Entrepreneurship is a national asset that helps economies grow and makes them resilient to the devastation caused by crises like Covid-19. These businesses need a supportive entrepreneurial environment and a mixture of responsive policy interventions during crisis periods. argues agricultural economist and agripreneur Dr Mahlogedi Thindisa.
South Africa has among the lowest early stage entrepreneurial activity when compared to other developing countries. This while businesses with a high level of “entrepreneur resources” – the skills and drive of a dedicated founding team – have been shown to outcompete companies with more financial resources.
The emergence of novel ideas and how these ideas are commercialised is central to the entrepreneurship process. Entrepreneurship involves the presence of opportunities and the corresponding presence of enterprising individuals that are identified as entrepreneurs.
Entrepreneurship is a function of entrepreneurs through identification of business opportunities and creation of value. Alertness to opportunities lies at the heart of the entrepreneurship process. According to Kirzner (2009), the Schumpeterian entrepreneur does not passively operate in a given world; rather they create a world different from that which was found.
The adverse impact of Covid-19 has brought uncertainty and anxiety to most businesses. Notwithstanding, it offers entrepreneurs opportunities for renewal and revitalisation. Entrepreneurship takes place at the nexus of uncertainty and opportunity recognition, creation and exploitation.
Mainstream entrepreneurship overlooks agriculture
According to the Global Entrepreneurship Monitor (GEM), South Africa’s total early stage entrepreneurial activity is amongst the lowest among peer developing countries. Moreover, the entrepreneurial activity is concentrated on necessity entrepreneurship as opposed to opportunity or high growth and technology entrepreneurship. Further, entrepreneurial activity indicates that about 10.7% of the working age population was participating in entrepreneurial activities in 2019, which is lower than regional average.
Additionally, South Africa has an unusually low share of employers and self-employed people in the labour force. These are major factors associated with inequality and economic exclusion. The contributing factors are limited resource endowments, poor entrepreneurial resources due to intermittent and uncoordinated entrepreneurship support by the State, fragile market relationships, and archaic technology due to low investment levels on research for development.
Firms endowed with superior entrepreneurial resources are likely to attain higher productivity and may effectively compete in the market compared to those without superior resources.
Scholars indicate that mainstream entrepreneurship research has, over time, overlooked the agricultural sector. Of the meagre published entrepreneurship research focusing on the agricultural context, more than 90% was undertaken in developed country setting with dissimilar institutional setting to African countries. This is a serious omission considering agribusinesses drive competitive performance of economies of many developing countries. Therefore, internal resources and capabilities of the agribusinesses in terms of entrepreneurial capital are critical to livelihood and welfare of nations.
Consistent with the resource-based theory, firms are composed of heterogeneous resources that are internally located and if exploited in proper combinations could generate a source of sustainable competitive advantage. Firms endowed with superior entrepreneurial resources are likely to attain higher productivity and may effectively compete in the market compared to those without superior resources.
The personal traits of an agripreneur are a source of unique resource endowment to the agribusiness. Researchers indicate that the management of small and medium agribusinesses is accompanied by concentration of decision-making power within the agripreneur which consequently feeds into the overall firm’s strategic approach. The process of achieving sustainable competitive performance of the small and medium agribusiness is strongly influenced by the agripreneur.
Time for a paradigm shift
Decision-making power in small and medium agribusinesses is centralised at the top. Albeit, small and medium agribusiness should not be readily inferred and interpreted as a scaled-down version of larger agribusinesses. Instead, they are vulnerable to economic and market shocks. Consequently, they need a supportive entrepreneurial environment and a mixture of responsive policy interventions in particular during crisis periods.
Accordingly, if entrepreneurship is to be integrated into agricultural development space, a paradigm shift is necessary. Agricultural training programmes and agricultural extension services are heavy on production-oriented approaches while neglecting entrepreneurial skills, competencies and capabilities of farmers.
First, there is an urgent need for capacity-building programmes at all levels, be it universities, colleges or training centres, to incorporate hands-on entrepreneurial skilling into the offerings. Policy makers should consider prioritising entrepreneurship pedagogy as a vehicle to enhance entrepreneurial capital of agribusinesses. Moreover, efforts to fast-track initiatives to declare agriculture and agro-processing pedagogy compulsory at secondary education level should be turbo-charged.
Second, a deliberate and long-term investment in the development of entrepreneurial capital of a cohort of agropreneurs is critical. Entrepreneurial capital is a function of individuals with a high quotient of human-social-symbolic-economic capital. Few agriculture and agro-processing incubations are in operation. A pragmatic policy, strategy and implementation on incubations as a means to provide hands-on and industry-specific experience to prospective agripreneurs is fundamental towards broadening the pool of skilled, competent and capable agropreneurs. An abundance of entrepreneurial resources is a key requirement for agribusinesses to attain and sustain competitive performance.
Third, agribusiness should inculcate and foster a culture and behaviour of proactiveness, innovativeness and risk-taking. Agribusinesses with high entrepreneurial orientation are likely to proactively anticipate shifts in the industry and positively respond by reconfiguring entrepreneurial resources. Moreover, agribusinesses would harbour an appetite to assume risk through investing in novel and innovative product range that satisfy industry-market demand.
Lastly, agribusinesses that adopt and inter-phase various entrepreneurship and strategic-marketing orientations are likely to exhibit higher competitive performance than single-mode agribusinesses. Therefore, agripreneurs should configure a combination of varied logics associated with different entrepreneurship, strategic and marketing orientations for improving competitive performance of the agribusiness.
In conclusion, the Covid-19 milieu also demands that agripreneurs should not simply sit back and blame the unfavourable environment. Entrepreneurship is a function of human agency. Agripreneurs with high internal locus of control are likely to intentionally make things happen by own action. Entrepreneurship requires individuals to deliberately take action and surmount obstacles, which is often a synthesis of imagination and realism.
Paraphrasing the adage: “Failure for agripreneurs and agribusinesses is an eventuality”.
Agripreneurs should learn lessons from failure and pick up pieces, keep hustling, keep grinding, and keep at it, despite facing a plethora industry and market barriers.