ENTREPRENEURSHIP THE UNDERAPPRECIATED FACTOR OF PRODUCTION

This week is entrepreneurship week, a series of events which will highlight, celebrate and inspire this underappreciated factor of production.

Underappreciated because beyond lip service we do not appreciate the skill of the entrepreneur, because yes, it is a skill not some metaphysical or genetically passed on trait that is the preserve of a small minority among us.

Elementary economics teaches that the factors of production are capital, land and labour. What constitutes each of the above has been undergoing alteration in years. Capital has moved beyond cash, plant and machinery, land too has grown to include things like internet domains and other networks – physical or virtual. Labour has graduated to human resource, because muscle power that the industrial age economists may have been referring to has morphed more into the use of brain power.

Some people have added to these entrepreneurship or the ability to manipulate the previous three factors to show a return on investment.

"Thankfully in Uganda going into business for oneself is not looked down upon. In fact it is expected. Research bears this out...

In 2006 a World Bank sponsored research showed that Uganda was the most entrepreneurial country in the world. A subsequent research put us second only to Chile and more recently a UK research group confirmed our entrepreneurial proclivity.

Success in the market is not inevitable. Some statistics show that fewer than ten percent of the startup businesses survive beyond their fifth year. That dismal figure then puts as at distinct advantage as a country because if we can generate a thousand startups we can expect that maybe 100 will survive that is much better than starting 100 a year and only ten survive.

Our figures also show that entrepreneurship is not a congenital attribute, that a whole society can show a tendency towards it, debunks the notion that it is “in the blood”.

Our underappreciation of entrepreneurship comes from the misconception that – beyond that it’s a genetic condition, it takes money to be entrepreneurial. This attitude explains why we are all saving to start a business “one day”. While it is true many businesses collapse because they are undercapitalised it’s also true that many businesses have flourished while kicking off with the most meagre of resources.

"In trying to understand entrepreneurs, people have come up with all sort of personality traits that one has to have or develop to be entrepreneurial. Top of the list is that they have to have an appetite for risk. This has been scoffed at by the same entrepreneurs, the most successful of whom say that instead it’s the ability to manage risk that is key. They are always covering the downside...

The most successful of them have learnt this over years of experience.

And there are no shortcuts, despite what the movies show. When we see our successful businessmen, we are witnessing the finished product, we have no clue of the hardship and failure they have had to overcome, emerging from each stronger in spirit even if down on their knees financially.

Maybe that is the most outstanding feature of successful entrepreneurs, that while to the rest of the world they look like they are suffering debilitating losses or failure, to them they can say “I never lose. I win or I learn,” leaving the rest of us mere mortals shaking our heads at their “madness”.

You can’t pin down the essence of entrepreneurship but the management of risk and the ability to get up again and again from setbacks have to be at the top of the key criteria for entrepreneurs.

"For a country like ours keeping this pipeline of entrepreneurs is critical. Governments do not generate wealth it is entrepreneurs that do. If the history of the world has shown us one thing, it’s that nations are only as viable as their private sectors, read entrepreneurs...

Entrepreneurs ferret out the opportunities and manipulate resources around them to not only create material gain for themselves, but to provide society with essential goods and services.

 We need to celebrate and encourage the entrepreneurs among us and with us the entrepreneurship week as good as any place to start.