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SMEs - African confusion with entrepreneurship

Written by: Dr. Rob Smorfitt

Article Overview: Africa, but not necessarily only Africa, has blurred the lines between SME and entrepreneurship. Let us investigate the consequences thereof.

SMEs - African confusion with entrepreneurship

The governments of Africa have unfortunately followed a trend set by less competent consultants, and now often use SME and entrepreneurship interchangeably.

These two are not to be used interchangeably. While a SME may well be owned and run by an entrepreneur, it does not hold true that every entrepreneur owns an SME, or that every SME is owned by an entrepreneur. In a separate post after this I will detail the different types of entrepreneur identified in South Africa. I am sure that these will be identifiable in many countries and not only in the South African context.

It is important to understand the differences, particularly for government, and most importantly when planning interventions to assist the SME sector. If they can learn to identify the different characteristics of the different types of entrepreneur, they can better focus their efforts.

Furthermore, international research must be considered as well when planning these interventions. The South African government invests heavily in trying to create entrepreneurs among the youth and the less well educated. There is however much research that indicates, including my own South African research, that youth and poorly educated people seldom succeed in their entrepreneurial endeavours. If these efforts are merely a sop intended more as a political "bribe to the masses", then so be it. If however, there is genuine intent to create new SMEs then these policies and interventions need to be reviewed and revised.

Stop using the words SME and Entrepreneur interchangeably, as they have two vastly different meanings, and can lead to poorly designed interventions.

Regards
Dr Rob Smorfitt

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Article Tags: Africa, entrepreneurship, small business owner, SME, Smorfitt



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