Entrepreneurship as a Tool for Economic Development - Experiences from Eastern Africa

Licentiate thesis, 2013

Entrepreneurship as a tool for economic development became an item on the development aid agenda in the years after World War II. After having fallen out of fashion, it returned in the 1980s, when the fallacies of other economic development interventions had become apparent. The notion that entrepreneurship is a key for economic growth is today an important part of national development strategies in both developed and developing countries. As a means of introducing a more organized approach to entrepreneurship and a model of encouraging it, business incubator initiatives are established in developing countries. Such initiatives are intended to diversify economies, commercialize technologies and to create jobs and wealth. This thesis focuses on how entrepreneurs are supported through business incubators and discusses some implications of business incubator initiatives in developing countries. Research has previously shown that there is unclarity regarding the effectiveness of certain interventions, such as business incubators, on economic development. A deeper understanding of business incubation initiatives as means for economic development is therefore motivated. The research underlying this thesis was conducted on a single case in a village in Uganda. Here, students from Sweden aimed to establish a business incubator, starting in 2007. A study of this social entrepreneurship project was performed during 2009 and 2010. Data collection methods have included semi-structured interviews and participant observation and have been complemented by a literature study. The thesis considers issues related to how entrepreneurship and specifically business incubation is utilized as a tool for economic development. It contributes to the literature by discussing how and under what conditions it is valuable to translate the concept of business incubation from the developed to the developing world. It furthermore suggests that mobilization of entrepreneurship may be more fruitful than attempts to create it, and posits that project initiators need awareness of the risk of falling into ethnocentric perspectives. Based on the findings, areas for possible further research are outlined and discussed. The text thus points to two other possible areas for further enquiry: first, alternative forms of business incubation and alternatives to business incubation as a tool for economic development; secondly, the relation between entrepreneurship initiatives and other activities supporting economic development. The research is aimed at contributing to the knowledge around social entrepreneurship and entrepreneurship as a tool for economic development.