Sunday, May 9, 2021

Lack of market intelligence hampers entrepreneurship

A closer look at Botswana’s entrepreneurship ecosystem reveals that beneath the intricate web of initiatives like citizen economic empowerment, youth empowerment, financing and mentoring lies a hollow footing that threatens to reverse the gains that have been made over the years.

It would be amiss not to acknowledge that Botswana has launched a bold and positive discrimination towards entrepreneurship, the intention of which is to engineer a new economic growth path. The P120 million that is spent on youth development projects every year is indicative of a government that is serious about nurturing entrepreneurship. However, what is rather troubling is the common thread of lack of knowledge that laces the entrepreneurship ecosystem.

General dealers sprouted all over the country in the past economic era, which proves that the spirit of entrepreneurship existed way before.

The general dealers were wiped off after the emergence of major retail giants in the market. A piercing outcry was advanced against the retail giants as people cried out for protection by the authorities but to no avail.

The Competition Authority (CA) was inundated with complaints local businessmen, but they were told that Botswana is a free market economy. In the end, it emerged that a lack of innovation by general dealers was the main cause of their demise. The CA argued that the Competition Act does not prohibit dominance but rather the abuse of such overarching market position.

“There must be a conduct by the enterprise(s) that under international best practice is classified as ‘abusive’ in effect, i.e., prevents or distorts competition or otherwise exploits the dominant position ÔÇô which conduct is referred to as abuse of dominant position,” stated the CA.
The CA also highlighted that general dealers also had to contend with stiff competition in the market. Those that failed to innovate ended up closing shop. Lack of innovation is reflective of a deeper problem, which is the lack of acute understanding of how a business operation is run. Experts assert that it is one thing to recognize the need for innovation but quite another to appreciate that innovation comes from grasping and using insights and information about a particular market to carve a unique position. Therefore, it is safe to conclude that the owners of general dealers lacked such market intelligence, and not so much that ‘innovation’ eluded them. The basis of such market intelligence is knowledge.

Statistics garnered from The Business Place (TBP), a business information and referral walk-in centre in Gaborone, points to a deficiency in business start-up knowledge. The centre engages in one-on-one consultations with 15-20 aspiring entrepreneurs every day, the majority of whom want to learn the basics of drawing up a business plan. This information confirms the fact that the majority of people lack basic knowledge on starting a business. As at January 2015 TBP had a total number of 6,799 clients in its database and had registered more than 100 businesses from its individual client registry.

The lack of knowledge on business might perhaps be explained by the structure of the education system. It has been established that the curriculum lacks practical and proven reference to entrepreneurship, which according to industry titans leads to an acquaintance with the entrepreneurship concept by default rather than intent. This suggests that entrepreneurs run the risk of diverting from the intended course when the motivation comes from hostile circumstances rather than intent to offer solutions.

The state of affairs demonstrates that a loophole exists in the entrepreneurship ecosystem, sufficient enough to arrive at the conclusion that the starting point is drawing evidence based information that entrepreneurs can leverage on to increase the impact of entrepreneurship to the economy.

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