Comments Zoltan Acs, “How Is Entrepeneurship Good For Growth?” in light of “What Are We Doing Here?” documentary

Acs argues that necessity entrepreneurship has no effect on economic development while opportunity entrepreneurship has a positive and significant effect. This finding, he suggests, tells us something important about the role of entrepreneurship in relation to the national economic growth for less developed countries–namely that “[l]ess developed countries need to strengthen their small and medium sized [business] sector[] before focusing on the entrepreneurial framework conditions.” (104). This same conclusion was implicitly put forth in “What Are We Doing Here?” when the economist-turned-farmer suggests that the key to rising out of poverty is supporting enterprises that can hire and pay wages (as opposed to the “necessity entrepreneurship” discussed in Acs and demonstrated by the tomato selling women in the aforementioned film). While this argument makes sense on its face, it also appears to be made inside a vacuum. By this I mean that necessity entrepreneurship may not appear to have any effect on economic development because external factors—such as poor governance, no government safety nets, lack of business training, etc.—do not allow for the “necessity” to turn into “opportunity.” More importantly, necessity entrepreneurship may provide training and business experience that can be translated into opportunity entrepreneurship, or simply worker productivity, when the governance and business climate becomes hospitable for such enterprises. Accordingly, I do not think that the least developed countries (or at least the global civil society and IOs seeking to help them) should stop focusing on entrepreneurial framework conditions as Arc implicitly (if not explicitly suggests)—even if it means supporting necessity entrepreneurship.

As alluded to above, I fundamentally disagree with the proposition that necessity entrepreneurship does not play a positive role in the least developed countries. Anyone who has spent time studying the history of economic development (or lack thereof) on the African continent knows that the framework for supporting “opportunity entrepreneurship” and small-and-medium sized businesses is wanting in many, if not most, AU countries. Neopatriamonialism, the legacy of colonialism, government corruption, civil war, ethnic conflicts, and the absence of the rule of law make the type of entrepreneurship–and supporting framework—that Acs speaks of a luxury in such places. While Acs does acknowledge this briefly on page 104, the filmmakers of “What Are We Doing Here” seem to ignore this fact and instead point out “all that is wrong” with foreign aid without acknowledging the unique historical background that complicates development throughout many African countries: Yes, it would be lovely if the least developed countries could enhance their SME infrastructure. The reality is, however, that the “good governance” reforms promulgated by the World Bank and IMF need to “stick” before such economic reforms will really have an effect on the economy. Until then, necessity entrepreneurship (supported by the West through platforms such as USAID, DFID, WFP, Kiva, etc.) must continue to play a role in local economies. I agree with Acs’ argument that countries relying on necessity entrepreneurship will not be able to lift themselves up by their bootstraps; I do not agree, however, that necessity entrepreneurship has no effect on economic development. At the very least, such entrepreneurship gives aid in a productive way and teaching way until the necessary macro-level governance and structural features are implemented.

On a side note/comment about the documentary, “What Are We Doing Here” does, in my view, do nothing to contribute to the dialogue on aid and development. The shortcomings and/or corruptive effects of foreign aid in Africa are well documented. In fact, I found the filmmakers ignorance almost offensive at various parts—everything they “learned” on their trip was available to them beforehand (Westerns have been on the African continent since…well, we all know about colonialism…). Granted, nothing teaches or influences as well as firsthand experiences, but I do feel like the documentary would have actually contributed something to the discussion had they been able to provide an informed commentary on the situations they encountered on the road. Instead, the movie ends just as it begins…musing about why we are in Africa. No suggestions, agenda, etc. are offered.

Comments are closed.