Entrepreneurship in Africa: Identifying the Frontier of Impactful Research

Abstract

This review summarizes literature covering entrepreneurship research in Africa, examining 121 articles published in prominent entrepreneurship and management journals from 2002 to 2015. To do so, this research organizes the work done along three broad themes describing: the African entrepreneur, the entrepreneurial firm, and macro socio-economic conditions. Within this framework, the review examines entrepreneurial attributes with regard to gender, age, education, and work behavior. The topics explored that are relevant to the entrepreneurial firm include organizational forms (e.g., SMEs and family businesses), financial and social capital, as well as the informal economy. Macro socio-economic conditions with respect to the various circumstances African entrepreneurs are subject to are then considered. Issues typical to Africa concerning poverty, corruption, internationalization, and environmental concerns are also examined. In an effort to facilitate future work, this research highlights knowledge gaps concerning the theoretical nature of most of work done, which has primarily been focused within Anglophone African countries. This review concludes by considering what needs to be done to improve the quality of entrepreneurship studies within the African context.

Keywords:

• entrepreneurship review
• entrepreneurial firm
• SME
• family business
• informal sector
• African context

INTRODUCTION

Entrepreneurship in Africa is considered a means by which the African population can foster country development and alleviate poverty (Ortmans, 2015). As it happens, sub-Saharan Africa contains the highest number of individuals engaged in nascent entrepreneurship (14.1%) or early stage entrepreneurial activity (26%) in the world (Global Entrepreneurship Monitor, 2015). Also fascinating is the recognition that Africa leads the world with the highest participation rates of women in early stage entrepreneurial activity (24.6%), with the next highest occurring in Latin America (16.1%) (Global Entrepreneurship Monitor, 2015). Despite steady growth in gross domestic product (GDP) and an increase in entrepreneurship rates, overall GDP by country in Africa remains among the lowest relative to other regions of the world (World Bank, 2013). Against this backdrop, academic interest with regard to entrepreneurship in Africa has been increasing (e.g., Rivera-Santos, Holt, Littlewood, and Kolk, 2015; Khayesi, George, and Antonakis, 2014; Daspit and Long, 2014). However, to the best of the authors’ knowledge, there has been no attempt at a review of this literature since a Journal of Developmental Entrepreneurship review piece by Kiggundu (2002a) nearly 15 years ago. In recognition of this need, this review aims to systematically summarize the current state of the African entrepreneurship literature.

Entrepreneurship is defined as, “the scholarly examination of how, by whom, and with what effects opportunities to create future goods and services are discovered, evaluated, and exploited” (Shane and Venkataraman, 2000: 218). In Africa, entrepreneurship is examined amidst the individual entrepreneur, small and medium enterprises (SMEs), and family businesses, as well as within the informal and formal sectors of the economy, among other forms (Kiggundu, 2002a). Although there have been various initiatives to encourage research in Africa, including the establishment of the Global Entrepreneurship Monitor (GEM) in 1999, the majority of entrepreneurship research takes place within a U.S. context (Terjesen, Hessels, and Li, 2016). Perhaps one of the greatest impediments to scientific inquiry regarding entrepreneurship in Africa is the lack of access to the frontiers of recent research. As such, it is partly the aim of this review to facilitate inquiry across the African continent. However, this review is not meant to be exhaustive, but rather descriptive of extant work. This review still contains gaps, but it provides researchers with a renewed base for exploring the entrepreneurship literature in Africa. In keeping with this purpose, this review points to the need for developing theoretically and empirically rich studies as a path toward better understanding entrepreneurship in Africa.

The remainder of this paper is organized as follows. In the next section, the systematic review process is summarized and the theoretical, empirical, and geographical nature of the work being published is detailed. This review then describes extant research along the three broad themes of the African entrepreneur, the entrepreneurial firm, and macro socio-economic conditions. In the last sections, directions for future research are discussed.

STATE OF AFRICAN ENTREPRENEURSHIP RESEARCH

Article Identification

This review aims to examine the management literature and identify impactful entrepreneurship research in the African context at the individual, firm, and environmental level. To do so, searches were conducted employing a systematic review process (e.g., Tranfield, Denyer, and Smart, 2003; Rauch and Frese, 2007; Terjesen et al., 2016), using the Thomson Reuters Web of Science, ProQuest, Academic Search Complete, and Business Source Complete databases. The databases were searched using the following keywords: entrepreneur, entrepreneurs, entrepreneurial, entrepreneurship, small business, family business, informal sector, intrapreneur, intrapreneurship, new firm, new ventures, venture, venturing, spin-off/spinoff, start-up/startup, along with the keyword Africa within the time frame 2002 to 2015. As a result, the entrepreneurship literature reviewed herein this article is inclusive of many areas of research. Since this review was primarily intended to identify high quality empirical and theoretical work in management related journals, our results were kept limited to impactful journals. However, ProQuest was used to identify any relevant dissertations and this review also includes work that is more phenomenologically driven.

In the interest of ensuring that no relevant articles were missed, separate searches were conducted in top entrepreneurship and management journals. In executing this, searches were done in Journal of Business Venturing, Entrepreneurship Theory & Practice (ET&P), Journal of Small Business Management (JSBM), Small Business Economics (SBE), Journal of Developmental Entrepreneurship (JDE), World Development (WD), Journal of International Business Studies (JIBS), Journal of Management (JOM), Academy of Management Journal (AMJ), and Strategic Management Journal (SMJ), which are the same journals that contribute much of the final sample. From these searches, 121 articles published in prominent entrepreneurship and management journals from 2002 to 2015 were identified for inclusion. In the next section, key descriptives of the sample with regard to the journal outlets and various metrics of the studies are explored, including their composition, theoretical perspectives, methodologies used, and regions studied.

Journal Coverage

The journals that were identified as publishing the most research involving entrepreneurship in Africa are WD, JDE, SBE, ET&P, and JSBM. Only occasional pieces occurred in SMJ or JIBS, suggesting that the majority of research regarding entrepreneurship in Africa appears in entrepreneurship journals or on the fringe of mainstream management journals. While this is also generally true for entrepreneurship research (Keupp and Gassmann, 2009; Shane, 2012), it also points to Africa as an understudied research context. It may also point to the possibility that unlike in the U.S. and Europe, entrepreneurship research in Africa has not yet been mainstreamed (Fayolle and Riot, 2015).

Overview of Reviewed Research

The general levels of analysis studied across the African entrepreneurship literature are depicted in Table 1 (e.g., the entrepreneur, the firm, and the environment) with findings represented according to the attributes, antecedents, and outcomes of the levels being explored (e.g., Terjesen et al., 2016). At the individual level (e.g., the entrepreneur), minority, women, and youth entrepreneurs, and personality attributes are of common interest. At the firm level, topics include small and medium enterprises, and family businesses, as well as types of firms, including informal and socially oriented ventures. In the external environment, poverty, corruption, internationalization, and environmental concerns are of particular interest. Table 1 helps to more concisely articulate the characteristics and research questions that are being explored within each level of analysis. While some topics exist across levels of analysis (e.g., social networks), other topics are examined exclusive to specific levels of analysis (e.g., psychological traits, country infrastructure). The sampling of research questions along with the theoretical perspectives referenced in the table help to clarify the type of inquiry that has taken place at each level of analysis. We notice that despite reviewing over a decade of recent research, African entrepreneurship still appears in its early stages. Also observed is that not much research has utilized multi-level approaches to exploring entrepreneurship in the African context. Table 2 further details the landscape of the research, listing the number of studies (out of the total 121) that each methodological positioning (e.g., qualitative, quantitative, and mixed-method) accounted for across levels of analysis (e.g., entrepreneur, firm, and the environment). Study year and level of analysis are separate categories and are not mutually exclusive in order to depict the timeline and level of analysis for each of the methods. Furthermore, phenomenological stands apart from the other categories as its ‘method’ to describe how much published research is lacking theory. Lastly, Table 3 classifies the studies reviewed according to subcontinental regions with a special category that indicates the number of studies conducted in francophone countries. The categories are not mutually exclusive since many studies use multi-country samples.

Table 1. Research Article Contents.

	Entrepreneur	Firm	Environment
Attributes	Psychological traits (e.g., cognitive abilities, locus of control, self-efficacy), education, gender, age, prior experience, entrepreneur type (e.g., informal, diaspora, family business), social networks	Business type (e.g., informal, diaspora, family business, social ventures, international), size, social networks, financing, management practices	Infrastructure, culture, government stability, regulation, rule of law, government services
Research Questions	How does motivation affect business success? How do goal intentions and positive fantasies affect new venture creation? How should female leaders be developed? Are metrics used to measure entrepreneurship related constructs biased against women?	Are informal ventures exploiting child labor? Does early internationalization help legitimacy? What characteristics of sibling teams affect business success? Are small firms credit constrained? Does network embeddedness constrain nonprofit firms?	Has Africa fostered development? What is the role of government? Are property rights properly enforced? How can Africa better facilitate innovation? How can government services be better managed? What type of challenges does the African context pose?
Sample Citations	Frese et al. 2007; Gielnik et al. 2014; Bullough et al. 2015; Dawa and Namatovu, 2015	Webbink et al. 2012; Wood et al. 2011; Farrington et al. 2012; Vandenberg, 2003; Kistruck and Beamish, 2010	Frese and Friedrich, 2002; Watkins, 2007; Brown, 2015; Agbo et al. 2008; Sievers and Vandenberg, 2007; Murisa and Chikweche, 2013
Antecedents	Education, gender, age, prior experience, entrepreneur type (e.g., informal, diaspora, family business), social networks	Size, social networks, financing, organizational form (e.g., IJV)	Economic freedom, financing, entry mode, social networks
Research Questions	How does prior business experience influence the ability to introduce new innovations? How does education and drive affect performance? Do female entrepreneurs have trouble securing financing? How do family networks affect business and growth?	Are small firms less likely to use government services? How do network ties affect internationalization? What type of effect does capital have on business success in the short and long term? How do joint ventures with large multinationals affect status?	How does economic freedom affect the survival of foreign enterprises in Africa? How does capital availability affect small business startup rates? Can alternative forms of entry be used to overcome market inefficiencies? How does FDI affect entrepreneurial activity? How do diaspora networks affect entrepreneurship?
Sample Citations	Unger et al. 2009; Robson et al. 2012; Welsh et al. 2013; Khavul et al. 2009	Obeng and Blundel, 2015; Gimede, 2004; Karlan et al. 2015; Hearn, 2015	Demirbag, Apaydin, and Tatoglu, 2011; Pretes, 2002; Meyer et al. 2009; Washington and Chapman, 2014; Kshetri, 2013
Outcomes	Work/life balance, improving infrastructure, corruption	CSR, corruption, financial performance, growth, survival, business formalization	Employment growth, new business creation, CSR, income inequality
Research Questions	How do female entrepreneurs achieve work/life balance and how does this affect their children? What are some of the outcomes of social entrepreneurs’ activities? Do entrepreneurs contribute to corruption or are they victims of it?	Do small firms understand corporate social responsibility? How does competition drive informal entrepreneurs to formalize? How do firm characteristics affect incidence and intensity of performance?	How does economic growth and regulation affect employment? How important are deregulation and political stability for new business development? Does FDI improve CSR conditions? Does entrepreneurship affect income inequality?
Sample Citations	Schindehutte et al. 2003; Nelson et al. 2013; Ufere et al. 2012	Liedholm, 2002; Demuijnck and Ngnodjom, 2013; Sonobe et al. 2011; Masakure et al. 2008	Mahadea, 2012; Munemo, 2012; Bardy et al. 2012; Kimhi, 2010
Theoretical Perspectives	Resource based view, Social capital theory, learning theory	Institutional theory, social capital theory, agency theory	Institutional theory, social capital theory

Table 2. Research by Different Approaches and Time Frame.

	Level of Analysis			Study Year
Method	Entrepreneur	Firm	Environment	2002−2006	2007−2011	2012−2015
Quantitative	18	40	17	13	25	37
Qualitative	14	11	16	5	17	19
Mixed-method	2	1	2	1	2	2
Phenomenological	20	29	27	16	27	33

Note: Studies are classified according to level of analysis and general methodological positioning of the research. Level of analysis and study year groupings are not mutually exclusive. Phenomenological is used as a separate category to describe how many studies in Africa lack theory.

Table 3. Research by Region.

	North Africa	East Africa	Southern Africa	West Africa	Francophone
Number of Studies	40	56	72	62	41

Note: Categories are not mutually exclusive since some studies were conducted across regions in addition to within region. North Africa is the northern part of the continent, excluding sub-Saharan Africa. East Africa is used to refer to the countries of Kenya, Tanzania, and Uganda. Southern Africa is inclusive of Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia, and Zimbabwe. West Africa refers to the western subcontinent of Africa, excluding the Maghreb (formerly known as the Barbary Coast). Francophone indicates the number of studies in the sample that were conducted in predominantly French language countries.

Theoretical Perspectives

The majority of the entrepreneurship research conducted in Africa is lacking theoretical development and is mostly phenomenological (See Table 2). However, among the studies that utilize specific theories, social capital theory, resource based theory (RBT), and institutional theory are most prevalent (See Table 1).

Methodologies

The studies reviewed show that a myriad of data collection methods and analytic techniques have been used. Collection methods include case studies (Wheeler, McKague, Thomson, Davies, Medalye, and Prada, 2005), questionnaires (Khayesi, George, and Antonakis, 2014; Daspit and Long, 2014), interviews (Robinson, Davidsson, Mescht, and Court, 2007), experiments (Glaub, Frese, Fischer, and Hoppe, 2014), and archival data (Acquaah, 2009). While most of the research conducted was quantitative in nature, a number of studies were qualitative, with some employing mixed methods (see Table 2). Data analytic techniques commonly included ordinarily least squares (OLS) regression (Woodward, Rolfe, Ligthelm, and Guimaraes, 2011), with probit and logit models also being utilized (Robson, Akuetteh, Westhead, and Wright, 2012; Grimm, Knoringa, and Lay, 2012). For example, Amin and Islam (2015) used OLS regression to analyze World Bank surveys in a study examining labor productivity between large and small informal firms. Khavul, Perez-Nordtvedt, and Wood (2010) employed hierarchical moderated regression to examine the internationalization behavior of international new ventures (INVs). And Robson and Obeng (2008) used ordered logit models to examine entrepreneurs’ barriers to growth in Ghana.

Regions

In the studies examined for this review, every region of Africa is included (See Table 3). The large majority of work conducted covers sub-Saharan Africa and mostly anglophone countries. Few studies exclusively examined francophone countries, with the inclusion of these countries mostly segmented to multi-country samples. This may be due to language differences since the review did not include publications in French. Language limitations may also apply to North Africa where the dominant languages are Arabic and French rather than English. Across the regions, southern Africa receives the most attention, due in large part to South Africa’s developing economy (World Bank, 2013). Table 3 brings attention to the need for more research involving northern Africa as well as francophone Africa. Currently, there is little literature suggesting meaningful differences between African regions as opposed to Africa as a whole (e.g., Asiedu, 2002), in terms of entrepreneurship. Since regional integration is an important consideration (e.g., Foroutan, 1992; Kiggundu and Deghetto, 2015), research examining regional differences in entrepreneurship is warranted.

AFRICAN ENTREPRENEURS

Individual level research accounted for 28% of the studies examined in this review. Examining entrepreneurship at the individual level often entails ways in which entrepreneurs differ in terms of personality, thought processes, education, prior experience, and other individual characteristics. African entrepreneurship research follows these same themes, but also gives due consideration to groups of entrepreneurs that are particularly critical to their countries’ developing infrastructures (e.g., women and diaspora entrepreneurs).

Marginalized Entrepreneurs

Across all levels of analysis, studies often examine categories of entrepreneurs (e.g., women, youth, diaspora). Given the inequality that the institutional frameworks in Africa sometimes facilitate (Seekings and Nattrass, 2008), inquiry into disadvantaged classes of society is warranted. Although entrepreneurship among females is prevalent and young people are relatively overrepresented in Africa, both groups remain marginalized (Brixiová, Ncube, and Bicaba, 2015).

Women

Studies have sought to identify how so many women remain engaged and persist in entrepreneurship despite the vast amount of challenges (Adom and Williams, 2012; Yusuff, 2013). Unfair treatment is represented in the unequal rights conferred to women both socially (Manuh, 1998) and legally (Lastarria-Cornhiel, 1997; Yusuff, 2013). Female entrepreneurs must contend with limited property rights and in many ways need to be more savvy than their male counterparts to remain competitive. The literature supports this contention and recognizes that while women entrepreneurs are disadvantaged, there is untapped potential for women to act in an even more critical role for economic development (Adom, 2015).

Recognizing the amplified challenges female entrepreneurs encounter, research reveals that personal issues, management skills, and financing serve as impediments to women entrepreneurs (Welsh, Memili, Kaciak, and Ahmed 2013). Even further, women interviewed also report experiencing gender discrimination with regard to government policy, customary laws, access to financing (Asiedu, Kalonda-Kanyama, Ndikumana, and Nti-Addae 2013), and bureaucratic hurdles (Chea, 2008). Some findings are more controversial, with the suggestion that male ownership matters in terms of work productivity (e.g., Woodward, Rolfe, Ligthelm, and, Guimaraes, 2011), that males plan more than females (Yusuf and Saffu, 2005), and that sons rather than daughters benefit more coming from a family background of entrepreneurship (Aterido and Hallward-Driemeier, 2011). However, given the exceptional entrepreneurship rates among African women, there are a number of factors to their benefit and a lot left unsaid about their ability to persevere.

For example, studies have found that women are more innovative than men (Aterido, Beck, and Iacovone, 2013; Chea, 2008) and use external financing less because they often choose to enter sectors where there is less need for capital access (Aterido et al., 2013). Women are able to prevail by gaining support through education, prior work experience, and their families (Welsh et al., 2013; Otoo, Fulton, Ibro, and Lowenberg-Deboer, 2011). On this point, women often engage in entrepreneurship because they are necessity driven and need to provide for their families, although they have become more opportunity driven over time (Adom and Williams, 2012). Indeed, necessity and opportunity are not mutually exclusive. For example, Njoroge (2015) chronicled starting his data recovery services business in Kenya out of necessity when his computer crashed in his final year of university and then building it into a growing business concern operating in East Africa with gross revenue of over US$1 million and 70 employees. Moreover, the impact on the children of entrepreneurial mothers is reported to be a positive one, as women serve as role models and provide their children with a blueprint of entrepreneurial behavior (Schindehutte, Morris, and Brennan, 2003). Women are also able to leverage their social networking abilities and use these skills to grow their businesses (Dawa and Namatovu, 2015; Chea, 2008). In keeping with this advantage, network marketing is one such avenue that has proved beneficial to African women, as Avon¹ gives impoverished women a detailed framework for success and a subsequent opportunity at a better income (Scott, Dolan, Johnstone-Louis, Sugden, and Wu, 2012). In sum, women have proven themselves quite competent with regard to entrepreneurship, but it also recognized that training is necessary to facilitate their development into entrepreneurial leaders (Bullough, de Luque, Abdelzaher, and Heim, 2015).

Youth

Withstanding the fact that Africa has the greatest number of individuals aged between 15 and 24 in the world (African Economic Outlook, 2012), unemployment among African youth is in excess of 60%. As a result of the high unemployment among young Africans, entrepreneurship is viewed as a means to empower youth and foster development (Williams and Hovorka, 2013). In this endeavor, young entrepreneurs face a number of obstacles, as their social class, education, and family backgrounds bear on their ability to identify and act on opportunities (Beeka and Rimmington, 2011). Also, young entrepreneurs often lack the skills to succeed in entrepreneurship, and particularly struggle to identify worthwhile opportunities (Brixiová, Ncube, and Bicaba, 2015; Beeka and Rimmington, 2011). Since there is little opportunity provided to this group with regard to training and support, this proves detrimental (Brixiová et al., 2015). Research shows that employment and self-employment prospects increase dramatically with education and training (Calves and Schoumaker, 2004; Williams and Hovorka, 2013). Furthermore, that African youth would be well-served with access to training that caters to improving their intuition and entrepreneurial mindsets (Beeka and Rimmington, 2011; Brixiová et al., 2015).

Education

Education along with training and development is viewed as a means to alleviate poverty and unemployment with regard to youth and as a way to empower each country to overcome developmental hurdles (Watkins, 2013). Access to education and professional development can equip Africans with the skillset to identify opportunities, innovate, grow their businesses, and ultimately increase performance (Robson, Haugh, and Obeng, 2009; Unger, Keith, Hilling, Gielnik, and Frese, 2009). Robson and Obeng (2008) even demonstrated the importance of education above that of gender and age in predicting the likelihood of prevailing against business barriers, with education being valuable to success. While the literature in this area appears to be at a consensus toward the positive effects of education on entrepreneurship (e.g., Robson et al., 2009; Unger et al., 2009), some work has also considered potentiality detrimental effects of entrepreneurship education (De Clercq, Lim, and Oh, 2014), with some studies suggesting that education may deter individuals from certain cultures (De Clercq, Lim, and Oh, 2014). More specifically, entrepreneurship education may make individuals more aware of the associated risks that self-employment carries, which may in turn funnel individuals from a conservative background into more stable career options (De Clercq et al., 2014).

Behavior and Personality Attributes

The ways in which entrepreneurs differ from other individuals is a topic of frequent interest to academics (e.g., McGrath, MacMillan, and Scheinberg, 1992; Busenitz and Barney, 1997). Seeking what makes successful entrepreneurs different from the rest, scholars have found significant relationships for such traits as self-efficacy, motivation, locus of control, initiative, cognitive ability, human capital, and proactive planning (Escher, Grabarkiewicz, Frese, van Steekelenburg, Lauw, and Friedrich, 2002; Krauss, Frese, Friedrich, and Unger, 2005; Frese et al., 2007; Urban 2008). Planning and good health have also been positively linked to new venture creation (Chao, Szrek, Pereira, and Pauly, 2010; Gielnik et al., 2014). In a study by Urban (2008), entrepreneurial self-efficacy emerged as more important than culture in predicting entrepreneurial intentions, suggesting that entrepreneurial behavior is more indicative of individual traits as opposed to cultural values. Entrepreneurs use these skillsets to solve everyday career challenges along with the ethical dilemmas that face them on a daily basis (Robinson, Davidsson, Mescht, and Court 2007). From these studies reviewed, it is clear that entrepreneurs possess different traits and skillsets than non-entrepreneurs (Frese et al., 2007), have a greater tolerance for risk and are more oriented toward and for an entrepreneurial mindset (Krauss, Frese, Friedrich, and Unger, 2005; Urban, 2008). Even further, evidence suggests that entrepreneurs are more innovative than other individuals and that this ability becomes honed over time as it is even sharper in habitual entrepreneurs relative to more novice entrepreneurs (Robson, Akuettah, Westhead, and Wright, 2012).

Diaspora

Fascinating inquiry is also taking place with regard to diaspora entrepreneurship, which describes entrepreneurs who are living outside of their original homeland (Halkias, Harkiolakis, Thurman, Rishi, Ekonomou, Caracatsanis, & Akrivos, 2009). There are around 30 million Africans in the African diaspora and their relevance for African development is captured in the estimated US$40 billion they contribute yearly in remittances (International Fund for Agricultural Development, 2015). Much of these contributions come through entrepreneurial efforts (Newland and Tanaka, 2010). Even more compelling is that actual remittance numbers may be in excess of US$160 billion, with most of the money unable to be tracked since is it mostly sent through informal channels (Doyle, 2013). Some African countries have developed governmental organizations to encourage diasporas to make charity donations back to their communities (Kshetri 2013). This acts as proof that Africa benefits from connections to more developed countries in interesting ways and not just monetarily, but also through access to knowledge, both novel and industry specific (Levin and Barnard, 2013). Diaspora entrepreneurs help the economy and infrastructure through their ability to transfer institutional practices of more advanced host countries back home (Kshetri, 2013). Since diaspora entrepreneurs are more likely to be exporters of goods and knowledge, they also contribute to the internationalization of their host economies (Boly, Coniglio, Prota, and Seric 2014). In these regards, African diaspora contribute significantly to their home and host country’s development.

Research has also tracked the return of diaspora, who are also more inclined to engage in entrepreneurship upon their return (Marchetta, 2012). It is found that their migration experience helps their survival chances as entrepreneurs (Marchetta, 2012), potentially due to cultural enrichment while abroad. Other studies have focused on the specific contexts of Lebanon and Greece, recognizing that Lebanese entrepreneurs have had positive effects on sub-Saharan African economies (Ahmed, Zgheib, Kowatly, and Rhetts, 2012). Similarly, Greece has served as a landing point for many African immigrants and refugees, who start businesses and send substantial portions of earnings back home (Halkias et al., 2009). We note that even with the right personal attributes, entrepreneurs cannot be successful unless they operate within well established, functioning and strategically managed firms.

THE ENTREPRENEURIAL FIRM

Firm level research accounts for a large portion of the studies being conducted with regard to African entrepreneurship and about 43% of the literature in this review (See Table 2 above). Issues being considered at the firm level include organizational forms (e.g., family business, SMEs), type of entrepreneurship (e.g., socially oriented, informal), as well as the effects of social networks and capital access. These topics have remained areas of inquiry for some time, since African firms have difficulty sustaining operations and contending with the constraints of their environments (Kiggundu, 2002a). African entrepreneurs must lean on family members and their social networks to maintain hope of survival in a challenging environment (Deberry-Spence and Elliot, 2012). Additionally, entrepreneurs who do succeed with family ventures or informal operations often have trouble sustaining entrepreneurship any other way (Kiggundu, 2002a). In this section, these themes along with aspects of the entrepreneurial firm in Africa are further discussed.

Family Business

Family enterprises are a driving force for African economies. In South Africa alone, family businesses comprise an estimated 80% of all firms and account for 50% of the economic growth (Visser and Chiloane-Tsoka, 2014). Family businesses also frequently operate within the informal economy, allowing them to skirt regulation and inefficient formal institutions (Khavul, Bruton, and Wood, 2009). However, research on family business in Africa depicts more of a necessity driven motivation for this organizational form, given that family firms face a number of challenges. For example, family business networks can facilitate moral hazard and create circumstances that prompt dysfunction in the business (Khayesi, George, and Antonakis, 2014; Daspit and Long, 2014). While these businesses can leverage family and community ties to grow (Khayesi et al., 2014), they also need community ties in order to offset the burden that family ties can create (Khavul et al., 2009). Specifically, scholars have noted that African family businesses incur an undue responsibility to provide for extended family members (Luke and Munshi, 2006; Khavul et al., 2009). Though family firms experience benefits with regard to leveraging community and political ties, tie utilization has diminishing returns to performance (Acquaah, 2011b). Particularly, family firm networks have an inverted U-shaped relationship with performance while nonfamily firm networks display a more linear relationship with performance (Acquaah, 2011b). Both organizational forms (i.e. family and nonfamily firms), however, appear to have their own advantages with regard to network utilization (Acquaah, 2011a; 2011b).

It is clear that family businesses bring unique considerations to bear (Adendorff and Halkias, 2014). Family firms facilitate a family legacy of entrepreneurship (Morris, Williams, Allen, and Avila, 1997), which can employ children born into these families from a young age (e.g., Webbink, Smits, and de Jong, 2012). Also interesting are the steps taken by family firms to combat the “cousin consortium”, whereby distant relatives can step in to a family firm after the death of a male owner since women are granted few ownership privileges (Smith, 2009). A striking observation that Smith (2009) noted is that family firms have an incentive for multiple male owners to protect against this free-riding relative problem, whereas family firms have been traditionally viewed as a prevalent business form in developing economies in order to avoid opportunism in the institutional structures (Burkart, Panunzi, and Shleifer, 2003). Other research has considered sibling team success in family business, finding that diverse skills, strategic leadership and their physical resources positively correlate with performance. Another study found that the tenor of owner-successor relationship is important to the success of firm succession (Venter, Boshoff, and Maas 2005).

Social Networks

Social capital, community, kinship ties, and social networks are common themes that run through the African entrepreneurship literature (e.g., Kiggundu, 2002a; Khavul et al., 2009; Khayesi et al., 2014). Prior research has indicated that African entrepreneurs experience difficulty creating and maintaining effective social networks (Kiggundu, 2002a). However, recent research has been less concerned with their existence, and points more to their mostly positive consequences. Though this review has partially documented the positive and negative network implications for family firms (Khavul et al.; Khayesi et al.; Daspit and Long, 2014), research indicates that nonfamily firms benefit more broadly (Acquaah, 2011b; 2012). African entrepreneurial firms that take advantage of community networks are not, however, shielded from community demands that can later increase (Khayesi and George 2011). For the most part, social networks provide enduring benefits to nonfamily firms (Acquaah, 2011b) and also foster market entry and survival of female run ventures (Yusuff 2013; Dawa and Namatovu 2015). Research has also indicated that local network positioning can positively affect firms’ innovation (Gebreeyesus and Mohnen 2013) and even pointed to lack of social capital as being partly responsible for the scarcity of black entrepreneurs in South Africa (Preisendorfer, Bitz, and Bezuidenhout, 2012). Expert interviews maintained that blacks lack the social networks and support needed to better facilitate starting a career in entrepreneurship (Preisendorfer et al., 2012).

Informal Business

Business in the informal economy contributes roughly 50% of sub-Saharan Africa’s GDP and accounts for 80% of the workforce (African Development Bank, 2013). The informal economy offers impoverished Africans an opportunity to earn a decent wage, which they may not be able to accomplish through formal channels. The informal economy is unable to be regulated by governments and is untaxed, so African entrepreneurs avoid costs related to pensions, insurance, social benefits, and corruption (Ufere, Perelli, Boland, and Carlsson, 2012; African Development Bank, 2013). In this regard, operating in the informal economy enables informal businesses to experience more growth than they would otherwise (Khavul et al., 2009). Although informal channels offer needy Africans a way forward, there is obvious incentive for the government to offer these firms avenues to transition into more productive formal entrepreneurship (Bradford, 2007; Sheriff and Muffatto, 2014). Fostering this transition to formalization can be helped through government incentive programs (Bradford, 2007), but informal firms are also driven to formalization to avoid the tight competition that exists in the informal economy (Sonobe, Akoten, and Otsuka, 2011). More recent research suggests that informal entrepreneurs are primarily necessity-driven and that shop owner entrepreneurs are opportunity-driven (Achua and Lussier 2014). Achua and Lussier (2014) proposed a learning curve effect whereby informal businesses progress from street walkers to street corners before ultimately owning a store. As expected, factors such as human capital, industry, tenure, infrastructure access, and living conditions influence the market entry and success of informal firms (Gulyani, Talukdar, and Jack, 2010). However, this is not to say that there are not a large number of challenges facing entrepreneurs in the informal economy (Deberry-Spence and Elliot, 2012).

Problems hampering informal entrepreneurs are vast, success can be location dependent and informal business are constrained in a number of ways (Liedholm 2002; Grimm, Knorringa, and Lay, 2012; Amin and Islam, 2015). Urban and commercially located firms grow at a faster rate compared with those in rural locations, but demand for informal firms’ goods is reported to be income-inelastic, effectively constraining growth beyond a certain point (Bohme and Thiele, 2012). This type of hurdle hinders even the most motivated informal entrepreneurs (Grimm et al., 2012). In addition, informal businesses are also size constrained (Amin and Islam, 2015). Though poor performance of informal businesses is said to be reflective of size, small firms typically have higher productivity than larger firms, indicating that efficiency is a concern as informal businesses grow larger (Amin and Islam, 2015). Interestingly, their informal status does not restrict their capacity to organize in solidarity and assert their ability to use public space to earn a profit, as they will sometimes do to counteract government controls (Brown, 2015). Although the informal economy offers opportunity to Africans who would not otherwise have it, low returns to these base-of-the-pyramid producers by intermediaries reselling their wares in developed markets signifies the issues these entrepreneurial firms endure (Kistruck, Beamish, Qureshi, and Sutter 2013).

Financial Resources

Despite any difficult obtaining financial resources, it is apparent that Africans are undeterred from entering entrepreneurship (Achua and Lussier, 2014). Previous research maintains that the extent to which African entrepreneurs are financially constrained is questionable (Kiggundu, 2002a; Vandenberg 2003). This is supported by the observation that Africans need few resources to enter into the very prevalent informal means of entrepreneurship (Marsden, 1992). However, evidence from East Africa suggests that start-up grants and financing are useful to starting and growing businesses (Pretes, 2002). Also, the availability of financing has the ability to help communities alleviate poverty (Hilson and Ackah-Baidoo 2011). For example, returns to capital in Ghana’s informal sector show returns ranging in excess of 50−250% (Udry and Anagol 2006). Nonetheless, formal institutions struggle with handling economic development and deciding how to allocate resources to achieve financial sustainability (Annim, 2012). Kabango and Paloni (2011) found that financial liberalization in Malawi, which was supposed to increase industrialization, instead depressed firm entry and industry concentration. Another study found that fraudulent behavior on the part of loan applicants was quite common (Harrison and Krauss 2002). Even private microfinance entrepreneurs cited economic, political, and infrastructure impediments as challenges to effectively providing poorer citizens with access to capital (Murisa and Chikweche 2013).

Even though African entrepreneurial firms clearly have financial challenges, as evidenced, it seems as though recent research lacks insight on how best to progress. In a recent policy experiment, Karlan, Knight, and Udry (2015) exposed Ghanaian firms to either a cash or consulting treatment, whereby they sought to examine any change effects experienced as a result of the contribution. Surprisingly, they found that although the treatments had the expected results with changed business practices and sparked investment, businesses soon reverted back to their prior business practices (Karlan, Knight, and Udry, 2015). Another approach suggested by Ali and Peerlings (2011) advocates business clustering in Africa, where there is an interconnected geographic concentration of businesses and suppliers, contending that such clustering lowers entry barriers and reduces the initial capital required to start a business (Ali and Peerlings, 2011).

Social Entrepreneurship

Social entrepreneurship is generally defined as a business enterprise that is oriented toward finding solutions to social and/or environmental problems (Doherty, Haugh, and Lyon, 2014) and in Africa, it has specific relevance (Rivera-Santos et al., 2015). It is apparent that Africa is in need of development, as an estimated 48% of the population live in poverty, despite growing GDP (Brookings Institution, 2013). Correspondingly, there are several characteristics about Africa that predispose it for a disproportionately higher amount of social enterprise (Rivera-Santos et al., 2015). The level of poverty and informal business in Africa, along with its colonial history and ethnic identity, encourages African entrepreneurs to self-identity as acting in the public good (Rivera-Santos et al., 2015). Rivera-Santos et al. (2015) observe that many African entrepreneurs self-identify as social ventures given that sub-Saharan Africans share a collectivist worldview. On this point, social entrepreneurship is viewed as a way in which Africans develop their societies and employ young people while bringing about livable wages and positive social change (Katzenstein and Chrispin, 2011). For example, Nelson, Ingols, Christian-Murtie, and Myers (2013) chronicled the social entrepreneur, Susan Murcott, who dedicated her life to developing infrastructure for clean drinking water in Ghana. In hopes of better delivering on the promises of social enterprises, research has offered some useful direction.

A general consensus holds that for-profit social enterprises are the most promising organizational form for bringing sustainable development (Kistruck and Beamish, 2010; Littlewood and Holt, 2015). Compared with nonprofit organizations, for profit organizations are less accountable to network and cultural pressures (Kistruck and Beamish, 2010). Wheeler, McKague, Thomson, Davies, Medalye, and Prada (2005) propose that social enterprises should be anchored by a successful for-profit business and that sustainable social enterprises involve networks of communities, businesses, and local institutions. Building on this, Elmes, Jiusto, Whiteman, Hershey, and Guthey (2012) advanced the importance of a place-based approach to social entrepreneurship, where the location drives the need for any specific development or essential resources. In this way, individual social enterprises are able to definitively target community needs in a refined approach not achievable by larger bureaucratic nongovernmental organizations (NGOs) or nonprofits (Elmes et al., 2012; Littlewood and Holt, 2015)

SME Considerations

SMEs comprise an estimated 95% of the enterprises in Africa (Fjose, Grunfeld, and Green, 2010) and, as such, are an important source of growth for African development. Absence of key infrastructures such as access to electricity and finance are seen as large challenges that SMEs can help overcome (Fjose et al., 2010). Along these lines, although entrepreneurial characteristics have been found to be important, location is an important characteristic of increased performance (Masakure, Cranfield, and Henson, 2008). Basic infrastructures such as internet and access to global markets are viewed as means to increase innovation, performance as well overcome size, resource, and experience constraints (Moodley 2003; Regnier 2009; Goedhuys and Sleuwaegen 2010). Another study went as far to say that formal infrastructure that provides stability could be considered a source of competitive advantage (Webb, Morris, and Pillay 2013). Undoubtedly, governments that provide firms with secure property rights and sufficient architecture provide firms with greater incentive and stability (Deininger and Byerlee, 2012). Trulsson (2002) identified major SME growth constraints in Tanzania to be access to finance, financial management, market competition, human resources, the environment, infrastructure, government policy, and social networks. Despite the myriad hardships, SMEs find ways by which to circumvent their situations.

Franchising is one mechanism through which African firms leverage their circumstances (Welsh, Alon, and Falbe, 2006). Franchisees in emerging markets are able to take advantage of ongoing support, corporate marketing, innovation, and advanced market research (Welsh, Alon, and Falbe, 2006). Alternatively, emerging markets like Africa offer franchisors a growing middle class, a large youth population, and liberalizing economies (Welsh, Alon, and Falbe, 2006; Kiggundu and Deghetto, 2015). Another approach that African SMEs take to bypass infrastructural concerns is through partnering with multinational firms (MNEs) (Acquaah, 2009; Hearn, 2015). Acquaah (2009) found that firms are likely to pursue different strategies with international joint venture (IJV) partners depending on whether or not the firm comes from an emerging or developed economy. Particularly, with partners from emerging markets, firms are likely to pursue efficiency strategies that increase strategic positioning. On the other hand, firms pursue market effectiveness strategies when coupled with partners from developed economies. Hearn (2015) proposes that IJVs help increase the status of developing country firms.

MACRO SOCIO-ECONOMIC CONDITIONS

The macro socio-economic environment for Africa encompasses both African entrepreneurs and their respective firms. Moreover, socio-economic conditions broadly describe the state of Africa’s infrastructure and methods by which the government is working to achieve progressive development. Research covering these conditions comprises about 29% of the studies examined in this review. From these, major themes emerged concerning government assistance, institutions, government policy, internationalization, and poverty, which are presented below.

Government Assistance

It is broadly acknowledged that governments that help facilitate efficient formal institutions, such as financial and educational systems are better suited for entrepreneurship (De Clercq, Lim, and Oh, 2013). Though this may be generally true, governments must also consider more carefully how to design programs that specifically spur entrepreneurial initiatives. However, countries struggle with how to administer government assistance, with resources often not being put to their most effective use (Sievers and Vandenberg 2007). For example, Rijkers, Laderchi, and Teal (2010) found that assistance programs do not often affect small firms in the intended manner. They found that firms receiving program assistance appear to experience an earnings premium as a result of education and not through the adoption of new technology or increased labor productivity (Rijkers et al., 2010). Likewise, another study found that many governmental assistance programs are not well conceived in that many small firms will not use them since they do not meet their needs (Obeng and Blundel, 2015). More explicitly, programs are poorly marketed and fail to offer entrepreneurial training (Obeng and Blundel, 2015). Research has proposed that such programs can be helpful and has offered broad suggestions for their improvement (Ladzani and van Vuuren, 2002).

A study by Sievers and Vandenberg (2007) suggests that assistance programs need to be driven by demand and offer more than basic management training. They advise that successful programs should allow for linkages between firms, program providers, and financial institutions (Sievers and Vandenberg, 2007). Ladzani and van Vuuren (2002) also support this premise that entrepreneurial training programs need to be more comprehensive. In an experimental study, Glaub, Frese, Fischer, and Hoppe (2014) reported that a training intervention among entrepreneurs increased personal initiative behavior and led to an entrepreneurial mindset, which, subsequently, had a positive effect on performance. Mano, Iddrisu, Yoshino, and Sonobe (2012) also support that government assistance programs could focus on problems within the firm by familiarizing business owners with standard business practices, in turn improving performance.

Internationalization

Although improving, infrastructure has been found to dampen firm productivity by an estimated 40% (World Bank, 2013). Recognizing that Africa lags in terms of infrastructure, firm internationalization is important for increasing the pace of industrialization in Africa. Likewise, it may be in the best interests of many firms to go international. In this respect, current research seems to support this observation (Gimede, 2004; Omer, van Burg, Peters, and Visser, 2015). Omer et al. (2015) provided evidence that internationalization helps SMEs avoid government constraints in order to accelerate growth. Internationalization allows firms to break into foreign markets and create larger information networks to more easily export (Gimede, 2004). Also, firms that internationalize early and with clear goals are able to increase their legitimacy (Wood, Khavul, Perez-Nordtvedt, Prakhya, Dabrowski, and Zheng, 2011) and can better implement their strategic goals when they attain temporal fit (Khavul, Perez-Nordtvedt, & Wood 2010). Though African firms have clear incentive to partner with international firms in order to bring their products to the global market, MNEs also prefer joint ventures when entering markets with poor institutional frameworks (Meyer, Estrin, Bhaumik, and Peng 2009). These firm arrangements have benefits for both partners, and give foreign MNEs access to new markets, new resources, and local knowledge with minimum risk(s) (Meyer et al., 2009). While African firms can alleviate some of the difficulties their home countries present through internationalization, lack of government support can still hurt export efficiency (Omer et al., 2015).

Corruption and Poverty

Africa is home to over 300 million poor people and reducing poverty has been a slow process, especially in less developed economies and rural areas (World Bank, 2016). Though the percentage of poor has fallen 13 percentage points over the last 20 years, the population has grown and Africa is also home to several countries boasting some of the world’s highest rates of income inequality (World Bank, 2016). This state of affairs highlights the critical need for entrepreneurship. Entrepreneurship grants opportunity to Africa’s impoverished and has been helping to alleviate income inequality, in urban and rural Africa (Kimhi, 2010). The landscape and its demographics also offers opportunity to foreign companies that invest or locate operations in Africa (Bardy, Drew, and Kennedy, 2012). Even further, foreign direct investment (FDI) and international business can improve social conditions (Bardy et al., 2012). Since foreign firms from developed economies are often subject to higher standards of social responsibility, they may be able to diffuse some practices to indigenous firms (Bardy et al., 2012). Nonetheless, it is clear that African firms struggle to overcome the challenges of poverty.

A study by Deberry-Spence and Elliot (2012) distinctly chronicles some daily issues entrepreneurs encounter in underdeveloped countries. In their study, one example comes from a jewelry maker in Ghana, who describes a long commute to his marketplace where he finds urine puddles, litter, and people sleeping on his shop porch. Sometimes the entrepreneur finds his shop vandalized, with appliances unplugged and without electricity or running water (Deberry-Spence and Elliot, 2012). Adding to the challenges of poverty, Kistruck, Beamish, Qureshi, and Sutter (2013) found that bottom-of-the-pyramid producers are often not afforded fair wages when their goods are sold in developed markets, due to limited trade linkages. Foreign firms can either contribute to this environment or help host countries to institutionalize more beneficial business practices (Luiz and Stewart, 2014). However, according to Demuijnck and Ngnodjom, (2013), most African firms do not understand socially responsible business practices, which poses a problem for improved infrastructure and institutions. As a result, it is apparent that poverty is deeply rooted in Africa, and subsequently burdens the entry and performance of entrepreneurs. This suggests that poverty is more than income and assets; it is also a mindset.

Environmental Concerns

A prominent theme throughout the African entrepreneurship literature emerges as a focus on the African context, its infrastructure, institutions, culture, and government policy. Small businesses need better working conditions and Africa has failed to facilitate development despite several countries’ attempts to implement structural adjustment programs (Frese and Friedrich 2002). Recent research maintains that government reforms are necessary in order to improve these conditions, citing that political stability and entry deregulation have a positive effect for creating an environment conducive to new firm entry (Munemo, 2012). Similarly, Mahadea (2012) found that unemployment and regulation are positively correlated, indicating that countries with high degrees of regulation hurt both employment numbers and potential economic growth. Despite acknowledging the problems that infrastructure poses to entrepreneurship, many African countries lack foresight on how to remedy their situations (Deininger and Byerlee, 2012).

Government plays an important role in the development of entrepreneurship and also toward the impact that entrepreneurs are able to have on economic growth (Watkins, 2007; Bradford, 2007). However, policy needs to be better informed. For example, Rijkers and Soderbom (2013) remark how little incentive there is for non-farm enterprises in rural Africa. Since rural areas revolve around farms, development is curbed outside of urban centers. Major disadvantages are present for entrepreneurs when there are not adequate resources, including education, financing, regulation, and protection of property rights (Trulsson, 2002; Deininger and Byerlee, 2012). Alternatively, Goodstein and Velamuri (2009) contend that some failing policies are a consequence of power dynamics in post-colonial settings, whereby states use their power to dominate various institutional sectors in an attempt to reinforce legitimacy. Taken together, research in this area succeeds in recognizing troubles that African entrepreneurship encounters, but does little in the way of proposing potential reform. Foreign firms conducting business in Africa present an avenue for growth that could be promising or potentially troublesome, however.

Foreign MNEs and FDI offer the promise of more sustainable development for many countries in Africa. Amidst this opportunity, is the reality that these foreign firms can either contribute to more sustainable development or exploit the setting to their advantage (Luiz and Stewart, 2014). Though these actions are not mutually exclusive, government policy needs to be carefully oriented toward advocating economic growth and institutional improvements. For instance, Demirbag, Apaydin, and Tatoglu (2011) describe how Japanese MNEs are able to take advantage of weak institutions and low economic freedom in North Africa. Kshetri (2011) recognizes that foreign firms exploit Africa for its resources, in terms of natural resources (e.g., oil) and also labor resources (e.g., an inexpensive labor force). Similarly, Chinese entrepreneurs have been quite successful in Africa since they have better access to capital from home and are able to take more risks in attaining success (Shen, 2012). Conversely, FDI does not necessarily have to be one-sided and can often have valuable spillover effects, spurring economic growth and entrepreneurial activity (Washington and Chapman, 2014). Even further, 85% of the resource flows from the U.S. to Africa are from private sources, which is indicative of the opportunity for investment as well as the importance of FDI to development (Agbo, Agwale, Ezeugwu, Semete, Swai, Ikeme, and Somiari, 2008).

FUTURE RESEARCH CONSIDERATIONS

This review has summarized the last 15 years of African entrepreneurship research, which, while fragmented, is a diverse literature spanning different levels of analysis (e.g., the entrepreneur, the firm, and the environment). It is apparent that while research involving African entrepreneurship is diverse, it is still not given due consideration with respect to its large implications. Africa is a large geographical area, but only a small fraction of the entrepreneurship research taking place occurs within an African context, with other parts of the world being overrepresented. Entrepreneurship presents an opportunity for improved infrastructure, sustainable development, and poverty reduction and this makes it more critical to facilitate inquiry into the continent. While there are a number of avenues for future research, a few important themes emerge from this review.

Theory and Research Methodologies

As mentioned, much of the entrepreneurship literature in Africa lacks theoretical grounding. Even among the 121 studies reviewed here, many of which were empirically rigorous (62%), only 45 studies utilized a specific theoretical perspective (37%; see Table 2). This means that phenomenological studies make up much of the sample examined here (63%; see Table 2). The larger implication of this is that the literature is lacking a more intimate understanding of the African context. This is at least partly the reason for the fragmentation of the literature observed in this review. Without theory informing the development of new research, the literature lacks awareness of how specific mechanisms operate in African businesses, and how they more meaningfully differ from organizational behavior in other parts of the world. Given the context that Africa provides, which is one of a resource munificent environment steeped in a post-colonial setting with poverty and authoritarian governments, with recent sparks of reforms and progress, there would be the expectation that new theoretical contributions could emerge.

The authors expect that there are many contributions to still be made with regard to the already employed resource based view, as well as social capital, and institutional theories. For example, do informal entrepreneurs maintain competitive advantages through sales of substitutable goods? How do informal entrepreneurs’ social networks affect the move toward more formal channels of entrepreneurship? How do institutional norms and values diffuse between entrepreneurs of different African tribes, races or communities? Also, opportunity recognition, entrepreneurial exit, and habitual entrepreneurship are frequently considered topics in the entrepreneurship literature that have not yet received adequate attention in Africa. Organizational theories such as power and resource dependence, transaction cost, agency, and organizational ecology would also be beneficial to gaining perspective on the African context. As we understand, institutional development and residual ideologies of colonialism have made it difficult for Africans to navigate their environments. As such, new contributions in this area could shed light on how entrepreneurs could better mobilize and overcome the institutional and infrastructural challenges of their environment.

Although a variety of methods and data analysis techniques were used in the studies reviewed here, most frequently archival and questionnaire based data collection along with employing regression, African entrepreneurship literature could benefit from more ethnography and case study based research. A lot of what makes the entrepreneurial process in Africa unique may be lost when reduced to a quantitative approach. Entrepreneurs should be given voice to tell their stories and then use them as a basis for more theoretical or quantitative analyses (e.g. Sutton, Short, McKenny, & Namatovu, 2015). For example, we know very little about the succession, transfer and development of entrepreneurial capabilities within families and across generations, and the effects, if any on poverty alleviation in different African settings. More research focused on a deeper understanding may also partly address the greater philosophical debate as to what constitutes evidence. Fayolle and Riot (2015) address a similar point as they make light of the institutionalization of entrepreneurship research and the corresponding need for entrepreneurship scholars to think outside the box. More theoretical and grounded approaches to African entrepreneurship research along with longitudinal, event history, and multi-level models, which remain underexplored, present further opportunity for future research. In addition to theory development, researchers should use more innovative multitrait, multimethod, comparative and interdisciplinary approaches to the study of entrepreneurship in Africa or when comparing Africa with other (emerging) economies in the world.

Education, Technology, Development, and Training

There is growing interest in developing programs to select, educate, develop, and train entrepreneurs (e.g., Rijkers et al., 2010). Some of these programs are offered through universities, governments, and local or international organizations (e.g., International Labor Organization). However, many of them are expensive. While a few studies have examined these programs in the African context within the last 15 years (e.g., Glaub et al., 2014; Obeng and Blundel, 2015), the literature still lacks insight on how to execute these programs differently and with better results (Glaub and Frese, 2011). For example, is there a template for best practices elsewhere? Would entrepreneurs benefit from a targeted approach differentiated by individual and demographic information? Recent research has commented that many programs are not well designed to meet the needs of different groups of entrepreneurs (Obeng and Blundel, 2015) and that such assistance programs should better address the challenges that entrepreneurs may encounter in their careers (Mano et al., 2012).

The World Bank has shown interest in the issue recently. The organization further cites that it has not yet been determined if entrepreneurial success can be taught (Kigotho, 2014). Additionally, what is currently being taught is not well known (Kigotho, 2014). Undergoing case studies in Ghana, Kenya, and Mozambique, World Bank researchers report that programs are reliant on private and international support, there is little coordination across entrepreneurial education efforts, programs are not evidence based, and a significant gap exists between what is taught and what the local population values (Robb, Valerio, and Parton, 2014). Robb et al. 2014 cite the importance of building entrepreneurial mindsets, tailored and practice oriented programs, comprehensive avenues for tackling local constraints such as financing, and creating program evaluation to monitor the efficacy of assistance efforts. Moving forward, future research should consider how to address these relevant concerns.

The Association of African Business Schools (www.aabschools.com), representing over 30 of the top business schools on the continent, is in the process of launching a continent-wide accreditation program to enable business schools to have a renewed focus on relevance of the African context and more impact in the operating environment. The new focus is intended to shape entrepreneurship and innovation for Africa’s future. It is also expected to promote excellence through industry-academia collaboration, capacity building and quality improvement so as to enable business schools to support inclusive social economic growth by linking education, technology, innovation and entrepreneurship. It is expected that emerging African entrepreneurs will be better positioned to use such linkage (e.g., mobile technology, opening new markets, e-commerce) to take advantage of the digital dividends (Peña-López, 2016) ─ faster growth, more jobs, better services ─ to overcome the most problematic factors for doing business, and invest in key growth sectors of the African economies such as natural resources, infrastructure, agribusiness, tourism, social and community services.

Policy and Practice

Based on this review, there are a number of policy suggestions that can be made from synthesizing this literature. Broadly, government policies should take into consideration small business enterprise growth. Recurring issues for entrepreneurial firms in the African context involve infrastructure, property rights, financing, and various forms of government support. These fundamental problems affect many aspects of entrepreneurs’ firms. More compelling, is that many infrastructural concerns can be remedied through governments protecting property rights and providing entrepreneurs with support and basic access to financing. As noted, growth prospects can be stark for entrepreneurs unless they are working with larger companies through joint ventures or franchising (e.g., Welsh et al., 2006; Hearn, 2015). Of further relevance to private property concerns is the challenge that women entrepreneurs face with regard to ownership. This point addresses a larger struggle for equal rights and basic human rights that is endemic across the continent. Despite the fact that Africa has one of the world’s highest entrepreneurship rates among women, many African countries do not make it easier on them, with women not often not being legally allowed to own or inherit property (Dawa and Namatovu, 2015). Given that there is a significant African youth population that is unemployed, it is apparent that government resources should be directed toward capitalizing on such unmet potential (Kew, Namatovu, and Aderinot, 2015).

Policy concerns that involve corruption, poverty, and the environment can at least be partly addressed through giving entrepreneurs the resources they need to thrive. For example, internationalization offers promise to African firms that are hoping to overcome environmental constraints. Internationalization allows firms to access new markets, technology, increase growth prospects, and diversify risk, among other benefits (Meyer et al., 2009). However, many governments in Africa do not make it straightforward for firms (Omer et al., 2015). To this point, a larger problem that arises from this review that impedes social and economic progress is the issue of corruption. While there is some literature that explains the type of ethical behavior that multinational firms confront when operating in other countries (e.g., Rodriguez, Uhlenbruck, and Eden, 2005; Rodriguez, Siegel, Hillman, and Eden, 2006), it is more a recognition that the problem exists as opposed to a prescriptive approach to remedying it. One approach may come through pro-market reforms, which orient the government toward a capitalistic economy and potentially hold increased promise for foreign direct investment and struggling entrepreneurial firms (Cuervo-Cazurra and Dau, 2009). As Luiz and Stewart (2014) suggest, multinational companies have the opportunity to contribute to the institutionalizing of more ethical foundations within the countries they conduct business, which effects both policy and practice and makes a stronger case for economic liberalization. The recent arrival of more than a million Chinese migrants seeking business opportunities in urban and remote rural corners of Africa promises to change the entrepreneurial landscape and create unique opportunities for entrepreneurial research (French, 2014). The suggestion by Luiz and Stewart (2014) that foreign companies can positively influence the institutional framework through socially responsible behavior brings to bear the awareness that multinationals hold a significant amount of power in their ability to both economically contribute to the continent while institutionalizing positive business practices (Chakrabarty and Bass, 2014).

The quality of available data for entrepreneurial research in Africa is steadily improving. For example, the World Bank’s annual doing business reports on regulatory quality for SMEs (www.doingbusiness.org), the enterprises survey (www.enterprisesurveys.org) and the World Economic Forum’s annual Global Competitiveness Reports (www.weforum.org/reports) which provides data on determinants of global competitiveness as well as the most problematic factors for doing business in African economies together provide macroeconomic, social and firm level data for longitudinal and comparative study of entrepreneurship in Africa. These databases provide information about the entrepreneur, entrepreneurial firm, quality of public administration (regulation, corruption, institutions, etc.), infrastructure, technology, social development, access to credit and trading across borders.

It is clear from the literature, that African entrepreneurs face a number of environmental constraints. A recent issue of Africa Journal of Management (2015) featured stories from managers who describe previous issues with protection and isolationism (Njonjo, 2015), free trade (Shah, 2015), the pitfalls of bureaucracy (Bagalwadi, 2015), as well as hard to navigate regulations (Gibson, 2015). Others elaborate the importance of seizing opportunities (Musani, 2015), building trust (Kinoti, 2015), and firm diversification (Gadhoke, 2015). Many of these same problems and lessons are showcased in the research discussed here. Deberry-Spence and Elliot (2012) articulate the infrastructural constraints that lead to everyday challenges and part of the lesson within these managerial stories and entrepreneurial accounts is the importance of perseverance. While this insight brings the analysis back to the individual, the burgeoning informal sector and high rates of women in entrepreneurship also build evidence that Africans are necessity-driven (Adom and Williams, 2012) and find ways to thrive despite their environments. Outside of baseline recommendations of obtaining available education, persevering, continuing professional development, and maintaining social networks, successful entrepreneurs should work to advance the institutional landscape through advocacy of free trade (Njonjo, 2015), regional integration (Shah, 2015), and contributing to the moral and ethical fabric of society (e.g., Luiz and Stewart, 2014).

CONCLUSION

This review endeavored to synthesize the last 15 years of entrepreneurship research in Africa in order to facilitate future work. Examining Table 3, it is observed that research in Africa has increased over the years and has even experienced a recent spike. However, the fragmentation of the literature is revealed along with gaps in theory and research methodologies that future research should address. While this review highlights what has been done, it similarly draws attention to what we do not yet know and even that several topical research questions remain unanswered. For example, do entrepreneurial firms create jobs and what are the conditions for this? What is the link between entrepreneurship and productivity and innovation? Entrepreneurship in Africa needs to embrace innovation, drawing on the ideas of an ecosystem whereby ideas are generated and implemented in the form of new and value-adding products, processes and services in the marketplace. Are there ethnic groups that are more entrepreneurial than others? Do entrepreneurs cause harm to the environment? Also, future work should elaborate the role of intra-region entrepreneurship (Kiggundu and Deghetto, 2015) or intra-Africa diaspora entrepreneurship, those who move from one African country to set up business in another. As it stands, there are few studies that articulate diaspora entrepreneurship (e.g., Halkias et al., 2009) along with the contributions of Chinese and other southeast Asian entrepreneurs arriving to conduct business on the continent (e.g., Shen, 2012; French, 2014). Despite that its rate of entrepreneurship is higher relative to other parts of the world (Global Entrepreneurship Monitor, 2015) and that the informal sector accounts for a large portion of GDP (African Development Bank, 2013), entrepreneurs in Africa struggle to conduct business and thrive (Deberry-Spence and Elliot, 2012). Entrepreneurship may well be oversold as a panacea for Africa’s ills (e.g., unemployment, inequality, low productivity, disconnect from global value chains, etc.). If research can provide insight into entrepreneurship in Africa, then the literature should continue to develop drawing on the themes and suggestions provided in this review.

Notes

1. Avon is a direct selling or network marketing company that specializes in beauty and personal care products.