Abstract
This study reflects on the perceived failure of entrepreneurship development initiatives to help ignite economic development in Malawi. A cross-sectional survey of 337 enterprises collected top-of-the-mind definitions of entrepreneurship, and innovations and their values carried out. Content analyses, comparison of mean values, 2 independent samples tests and multiple linear regression analyses showed that entrepreneurship is perceived as starting and managing one’s own business; being self-employed. Carrying out innovations is low and of low value, but enterprises which carried out innovations had higher median values than those that did not. The study found opportunity-motivated, growth-oriented, limited liability enterprises in the medium-to-large size category to be productive types of enterprises, but there were very few. It is argued that initiatives fail to help ignite economic development because knowledge which guides entrepreneurship development misses the essence of entrepreneurship—carrying out innovations. Secondly, there are no initiatives to support SME innovation and growth through product development, investments in modern production facilities and access to export markets. It is encouraged that key stakeholders adjust their understanding of entrepreneurship to neoclassical economic perspectives, encourage innovative start-ups and provide support to grow the numbers of productive enterprises.
Highlights
Small and medium enterprises (SMEs) are considered the backbone of the economy in Malawi since the early 1980s (Masten & Kandoole, 1997)
The results show that when entrepreneurship is perceived through neoclassical economic theories (Kirzner, 1973; Schumpeter, 1934) as identifying opportunities and carrying out innovations, it is very low among enterprises studied
Since the results show that limited liability enterprises create significant value of innovations, they become the category which requires the attention of entrepreneurship development initiatives
Summary
Small and medium enterprises (SMEs) are considered the backbone of the economy in Malawi since the early 1980s (Masten & Kandoole, 1997). This followed growing acknowledgement of the importance of entrepreneurship in job creation (Birch, 1979) and economic development (Baumol, 1968; Kirzner, 1973; Leff, 1979; Leibenstein, 1968; Schumpeter, 1934). The government supported development of privately owned enterprises through establishment of institutions which promoted the growth of the SME sector (Masten & Kandoole, 1997). The institutions provided a range of support services which include; start-up finance, enterprise start-up and enterprise management training, technical skills and start-up equipment, promotion of quality and standards, promotion of investment, trade and marketing, and infrastructure development
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