to metropolitan
areas, the essential engines of the American economy.
19
MIT D-Lab is a Massachusetts Institute of Technology initiative that works with people around the
world to develop and advance collaborative approaches and practical solutions to global poverty
challenges.

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Many countries recognize the importance of research and development as well as innovation
including Japan's Ministry of Education, Culture, Sports, Science and Technology (MEXT);
Germany's Federal Ministry of Education and Research; and the Ministry of Science and
Technology in the People's Republic of China. Furthermore, Russia's innovation programme
is the Medvedev modernisation programme which aims at creating a diversified economy
based on high technology and innovation. Also, the Government of Western Australia has
established a number of innovation incentives for government departments. Landgate was the
first Western Australian government agency to establish its Innovation Program.
1.15. COVID-19 PANDEMIC and its impact ON innovation
The coronavirus disease (COVID-19) pandemic has triggered an unprecedented global
economic shutdown. At the time of finalizing the GII 2020 edition, restrictive measures are
only starting to be relaxed, while fears of a possible “second wave” remain high. The current
crisis hit the innovation landscape at a time when innovation was flourishing. In 2018,
research and development (R&D) spending grew by 5.2%, i.e., significantly faster than
global GDP growth, after rebounding strongly from the financial crisis of 2008-2009.
Venture capital (VC) and the use of intellectual property (IP) were at an all-time high. In
recent years, political determination to foster innovation has been strong, including in
developing countries; this is a relatively new and promising trend toward democratizing
innovation beyond a select number of top economies and clusters only. Now that global
economic growth will fall deeply in 2020, the question becomes—will R&D, VC, IP, and the
political determination to foster innovation also slump. As innovation is now central to
corporate strategy and national economic growth strategies, there is hope ahead that
innovation will not slump as deeply as foreshadowed. Fundamentally, the pandemic has not
changed the fact that the potential for breakthrough technologies and innovation continues to
abound. Clearly, the top companies and R&D spenders would be ill-advised to drop R&D, IP,
and innovation in their quest to secure competitiveness in the future. Many top R&D firms in
the information technology sector, for example, hold vast cash reserves, and the push to
digitalization will fortify innovation. The pharmaceuticals and biotechnology sector, another
top R&D spender, is likely to experience R&D growth boosted by the renewed focus on
health R&D. Other key sectors, such as transport, will have to adapt faster as the quest for
“clean energy” is receiving renewed interest. Further, the COVID-19 crisis might well
catalyze innovation in many traditional sectors, such as tourism, education, and retail. It may
also spark innovation in how work is organized at the firm- and at the individual level, and
how production is (re)organized locally and globally. Unleashing the above potential is now
essential and requires government support as well as collaborative models and continued
private sector investment in innovation. What are policymakers doing to mitigate the possible
negative effects of the COVID-19 crisis on innovation?
Governments at the head of the largest economies worldwide are setting up emergency relief
packages to cushion the impact of the lockdown and face the looming recession. These
packages aim to prevent short- to medium-term harm to economies. This is sensible. The
immediate focus is on supporting businesses via loan guarantees, for example. Yet, these
emergency relief measures are not explicitly directed to financing innovation and start-ups.
Start-ups are facing hurdles as they try to access the above emergency measures. Moreover,
so far, governments have not made innovation and R&D a priority in current stimulus
packages. There is one exception—health. Countries have injected large and unprecedented

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sums of money into the search for a coronavirus vaccine. Naturally, governments are first and
foremost responsible for the well-being of their people, and the emphasis on health is
understandable and commendable. However, once the pandemic is brought under control, it
is crucial that support for innovation becomes more broad and that it is conducted in a
countercyclical way—i.e., as business innovation expenditures slump, governments strive to
counteract that effect with their own expenditure boosts to innovation, even in the face of
higher public debt. In tandem, the impacts of the pandemic on the science and innovation
systems have to be monitored. Some aspects are positive, such as the unexpected level of
international collaboration in science and the reduction of red tape for scientists. Some
aspects, however, are alarming, such as the standstill of major research projects and the
possible (and uneven) reduction of R&D expenditures in some fields.
1.16. Impact of innovation on the entrepreneurship
Today’s global business environment, innovation and creativity are key ingredients in
creating and sustaining strategic advantage. Among the main reasons for this renewal are the
new way of thinking managers and economists from countries with a developed market
economy and a new perception of economic opportunities. However, innovation cannot be
sustainable until and unless it is in aligned with triple bottom line elements that is, economic,
social and environmental dimensions. In this context a sustainable environment helps to
generate innovations and knowledge, it also changes the knowledge characteristics and
ecosystem (Hemsley and Mason, 2013).The entrepreneurial successes are the life blood to
businesses around the world. Organizations therefore strive to meet these regulations and
standards in order to remain compliant, and to increase the efficiency and credibility of the
business. This is evident from the fact that every activity carried out by the businesses
revolve around learning and fulfilling the needs of the customers (Ayyagari et al., 2003;
Chen, 2005;Choi and Hwang, 2015). One aspect of great importance for the existence and
perpetuation of the rise or decline of Small and medium-sized enterprises (SMEs) in the
economy of any country is to their contribution to creating new value. The rhythms alerts or
slower, sooner or later, all countries will realize that initiating, developing, supporting even
these organizations are not only unavoidable, but will lead to detect the only alternative
economically efficient creation of new jobs, maintaining permanent organizational flexibility,
stimulation of innovation and creativity (Oncioiu, 2013).Another different approach of
innovation capability is “the ability to create innovations in responding to contextual changes
and opportunities without organizational disruption, excessive time and costs, or loss of
performance”. The perception of entrepreneurs is that innovation does not only improve the
quality of products or process, but also has a positive economic return on the small enterprise.
Every firm has certain business objectives which further funnels down to operations and
purchasing sub-objectives. Therefore, every firm need to measure performance to evaluate
how far it is from the set goals. Historically, scholars view entrepreneurs in many ways, but
mainly as an innovator who is responsible for the creation of new products, new methods of
production and new processes, and who is also capable of identifying new markets
(Schumpeter, 1949). In fact, the nature of innovative process that affects enterprise survival
and economic growth revolves around the active and inactive functions of the entrepreneur.

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CHAPTER 2. INNOVATION IN AFRICA
African innovation refers specifically to innovative technologies, startups, and programs
developed by Africans for African needs and challenges. Most of the discussion around
African innovation focuses on innovations for, and on, the Sub-Saharan African continent.
2.1. History of African Innovation
Low popularity of the phrase "African Innovation" on Google Trends. Retrieved 17th
September 2018
Owing to the fact that the history of science and technology in Africa has received relatively
little attention compared to other regions of the world, despite notable African developments
in mathematics, metallurgy, architecture, and other fields, it is difficult to track how African
innovation has developed until recent times. Several efforts since the late 2000’s have begun
to track its development, especially with the emergence of the Africa Rising narrative, which
coincides with a post-colonial narrative, and larger spending by African countries into
science and technology as the continent embraces technology as a driver for development.
Realising this to be the case, the African Ministerial Conference on Science and Technology
(AMCOST) was formed in November, 2003 in Johannesburg, South Africa under the
auspices of the New Partnership for Africa’s Development (NEPAD) and the African Union
(AU). AU member states committed themselves to developing and adopting a common set of
indicators. One of its key outcomes was the adoption of NEPAD's African Science,
Technology and Innovation Indicators (ASTII) in 2005 to contribute towards a better quality
of Science, Technology and Innovation (STI) policies at the national, regional and continental
levels. The objective of ASTII was to support and strengthen the capacity of Africans to
develop and use STI Indicators in development planning and policy. It formed part of a larger
scheme called Africa’s Science and Technology Consolidated Plan of Action (CPA). The
CPA, amongst other things, aimed to build the human and institutional capacities needed to
produce common internationally comparable indicators as tools for the ongoing survey of
research and innovation at national levels.
However, the CPA came under significant criticism, as it failed to link with pan-African
policies. Furthermore, it fell short of raising the necessary funds for its implementation. In
2014, it was replaced by the Science, Technology and Innovation Strategy for Africa
(STISA) 2024, which prioritises research for driving economic and social development across
the continent. Each signatory must agree to six priorities:
1. Eradicate hunger and ensure food and nutrition security;
2. Prevent and Control Diseases and ensure Well-being;
3. Communication (Physical & Intellectual Mobility);
4. Protect our Space;
5. Live Together - Build the Society;
6. Create wealth. Critics have stated that STISA’s top-down approach is not detailed
enough and low on commitment, even if an improvement on CPA.
In 2016, the publication Disrupt-Africa launched a data branch to measure the development
of the African tech and entrepreneurship space.

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2.2. Key Examples of African Innovation
One of the most successful examples of African innovation involves the use of mobile
money, particularly Kenya’s M-Pesa, operated by the telecommunications provider,
Safaricom, which is (’pesa’ is Swahili for ‘money’). Originally established in 2007, it has
evolved to have 27.8 million active subscribers (2018), in a nation of 45 million people.
Through the service, subscribers can transfer money to each other, pay for a taxi, pay duties
on import shipments, pay school fees, and more. Google has also integrated it into its app
store as a method of payment. It reaches across all levels of income and is often used by
urban migrants for transferring money to their home village. M-Pesa has increased its reach
into Tanzania, Nigeria, Angola, Albania, the Democratic Republic of Congo, Egypt, Ghana,
Lesotho, Mozambique, Romania, and India.
Another example would be M-Kopa, which effectively provides a ‘pay as you go’ solar
power service, and is also based in Kenya. Through micro-payments using the M-Pesa
service, people who live in rural areas far away from power infrastructure can pay off a solar
panel, usually over a year, and then enjoy basic, free solar electricity. Not only is this more
financially viable, but it is better for the environment and the health of users, who
traditionally would use kerosene lamps (which has harmful fumes).
IrokoTV is another example of an African innovation. IrokoTV is a movie streaming service
that focuses on providing and producing Nollywood titles across the world, tapping into an
otherwise ignored market. The development of iRokoTV has helped to grow the Nollywood
industry quite substantially and make it a big player in the wider movie scene.
Many African innovations have been exported out of the continent. For example, Ushahidi’s
crowdsourcing tools; and Andela, a global engineering organisation that was originally based
in Lagos, Nigeria but moved its base of operations to New York in 2016, after receiving
funding from the Chan-Zuckerberg Initiative.
2.3. Key Players in the African Innovation Space
Some key players include the African Innovation Foundation (AIF), which aims to increase
the prosperity of Africans by catalyzing the innovation spirit in Africa. It boldly claims that it
wants to see needs-based innovation and change happen. As part of this it developed the
Innovation Prize for Africa in 2011, an annual award that offers a grand prize of US$185,000
and has a network of more than 8,000 African innovators spanning 55 countries.
The World Economic Forum (WEF) has frequently focused on African innovation, as part of
its research and annual regional meeting in an African country.
Other key players would be the many innovation hubs around the continent, particularly in
Kigali’s Innovation City, located in Kigali, Rwanda; “Yabacon Valley” in Nigeria; and Cape
Town in South Africa.
The African Leadership Academy (ALA) has been at the forefront of developing leaders in
Africa from a High School age. Students, with the academy, formed social innovation camps
in 2014 in an effort to provide opportunities for young students from underprivileged
neighbourhoods to identify needs in their communities, learn the tools for effective
entrepreneurship and develop ideas and solutions to address those community challenges.

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2.4. The future of innovation in Africa
In 2015, the United Nations (UN) released its “World Population Prospects” report, which
highlighted the exponential growth of the African continent, with 1.3 billion people projected
to be added to the continent between 2015 and 2050. Along with this, much discussion has
resolved around the African workforce, with predictions saying that by 2030, Africa will
have the largest working population in the world.
This is an important factor for African innovation, because such a workforce could either
become a liability to the world, or an advantage to the world. How African nations support
and encourage their own innovation, to help curb Africa’s challenges in education and
infrastructure, will be key in creating a positive workforce. [source: Taking on Silicon Valley
book].
2.5. Key statistics of Africa innovation
The 2020 Global Innovation Index (GII) was released in September. The study was authored
by WIPO, Cornell University and INSEAD and focused on innovation financing, against the
backdrop of the economic impact of the covid-19 pandemic. This article focuses on how
African countries performed, using trademark-related information as an indicator.
The most innovative economies on the continent are Mauritius (52ndplace), South Africa
(60th), Tunisia (65th) and Morocco (75th). The study concluded that while most countries
ranked fairly low in several indicators, such as R&D, high government reliance and
challenging business environments, the report highlighted several countries’ strengths,
including high expenditure in education (ie, Botswana and Tunisia), R&D (ie, South Africa,
Kenya and Egypt) and strong use of the IP system (ie, Kenya, Tunisia, South Africa,
Namibia, Madagascar and Morocco).
In sub-Saharan Africa, besides Mauritius and South Africa, the top innovators are Kenya
(86th), Tanzania (88th), Botswana (89th), Rwanda (91st) and Cape Verde (100th), while the
remaining 10 ranked countries scored lower than 100th place.
The study shows that sub-Saharan countries tend to perform above expectations compared to
their level of development. However, while these countries’ strengths are in their institutions,
markets and business sophistication, their weakness is in creative output.
The number of trademark applications by origin (class count) – measured by gross domestic
product based on purchasing power parity – was one of the creative outputs that the GII
evaluated. In this sphere, the top African countries are Mauritius (21st), Namibia (26th),
Madagascar (40th), Morocco (55th), Togo (60th), Cabo Verde (73rd), Kenya (74th)
Mozambique (77th) and South Africa (79th).
The report demonstrates that for Mauritius and Namibia, the volume of trademark
applications should be seen as an innovation strength, meaning that it is one of the 10
innovation indicators for that country. With regard to Madagascar and Togo, this indicator is
deemed an income group strength, meaning that the countries rank above average for their
income. On the other hand, this indicator is seen as a weakness in Zimbabwe (123rd) and
Ethiopia (126th).

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CHAPTER 3. ENTREPRENEURSHIP
3.1. Understanding the term entrepreneurship
Entrepreneurship is the creation or extraction of value. With this definition, entrepreneurship
is viewed as change, generally entailing risk beyond what is normally encountered in starting
a business, which may include other values than simply economic ones.
More narrow definitions have described entrepreneurship as the process of designing,
launching and running a new business, which is often similar to a small business, or as the
"capacity and willingness to develop, organize and manage a business venture along with any
of its risks to make a profit." The people who create these businesses are often referred to as
entrepreneurs. While definitions of entrepreneurship typically focus on the launching and
running of businesses, due to the high risks involved in launching a start-up, a significant
proportion of start-up businesses have to close due to "lack of funding, bad business
decisions, government policies, an economic crisis, lack of market demand, or a combination
of all of these."
In the field of economics, the term entrepreneur is used for an entity which has the ability to
translate inventions or technologies into products and services. In this sense, entrepreneurship
describes activities on the part of both established firms and new businesses.
3.2. History of entrepreneurship
"Entrepreneur" is a loanword from French. The word first appeared in the French dictionary
entitled DictionnaireUniversel de Commerce compiled by Jacques des Bruslons and
published in 1723. Especially in Britain, the term "adventurer" was often used to denote the
same meaning. The study of entrepreneurship reaches back to the work in the late 17th and
early 18th centuries of Irish-French economist Richard Cantillon, which was foundational to
classical economics. Cantillon defined the term first in his Essaisur la Nature du Commerce
en Général, or Essay on the Nature of Trade in General, a book William Stanley Jevons
considered the "cradle of political economy". Cantillon defined the term as a person who
pays a certain price for a product and resells it at an uncertain price, "making decisions about
obtaining and using the resources while consequently admitting the risk of enterprise".
Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources
to exploit opportunities to maximize the financial return. Cantillon emphasized the
willingness of the entrepreneur to assume the risk and to deal with uncertainty, thus he drew
attention to the function of the entrepreneur and distinguished between the function of the
entrepreneur and the owner who provided the money.
Jean-Baptiste Say also identified entrepreneurs as a driver for economic development,
emphasizing their role as one of the collecting factors of production allocating resources from
less to fields that are more productive. Both Say and Cantillon belonged to French school of
thought and known as the physiocrats.
Dating back to the time of the medieval guilds in Germany, a craftsperson required special
permission to operate as an entrepreneur, the small proof of competence
(KleinerBefähigungsnachweis), which restricted training of apprentices to craftspeople who
held a Meister certificate. This institution was introduced in 1908 after a period of so-called
freedom of trade (Gewerbefreiheit, introduced in 1871) in the German Reich. However, proof

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of competence was not required to start a business. In 1935 and in 1953, greater proof of
competence was reintroduced (GroßerBefähigungsnachweisKuhlenbeck), which required
craftspeople to obtain a Meister apprentice-training certificate before being permitted to set
up a new business.
In the Ashanti Empire20
, successful entrepreneurs who accumulated large wealth and men as
well as distinguished themselves through heroic deeds were awarded social and political
recognition by being called "Abirempon" which means big men. By the eighteenth and
nineteenth centuries AD, the appellation "Abirempon" had formalized and politicized to
embrace those who conducted trade from which the whole state benefited. The state rewarded
entrepreneurs who attained such accomplishments with Mena (elephant tail) which was the
"heraldic badge"
3.2.1. Innovation in 20th century
In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and by
other Austrian economists such as Carl Menger (1840-1921), Ludwig von Mises (1881-1973)
and Friedrich von Hayek (1899-1992). While the loan from French of the English-language
word "entrepreneur" dates to 1762, the word "entrepreneurism" dates from 1902 and the term
"entrepreneurship" also first appeared in 1902. According to Schumpeter, an entrepreneur is
willing and able to convert a new idea or invention into a successful innovation.
Entrepreneurship employs what Schumpeter called the "gale of creative destruction" to
replace in whole or in part inferior offerings across markets and industries, simultaneously
creating new products and new business models, thus creative destruction is largely
responsible for long-term economic growth. The idea that entrepreneurship leads to economic
growth is an interpretation of the residual in endogenous growth theory and as such continues
to be debated in academic economics. An alternative description by Israel Kirzner (1930- )
suggests that the majority of innovations may be incremental improvements - such as the
replacement of paper with plastic in the construction of a drinking straw - that require no
special qualities.
For Schumpeter, entrepreneurship resulted in new industries and in new combinations of
currently existing inputs. Schumpeter's initial example of this was the combination of a steam
engine and then current wagon-making technologies to produce the horseless carriage. In this
case, the innovation (i.e. the car) was transformational but did not require the development of
dramatic new technology. It did not immediately replace the horse-drawn carriage, but in
time incremental improvements reduced the cost and improved the technology, leading to the
modern auto industry. Despite Schumpeter's early 20th-century contributions, traditional
microeconomic theory did not formally consider the entrepreneur in its theoretical
frameworks (instead of assuming that resources would find each other through a price
system). In this treatment, the entrepreneur was an implied but unspecified actor, consistent
with the concept of the entrepreneur being the agent of x-efficiency.
20
The Asante Empire was an Akan empire and kingdom from 1701 to 1957, in what is now modern-day
Ghana. It expanded from Ashanti to include the Brong-Ahafo Region, Central Region, Eastern Region
and Western Region of present-day Ghana as well as some parts of Ivory Coast and Togo. Due to the
empire's military prowess, wealth, architecture, sophisticated hierarchy and culture, the Ashanti Empire
has been extensively studied and has more books written by European, primarily British authors than
any other indigenous culture of Sub-Saharan Africa.

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For Schumpeter, the entrepreneur did not bear risk: the capitalist did. Schumpeter believed
that the equilibrium was imperfect. Schumpeter (1934) demonstrated that the changing
environment continuously provides new information about the optimum allocation of
resources to enhance profitability. Some individuals acquire the new information before
others and recombine the resources to gain an entrepreneurial profit. Schumpeter was of the
opinion that entrepreneurs shift the production-possibility curve to a higher level using
innovations.
Initially, economists made the first attempt to study the entrepreneurship concept in depth.
Alfred Marshall viewed the entrepreneur as a multi-tasking capitalist and observed that in the
equilibrium of a completely competitive market there was no spot for "entrepreneurs" as
economic-activity creators.
Changes in politics and society in Russia and China the late-20th century saw a flowering of
entrepreneurial activity, producing Russian oligarchs21
and Chinese millionaires.
3.2.2. Innovation in 21st century
In the 2000s, entrepreneurship was extended from its origins in for-profit businesses to
include social entrepreneurship22
, in which business goals are sought alongside social,
environmental or humanitarian goals and even the concept of the political entrepreneur.
Entrepreneurship within an existing firm or large organization has been referred to as
intrapreneurship23
and may include corporate ventures where large entities "spin-off"
subsidiary organizations.
Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of
market opportunities by planning, organizing and deploying resources, often by innovating to
create new or improving existing products or services. In the 2000s, the term
"entrepreneurship" has been extended to include a specific mindset resulting in
entrepreneurial initiatives, e.g. in the form of social entrepreneurship, political
entrepreneurship or knowledge entrepreneurship.
According to Paul Reynolds, founder of the Global Entrepreneurship Monitor, "by the time
they reach their retirement years, half of all working men in the United States probably have
a period of self-employment of one or more years; one in four may have engaged in self-
employment for six or more years. Participating in a new business creation is a common
activity among U.S. workers over the course of their careers". In recent years,
entrepreneurship has been claimed as a major driver of economic growth in both the United
States and Western Europe.
21
Russian oligarchs are business oligarchs of the former Soviet republics who rapidly accumulated wealth
during the era of Russian privatization in the aftermath of the dissolution of the Soviet Union in the
1990s.
22
Social entrepreneurship is an approach by individuals, groups, start-up companies or entrepreneurs, in
which they develop, fund and implement solutions to social, cultural, or environmental issues. This
concept may be applied to a wide range of organizations, which vary in size, aims, and beliefs.
23
Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization.
Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking
and innovation approaches, as well as the reward and motivational techniques that are more traditionally
thought of as being the province of entrepreneurship.

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Entrepreneurial activities differ substantially depending on the type of organization and
creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to large-
scale undertakings that involve a team and which may create many jobs. Many "high value"
entrepreneurial ventures seek venture capital24
or angel funding25
(seed money) to raise
capital for building and expanding the business. Many organizations exist to support would-
be entrepreneurs, including specialized government agencies, business incubators26
(which
may be for-profit, non-profit, or operated by a college or university), startup studios, science
parks and non-governmental organizations, which include a range of organizations including
not-for-profits, charities, foundations and business advocacy groups (e.g. Chambers of
commerce). Beginning in 2008, an annual "Global Entrepreneurship Week" event aimed at
"exposing people to the benefits of entrepreneurship" and getting them to "participate in
entrepreneurial-related activities" was launched.
3.3. Perspectives on entrepreneurship
As an academic field, entrepreneurship accommodates different schools of thought. It has
been studied within disciplines such as economics, sociology and economic history. Some
view entrepreneurship as allocated to the entrepreneur. These scholars tend to focus on what
the entrepreneur does and what traits that an entrepreneur has (see for example the text under
the headings Elements below). This is sometimes referred to as the functionalistic approach
to entrepreneurship. Others deviate from the individualistic perspective to turn the spotlight
on the entrepreneurial process and immerse in the interplay between agency and context.
This approach is sometimes referred to as the procession approach, or the contextual
turn/approach to entrepreneurship.
3.4. Elements of entrepreneurship
Entrepreneurship is an act of being an entrepreneur, or "the owner or manager of a business
enterprise who, by risk and initiative, attempts to make profits". Entrepreneurs act as
managers and oversee the launch and growth of an enterprise. Entrepreneurship is the process
by which either an individual or a team identifies a business opportunity and acquires and
deploys the necessary resources required for its exploitation. Early-19th-century French
economist Jean-Baptiste Say27
provided a broad definition of entrepreneurship, saying that it
"shifts economic resources out of an area of lower and into an area of higher productivity and
greater yield". Entrepreneurs create something new, something different—they change or
transmute values. Regardless of the firm size, big or small, they can partake in
entrepreneurship opportunities. The opportunity to become an entrepreneur requires four
criteria. First, there must be opportunities or situations to recombine resources to generate
profit. Second, entrepreneurship requires differences between people, such as preferential
24
Venture capital (VC) is a form of private equity financing that is provided by venture capital firms or
funds to startups, early-stage, and emerging companies that have been deemed to have high growth
potential or which have demonstrated high growth (in terms of number of employees, annual revenue,
scale of operations, etc).
25
An individual who provides capital for a business start-up, usually in exchange for convertible debt or
ownership equity.
26
Business incubator is an organization that helps startup companies and individual entrepreneurs to
develop their businesses by providing full-scale range of services starting with management training and
office space and ending with venture capital financing.
27
Jean-Baptiste Say (5 January 1767 – 15 November 1832) was a liberal French economist and
businessman who argued in favour of competition, free trade and lifting restraints on business. He is best
known for Say's law—also known as the law of markets—which he popularized.

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21
access to certain individuals or the ability to recognize information about opportunities.
Third, taking on risk is a necessity. Fourth, the entrepreneurial process requires the
organization of people and resources.
The entrepreneur is a factor in and the study of entrepreneurship reaches back to the work of
Richard Cantillon and Adam Smith28
in the late 17th and early 18th centuries. However,
entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries
and empirically until a profound resurgence in business and economics since the late 1970s.
In the 20th century, the understanding of entrepreneurship owes much to the work of
economist Joseph Schumpeter in the 1930s and other Austrian economists such as Carl
Menger, Ludwig von Mises and Friedrich von Hayek. According to Schumpeter, an
entrepreneur is a person who is willing and able to convert a new idea or invention into a
successful innovation. Entrepreneurship employs what Schumpeter called "the gale of
creative destruction" to replace in whole or in part inferior innovations across markets and
industries, simultaneously creating new products including new business models. In this way,
creative destruction is largely responsible for the dynamism of industries and long-run
economic growth. The supposition that entrepreneurship leads to economic growth is an
interpretation of the residual in endogenous growth theory and as such is hotly debated in
academic economics. An alternative description posited by Israel Kirzner29
suggests that the
majority of innovations may be much more incremental improvements such as the
replacement of paper with plastic in the making of drinking straws.
Economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the economy
as "creative destruction" – launching innovations that simultaneously destroy old industries
while ushering in new industries and approaches. For Schumpeter, the changes and "dynamic
disequilibrium brought on by the innovating entrepreneur [were] the norm of a healthy
economy". While entrepreneurship is often associated with new, small, for-profit start-ups,
entrepreneurial behaviour can be seen in small-, medium- and large-sized firms, new and
established firms and in for-profit and not-for-profit organizations, including voluntary-sector
groups, charitable organizations and government.
Entrepreneurship may operate within an entrepreneurship ecosystem which often includes:
 Government programs and services that promote entrepreneurship and support
entrepreneurs and start-ups
 Non-governmental organizations such as small-business associations and
organizations that offer advice and mentoring to entrepreneurs (e.g. through
entrepreneurship centers or websites)
 Small-business advocacy organizations that lobby governments for increased support
for entrepreneurship programs and more small business-friendly laws and regulations
 Entrepreneurship resources and facilities (e.g. business incubators and seed
accelerators)
 Entrepreneurship education and training programs offered by schools, colleges and
universities
28
Adam Smith (1723 – 17 July 1790) was a Scottish economist, philosopher as well as a moral philosopher,
a pioneer of political economy, and a key figure during the Scottish Enlightenment, also known as ''The
Father of Economics'' or ''The Father of Capitalism''.
29
Israel Meir Kirzner (born February 13, 1930) is a British-born American economist closely identified
with the Austrian School. He is currently the most senior Austrian economist alive.

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 Financing (e.g. bank loans, venture capital financing, angel investing and government
and private foundation grants)
In the 2000s, usage of the term "entrepreneurship" expanded to include how and why some
individuals (or teams) identify opportunities, evaluate them as viable, and then decide to
exploit them. The term has also been used to discuss how people might use these
opportunities to develop new products or services, launch new firms or industries, and create
wealth. The entrepreneurial process is uncertain because opportunities can only be identified
after they have been exploited.
Entrepreneurs exhibit positive biases towards finding new possibilities and seeing unmet
market needs, and a tendency towards risk-taking that makes them more likely to exploit
business opportunities.
3.5. Relationship between small business and entrepreneurship
The term "entrepreneur" is often conflated with the term "small business" or used
interchangeably with this term. While most entrepreneurial ventures start out as a small
business, not all small businesses are entrepreneurial in the strict sense of the term. Many
small businesses are sole proprietor operations consisting solely of the owner—or they have a
small number of employees—and many of these small businesses offer an existing product,
process or service and they do not aim at growth. In contrast, entrepreneurial ventures offer
an innovative product, process or service and the entrepreneur typically aims to scale up the
company by adding employees, seeking international sales and so on, a process which is
financed by venture capital and angel investments. In this way, the term "entrepreneur" may
be more closely associated with the term "startup". Successful entrepreneurs have the ability
to lead a business in a positive direction by proper planning, to adapt to changing
environments and understand their own strengths and weakness.
3.6. Entrepreneurial behaviors
The entrepreneur is commonly seen as an innovator—a designer of new ideas and business
processes. Management skills and strong team building abilities are often perceived as
essential leadership attributes for successful entrepreneurs. Political economist Robert Reich
considers leadership, management ability and team-building to be essential qualities of an
entrepreneur.
3.6.1. Uncertainty perception and risk-taking
Theorists Frank Knight and Peter Drucker defined entrepreneurship in terms of risk-taking.
The entrepreneur is willing to put his or her career and financial security on the line and take
risks in the name of an idea, spending time as well as capital on an uncertain venture.
However, entrepreneurs often do not believe that they have taken an enormous amount of
risks because they do not perceive the level of uncertainty to be as high as other people do.
Knight classified three types of uncertainty:
 Risk, which is measurable statistically (such as the probability of drawing a red color
ball from a jar containing five red balls and five white balls)
 Ambiguity, which is hard to measure statistically (such as the probability of drawing a
red ball from a jar containing five red balls but an unknown number of white balls)

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 True uncertainty or Knightian uncertainty, which is impossible to estimate or predict
statistically (such as the probability of drawing a red ball from a jar whose contents, in
terms of numbers of coloured balls, are entirely unknown)
Entrepreneurship is often associated with true uncertainty, particularly when it involves the
creation of a novel good or service, for a market that did not previously exist, rather than
when a venture creates an incremental improvement to an existing product or service. A 2014
study at ETH Zürich found that compared with typical managers, entrepreneurs showed
higher decision-making efficiency and a stronger activation in regions of frontopolar cortex
(FPC) previously associated with explorative choice.
3.6.2. "Coachability" and advice taking
The ability of entrepreneurs to work closely with and take advice from early investors and
other partners (i.e. their coachability) has long been considered a critical factor in
entrepreneurial success. At the same time, economists have argued that entrepreneurs should
not simply act on all advice given to them, even when that advice comes from well-informed
sources, because entrepreneurs possess far deeper and richer local knowledge about their own
firm than any outsider. Indeed, measures of coachability are not actually predictive of
entrepreneurial success (e.g. measured as success in subsequent funding rounds, acquisitions,
pivots and firm survival). This research also shows that older and larger founding teams,
presumably those with more subject expertise, are less coachable than younger and smaller
founding teams.
Strategies
Strategies that entrepreneurs may use include:
 Innovation of new products, services or processes
 Continuous process improvement (CPI)
 Exploration of new business models
 Use of technology
 Use of business intelligence
 Use of economical strategics
 Development of future products and services
 Optimized talent management
 Entrepreneurial marketing strategies for interactive and innovative networking
3.7. Strategic entrepreneurship
Some scholars have constructed an operational definition of a more specific subcategory
called "Strategic Entrepreneurship". Closely tied with principles of strategic management,
this form of entrepreneurship is "concerned about growth, creating value for customers and
subsequently creating wealth for owners". A 2011 article for the Academy of Management
provided a three-step, "Input-Process-Output" model of strategic entrepreneurship. The
model's three steps entail the collection of different resources, the process of orchestrating
them in the necessary manner and the subsequent creation of competitive advantage, value
for customers, wealth and other benefits. Through the proper use of strategic
management/leadership techniques and the implementation of risk-bearing entrepreneurial

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thinking, the strategic entrepreneur is, therefore, able to align resources to create value and
wealth.
3.8. Entrepreneurship training and education
Michelacci and Schivardi are a pair of researchers who believe that identifying and
comparing the relationships between an entrepreneur's earnings and education level would
determine the rate and level of success. Their study focused on two education levels, college
degree and post-graduate degree. While Michelacci and Schivardi do not specifically
determine characteristics or traits for successful entrepreneurs, they do believe that there is a
direct relationship between education and success, noting that having a college knowledge
does contribute to advancement in the workforce.
Michelacci and Schivardi state there has been a rise in the number of self-employed people
with a baccalaureate degree. However, their findings also show that those who are self-
employed and possess a graduate degree has remained consistent throughout time at about 33
percent. They briefly mention those famous entrepreneurs like Steve Jobs and Mark
Zuckerberg who were college dropouts, but they call these cases all but exceptional as it is a
pattern that many entrepreneurs view formal education as costly, mainly because of the time
that needs to be spent on it. Michelacci and Schivardi believe that in order for an individual to
reach the full success they need to have education beyond high school. Their research shows
that the higher the education level the greater the success. The reason is that college gives
people additional skills that can be used within their business and to operate on a higher level
than someone who only "runs" it.
3.9. Entrepreneurial resources
An entrepreneurial resource is any company-owned asset that has economic value creating
capabilities. Economic value creating both tangible and intangible sources are considered as
entrepreneurial resources. Their economic value is generating activities or services through
mobilization by entrepreneurs. Entrepreneurial resources can be divided into two
fundamental categories: tangible and intangible resources.
Tangible resources are material sources such as equipment, building, furniture, land, vehicle,
machinery, stock, cash, bond and inventory that has a physical form and can be quantified.
On the contrary, intangible resources are nonphysical or more challenging to identify and
evaluate, and they possess more value creating capacity such as human resources including
skills and experience in a particular field, organizational structure of the company, brand
name, reputation, entrepreneurial networks that contribute to promotion and financial
support, know-how30
, intellectual property31
including both copyrights32
, trademarks33
and
patents34
.
30
Know-how (or knowhow, or procedural knowledge) is a term for practical knowledge on how to
accomplish something, as opposed to "know-what" (facts), "know-why" (science), or "know-who"
(communication).
31
Intellectual property (IP) is a category of property that includes intangible creations of the human
intellect. There are many types of intellectual property, and some countries recognize more than others.
The most well-known types are copyrights, patents, trademarks, and trade secrets.
32
Copyright is a type of intellectual property that gives its owner the exclusive right to make copies of a
creative work, usually for a limited time.

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3.9.1. Additional financing
Many businesses need more capital than can be provided by the owners themselves. In this
case, a range of options is available including a wide variety of private and public equity,
debt and grants. Private equity options include:
 Startup accelerators35
 Angel investors
 Venture capital investors
 Equity crowdfunding36
 Hedge funds37
Debt options open to entrepreneurs include:
 Loans from banks, financial technology companies and economic development
organizations
 Line of credit also from banks and financial technology companies
 Microcredit also known as microloans
 Merchant cash advance
 Revenue-based financing
Grant options open to entrepreneurs include:
 Equity-free accelerators
 Business plan/business pitch competitions for college entrepreneurs and others
 Small Business Innovation Research grants from the U.S. government
3.9.2. Predictors of success
Factors that may predict entrepreneurial success include the following:
Methods
 Establishing strategies for the firm, including growth and survival strategies
 Maintaining the human resources (recruiting and retaining talented employees and
executives)
 Ensuring the availability of required materials (e.g. raw resources used in
manufacturing, computer chips, etc.)
33
A trademark is a type of intellectual property consisting of a recognizable sign, design, or expression
which identifies products or services of a particular source from those of others, although trademarks
used to identify services are usually called service marks.
34
A patent is a title that gives its owner the legal right to exclude others from making, using, or selling an
invention for a limited period of years in exchange for publishing an enabling public disclosure of the
invention.
35
Startup accelerators, also known as seed accelerators, are fixed-term, cohort-based programs, that
include mentorship and educational components and culminate in a public pitch event or demo day.
36
Equity crowdfunding is the online offering of private company securities to a group of people for
investment and therefore it is a part of the capital markets.
37
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make
extensive use of more complex trading, portfolio-construction and risk management techniques in an
attempt to improve performance, such as short selling, leverage, and derivatives.

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 Ensuring that the firm has one or more unique competitive advantages
 Ensuring good organizational design, sound governance and organizational
coordination
 Congruency with the culture of the society
Market
 Business-to-business (B2B) or business-to-consumer (B2C) models can be used
 High growth market
 Target customers or markets that are untapped or missed by others
Industry
 Growing industry
 High technology impact on the industry
 High capital intensity
 Small average incumbent firm size
Team
 Large, gender-diverse and racially diverse team with a range of talents, rather than an
individual entrepreneur
 Graduate degrees
 Management experience prior to start-up
 Work experience in the start-up industry
 Employed full-time prior to new venture as opposed to unemployed
 Prior entrepreneurial experience
 Full-time involvement in the new venture
 Motivated by a range of goals, not just profit
 Number and diversity of team members' social ties and breadth of their business
networks
Company
 Written business plan
 Focus on a unified, connected product line or service line
 Competition based on a dimension other than price (e.g. quality or service)
 Early, frequent intense and well-targeted marketing
 Tight financial controls
 Sufficient start-up and growth capital
 Corporation model, not sole proprietorship
Status
 Wealth can enable an entrepreneur to cover start-up costs and deal with cash flow38
challenges
 Dominant race, ethnicity or gender in a socially stratified culture
38
A cash flow is a real or virtual movement of money.

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CHAPTER 4. ENTREPRENEURSHIP IN AFRICA
4.1. Key info graphic data
Figure 1 World billionaires per continent. Source: Bloomberg
Table 1. Global billionaires’ indicators by continents. Source: Bloomberg
Localization Percentage Number of Billionaires
World 100% 2,208
Asia 32.6% 719
North America 28.6% 631
Europe 25.3% 559
South America 3.9% 85
Oceania 1.7% 38
Africa 1.1% 25

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Table 2. Africa top 20 billionaires. Source: Bloomberg

Innovation and entrepreneurship. africa in dillema

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