Regional Cooperation Needs To Be Based On A Comprehensive Understanding Of ‘Entrepreneurs’
As the German Society for International Cooperation (GIZ) emphasizes in one of its recent publications, “[t]he Government of Germany aims to strengthen SADC in order to promote political and economic cooperation in the region”, raise living standards and alleviate poverty in the long-term by the means of regional integration, “democratic principles and equitable and sustainable development”. The Southern African Development Community (SADC), as the publication highlights, is characterized by peace and stability – at least in comparison to other communities in the African Union (AU). Being composed of the following countries, the SADC comprises 16 member states and a population of 300 million: Angola, Botswana, Comoros, Democratic Republic of the Congo, Eswatini (Swaziland), Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, the United Republic of Tanzania, Zambia, and Zimbabwe.
Whereas one might assume that the promotion of bilateral trade through Germany’s regional cooperation with the SADC will indeed lead to “support [ing] the socially disadvantaged”, this narrative might benefit from being further explored by the means of recent research, especially with regard to the difference in promoting bilateral trade and entrepreneurship. As Maud Victoria Hutchinson argues in her doctoral thesis at the University of Kwazulu-Natal, research sometimes perpetuates “‘an inaccurate and romanticized view of who entrepreneurs are’” and entrepreneurship discourses in textbooks as well as in global entrepreneurship literature, at least in some cases, promotes a few one-sided ideologies about entrepreneurship. Embedding the latter in a neoliberalist and capitalistic ideology, so Hutchinson continues, the idea that entrepreneurial success is linked to “the maximization of entrepreneurial freedoms” is born. As the consequence of further generalizations rather than in-depth research, it is then often concluded that self-fulfillment, free trade, entrepreneurial success, the alleviation of poverty and the lifting of economies from their demise all go hand in hand without respect for local circumstances, which may require a little adaption in public, economic and social policies as well as various types of law and regulations (i.e. IIL, regulations that relate to bilateral trade and mobility such as the AU Free Movement of Persons Protocol).
Following Hutchinson further extensive research efforts are needed to investigate whether there is really always a positive relation between entrepreneurship and economic growth. Building her argument on regional research efforts, Hutchinson reminds that SMEs in Brazil did not benefit from economic growth between 1985 and 2004. Other studies, which Hutchinson mentions, have proven that there is in some cases a positive relationship between “export-oriented early-stage entrepreneurship” and economic growth in high-income countries. A few questions, which might need to be asked and explored in current and regional contexts are: 1.) Where does economic growth hinder the success of different kinds of entrepreneurial activity and why?, 2.) What potential role do start-up ecosystems, institutions and other stakeholders play in the equation entrepreneurial success equals economic growth?; 3.) What beneficial (socio-)economic impacts can entrepreneurial activity have in the absence of economic growth? As the latter questions hint, the definition of economic growth is still contested anyways. What specifically matters, when it comes to the representation of ‘entrepreneurs’ – is to understand who they actually are and this can arguably be done by exploring the impacts, which they make.
If you were reading this article expecting to hear about bilateral trade between the SADC and Germany only, then you may ask – but why does ‘representation’ matter? The answer is simple. In order to effectively support entrepreneurs in the SADC, it needs to be understood who they are. Some of them may actually have no idea about international trade and be more interested in contributing to local impacts. Others may have chosen the profession of an ‘entrepreneur’ just like any other job or as a ‘survival strategy’. As the GIZ publication reveals, “60% of SADC residents still live under the poverty line of USD 1.90 per day”, whereby the livelihoods of fishing communities were pointed out to be some of the most vulnerable by an article as part of the FAO Aquaculture Newsletter. In order to both redirect international investments to support different types of ‘entrepreneurs’ and promote tailor-made efforts to boost human capital development, it might arguably be more important to explore where entrepreneurial activity has positive impacts on poverty reduction than economic growth.
Overall, it can be said that there is not one particular type of ‘entrepreneur’. However, there are various discourses about what entrepreneurship is and these discourses have inevitably informed policy-making, which is biased towards the ‘grand narrative’ of a thriving bilateral trade. Arguably, this is also mirrored in the failure of the SADC to fully ratify the AU Free Movement of Persons Protocol. As Victor Amadi, Postdoctoral Fellow at the Centre for Comparative Law in Africa at the University of Capetown, and Patricia Lenaghan, Associate Professor of International Trade Law, Regional Integration and Development at the University of the Western Cape, stipulate, in order to forge stronger regional ties, an emerging pan-African identity and the AU Agenda 63, the SADC should work on less restrictive policies, when it comes to free movement and the mobility of persons. Lastly, international business and entrepreneurship do not only serve to lift economies from their demise and so, the ‘human’ aspect of entrepreneurship should not be erased, especially when sustainable and inclusive development are at the core of the AU Agenda 63 and the German regional cooperation with the SADC. But how is this ‘human’ aspect erased precisely?
In short, the answer is through the one-sided representation of ‘entrepreneurs’. Whereas the afore-mentioned ‘grand narrative’ may succeed in motivating international investors to jump on board and invest in Africa, policies should always take into account where trade expansion and overall entrepreneurial success clash. Different types of entrepreneurs (i.e. micro entrepreneurs, business entrepreneurs, trading entrepreneurs, industrial entrepreneurs etc.) should be identified across local and regional contexts to better understand the impacts they create and intend to make. This may also lead to better understanding their particular support needs and analyzing the ultimate impact they could have on their own as well as the livelihoods of local, and where applicable international, communities. While the latter is not to discourage the ‘grand narrative’ of Africa as an emerging and powerful player in international business, entrepreneurship and development, nor to propose that (inter)regional policy-making efforts lack a view for minority and, especially, micro entrepreneurs, it is to remind of the importance to put international trade and investments in perspective.
As a publication from the SADC International Conference on Poverty and Development ‘Regional Economic Integration: A Strategy for Poverty Eradication Towards Sustainable Development’ from 2008 states, “SME Development should be seen as a means of promoting expansion of local entrepreneurs and private sector in the SADC economies” – and so, should in recent times, the promotion of a ‘intercontinental and global entrepreneurship’. With the Economic Partnership Agreement between the EU and the SADC putting an emphasis on enabling duty-free and quota-free access to the EU market, aiming to achieve an economic diversification, it becomes ever more important to address how the success of the ‘grand narrative’ of entrepreneurship and its revenue, will be redistributed to fund local businesses, which may not have an interest in scaling up or being embedded in larger networks and value chains. Entrepreneurship should not only be a feasible option for African business aficionados who aim big, it should also be a legitimate career choice for local experts and business aficionados. This being said, scaling up African businesses will surely lead to the creation of employment opportunities within the broader domain of entrepreneurship. What could be discussed in this regard may also be how more flexible forms of employment could be created within such communities.
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