Journey from Beijing to Accra to reveal how local entrepreneurs can fuel national development

The complexities of modern societies make traditional development approaches less effective. Governments in developing nations, like Ghana, often lack funding. They struggle to develop institutions, infrastructure, and human resources for growth.

In sub-Saharan Africa, 15 out of 45 countries have government revenues below 15% of GDP. Resource-rich countries tend to have higher but less stable revenues than resource-poor ones. This highlights the need for private participation through entrepreneurship.

Government revenue includes taxes, duties, and fees collected by the government. In contrast, Gross Domestic Product (GDP) measures the total value of goods and services produced in an economy. GDP reflects overall economic activity while government revenue shows what contributes to the government's budget.

China recognized this issue in the late 20th century. The country shifted away from centralized planning and allowed private entrepreneurship. With over one billion people, China surpassed Japan's economy in 2010 due to this shift.

Entrepreneurship is crucial for nation-building. Several authors emphasize its role in fostering economic development through new businesses. Evidence shows a strong link between entrepreneurship and national growth.

Entrepreneurship involves individuals pursuing opportunities without regard to current resources. An entrepreneur assembles resources needed to turn ideas into viable businesses. Nafukho describes entrepreneurs as bulldozers who can overcome obstacles creatively.

Hayton defines entrepreneurship as identifying opportunities and creating value from them. Otaki views it as establishing new economic entities focused on innovative products or services. Entrepreneurs are vital for stimulating economic growth beyond mere profit-making.

According to Barringer and Ireland, people become entrepreneurs for three main reasons: they want independence, wish to pursue ideas, or seek financial rewards. Many view entrepreneurship as a desirable career path.

You likely know someone aspiring to start a business today or in the future. The popularity of entrepreneurship is evident in the growing number of books on starting a business. Amazon lists over 89,900 books on small businesses today compared to 62,700 in 2013.

National development refers to improving citizens' welfare across various sectors like education and health. Numerous studies show a connection between entrepreneurship and economic growth.

The Global Entrepreneurship Monitor (GEM) researches how entrepreneurship relates to economic development globally. GEM conducts annual studies involving up to 42 countries with findings available publicly.

Hisrich and Peters state that increasing per capita output leads to changes in business structures and society through entrepreneurship programs revitalizing impoverished neighborhoods worldwide.

Ahiauzu studied entrepreneurship's role in Ghana's economic development, citing that more entrepreneurs lead to increased growth rates. Morrison argues that entrepreneurship has historically been significant during societal transitions toward modern economies.

Economic expansion results from many human efforts driven by changing demand patterns for goods production. Developing countries like Ghana need knowledgeable investors willing to take risks on new opportunities.

Low-income entrepreneurs can help break poverty cycles in Ghana according to the International Labour Organization (ILO). Private businesses integrate resources effectively for success at local and international levels.

This dynamism stimulates job creation while promoting skill development and social mobility across regions worldwide through entrepreneurial creativity and agility.

Entrepreneurship accelerates economic growth by generating new jobs and opportunities essential for workforce transformation into skilled laborers.
In Ghana, about 49% of workers aged 15 years or older own their businesses (Ghana Statistical Service). Micro-, Small-, and Medium-sized Enterprises (MSMEs) dominate Ghana’s economy significantly contributing over 70% of GDP (Ghana Ministry of Trade).

MSMEs employ more than 80% of the labor force while leading the manufacturing sector with an active workforce comprising about 85%.

Entrepreneurship also promotes innovation by driving research that opens doors for new ventures or technologies addressing existing problems.
However, many entrepreneurs operate informally due to necessity rather than opportunity because of challenging economic conditions.
Research indicates that about 71% of ventures founded by opportunity-driven entrepreneurs create jobs employing an average of over eight full-time workers each.

Entrepreneurs can promote social change by challenging outdated practices while introducing new technologies leading towards improved living standards.
Social changes impact regional transformations significantly; thus recognizing social entrepreneurship is crucial.
In Ghana’s ICT industry alone, around 34% of start-ups provide services within this sector followed closely by agribusinesses.
Conversely, healthcare sectors show much less interest among start-ups indicating areas needing attention.
I hope you found this article insightful! Your feedback is appreciated; please share any topic suggestions you’d like me cover next!

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For further exploration on this subject matter I’ve compiled reading materials focusing on specific areas mentioned earlier:

1) Ahiauzu A., "Entrepreneurship & Economic Development"
2) Barringer B.R., Ireland R.D., "Successfully Launching New Ventures"
3) Dejardin M., "Entrepreneurship & Economic Growth"
4) GEM Reports
5) Ghana Ministry Trade Industry Report
6) Hayton J.C., "National Culture & Entrepreneurship"
7) Hisrich R.D., Peters M.P., "Entrepreneurship"
8) ILO Global Employment Trends
9) Izvorski I., Karakülah K., "Lessons For Developing Countries"
10) Malecki E.J., "Regional Development & Entrepreneurship"

Wishing you all a productive week ahead!

Dr.Maxwell Ampong serves as CEO at Maxwell Investments Group alongside being Honorary Curator at Ghana National Museum providing insights into relevant topics under ‘Entrepreneur In You’ initiative supported by Africa School Of Entrepreneurship!