Necessity Entrepreneurship Vs Growth Entrepreneurship; What Really Matters For African Women Entrepreneurs? Necessity Entrepreneurship Vs Growth Entrepreneurship; What Really Matters For African Women Entrepreneurs?
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Africa, the second most populated continent after Asia, stands as the powerhouse of entrepreneurs globally. With women covering half of the population, Africa has witnessed many women becoming entrepreneurs. According to the World Bank Enterprise survey, female participation in business ownership averages over 25% across Sub-Saharan Africa (WBES, 2013). The number of women business owners in Africa as a percentage of total business owners ranges from 25% to 35% in the majority of the countries (MIWE, 2017). For instance, in 2020, the MasterCard Index of Women Entrepreneurs (MIWE) ranked Uganda (39.6%), Botswana (38.5%), and Ghana (34%) as the top three world's leading economies having the most women business owners.

Despite the increase in women's participation in Africa, the challenge of necessity entrepreneurship remains the top challenge in Africa. Many entrepreneurs are in necessity entrepreneurship which focuses on small-scale production, rather than growth entrepreneurship which focuses on the high rate of production and job creation (WBG Women Entrepreneurship Program, 2018). The focus on necessity entrepreneurship has resulted in lower profits and sales revenues in total factor productivity.

Like any other African nation, Tanzania celebrates the increase of women business owners in Africa. The country's population is approximately 60 Million as of 2022. Women covering 48.2 % of the population have great potential if they are well equipped to understand the role of growth entrepreneurship. Some of the factors that hinder women from shifting to growth entrepreneurship are preference-driven factors such as social norms and inaccessibility of funds or lower funding to women entrepreneurs. Preference-driven factors such as perception of opportunities, self-confidence, and fear of failure also hinder women's shift from necessity entrepreneurs to growth entrepreneurs. For instance, Global Entrepreneurial Monitor (GEM) finds that women have a greater fear of failure and lower confidence in their entrepreneurial skills than men.

Another critical factor that has resulted in a slow shift from necessity entrepreneurship to growth entrepreneurship is the leadership knowledge gap in African women entrepreneurs. The traditional leadership model, which necessity entrepreneurs commonly use, has resulted in lower productivity and poor management of women-led businesses. In contrast, the modern leadership model has accelerated the growth of entrepreneurs' profit and business management practices. The contemporary leadership approach, which includes entrepreneurial leadership, focuses on blending the concept of growth entrepreneurship and leadership to increase the revenues and productivity of the business on the management level and profit.

Women need to have the technical skills to run the business and generate profit. Having technical skills doesn't guarantee success in business if the component of leadership is not taken into consideration. The extent to which women and men use the other side of social skills to run their businesses has dramatically affected how their business performs. Entrepreneurial leadership connects the power of entrepreneurship and leadership in generating a profit and maximizing employee satisfaction at the workplace.

The personal qualities of an entrepreneur who also acts as a leader of a business may decide to what extent the company grows in terms of revenues, production rate, employee satisfaction, customer satisfaction, and brand loyalty. While focusing on profit, women entrepreneurs need to create a bridge between leadership and entrepreneurship to foster the growth of growth entrepreneurship in women-led businesses in Africa.

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Justine Massaba
Written by

Justine Massaba

Justine Massaba is the co-founder of Eagle Lead Africa, a company that focuses on nurturing the generation of leaders in Africa. His mission is to empower companies and businesses to utilize the power of leadership in maximizing productivity and efficiency in the workplace.

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