Entrepreneurship is Vital to Africa’s Prosperity

“The US was built by entrepreneurs. I know Africa can be built in the same way.” I happened upon these statements while surfing the net one day and they excited me. This was because they said in a simple way a conviction I have: that a multiplicity of successful entrepreneurs across the African continent is fundamentally necessary for lifting it out of its poverty.

The material prosperity or wealth of any society depends on its economic growth. Economic growth may not take care of how the wealth is distributed but it goes without saying that it must underlie the quest for wealth creation or prosperity in any society.

One of the most outstanding works ever done into why and how nations become wealthy is Adam Smith’s ‘An Enquiry into the Nature and Causes of the Wealth of Nations’, a title usually shortened to ‘The Wealth of Nations’. In it he argued ingeniously that the true wealth of a nation was to be found in the produce of the labour of its people. The increase of this produce is what is referred to as economic growth. Robert Reich in his introduction to the book summed up Adam’s Smith’s view thus: “To him, the ‘wealth’ of a nation wasn’t determined by the size of its monarch’s treasure or the amount of gold and silver in its vaults … A nation’s wealth was to be judged by the total value of all the goods its people produced for all its people to consume.”

Entrepreneurs are at the core of economic growth. This is because they are the ones who organize production in a society. They put together the society’s resources of land, capital and labour to produce goods and services. The more entrepreneurs therefore, the more goods and services are produced. The more goods and services are produced, the more a society becomes materially prosperous. This is, however, just one aspect.

True entrepreneurs innovate. A special report on Entrepreneurship in the Economist (March 14,2009) carried this definition of an entrepreneur:someone “who offers an innovative solution to a (frequently) unrecognised) problem. The defining characteristic of entrepreneurship, then, is not the size of the company but the act of innovation.” Through the acts of innovation more value is created and by implication more prosperity. Paul Romer, a Stanford University economist put it beautifully: “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable… [It] springs from better recipes, not just more cooking.”

To alleviate poverty in Africa, we must create wealth. To create wealth, we must put our people to work. To put our people to work, we need entrepreneurs. Entrepreneurs are vital to Africa’s prosperity.

 https://dennisobeng.wordpress.com/2010/04/03/entrepreneurship-is-vital-to-africas-prosperity/