Ties that bind III: Understanding why Uganda ranks as one of the most entrepreneurial countries and a high startup failure rate

July 17, 2024 0

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Entrepreneurship as a human economic enterprise… continued

Entrepreneurship is a human economic enterprise established to make profits but with a purpose of making a difference in the community, society or world. It seeks to address a particular problem, thereby changing life and relations in a community or society. However, despite the major differences between them, the two terms Businessman and Entrepreneur are used interchangeably.

We can say that a businessman is someone who starts or operates a business with a business idea that already exists in the market whereas entrepreneur is an individual with an exclusive idea to initiate something new and to bring change into the world.

Critical to this article is that both businessmen and entrepreneurs are social actors. That is why humanity today demands social business and social business responsibility on the one hand, and social entrepreneurship and social entrepreneurial responsibility from the business actors (individual or corporate) and entrepreneurial actors (individual or corporate) respectively.

Besides the business mindset and entrepreneurial mindset must be socially and culturally sensitive and responsive, instead of being too technical and too mechanistic to be of positive social and cultural impact on people, communities, society and the world.

As Hidayat Rizvi (2024) writes “Social entrepreneurship focuses on creating businesses that primarily aim to address social problems. While traditional entrepreneurs might prioritize profit, social entrepreneurs put equal or greater weight on making a positive impact on the world. Their business models seek to be sustainable, but profit is often seen as a means to support the social mission rather than an end in itself”.

Scientific Entrepreneurship

Scientific entrepreneurship is defined by its ability to translate abstract theories and laboratory experiments into practical solutions that impact industries and societies meaningfully. It requires not only scientific expertise but also an entrepreneurial mindset and business acumen.

Scientific entrepreneurs are adept at identifying market opportunities, assessing technological feasibility, securing funding, navigating regulatory hurdles and bringing innovations to market successfully. Scientific entrepreneurship catalyses innovation, driving progress in various fields such as healthcare, technology, energy and beyond. Scientific entrepreneurs are crucial in advancing scientific knowledge, creating jobs, fostering economic development, and addressing pressing societal challenges.

Scientific entrepreneurship fosters a culture of collaboration and cross-disciplinary interaction. It brings together scientists, engineers, business professionals, investors, policymakers and other stakeholders to collaborate on innovative projects and ventures. This collaborative approach not only accelerates the pace of innovation but also enhances the scalability and sustainability of scientific endeavours.

Scientific entrepreneurship is a dynamic and multifaceted process that combines scientific rigor with entrepreneurial vision. It is key to the full potential of scientific discoveries and research, driving economic growth and shaping the future of industries and societies worldwide (Mind the Graph, 2024).

Mind the Graph (2024) observes that a fascinating intersection between science and business is gaining attention today: Scientific Entrepreneurship. This emerging field revolves around the transformation of scientific discoveries into successful businesses and ventures that address real-world problems or market needs. Scientific entrepreneurship combines the rigour of scientific inquiry with the agility and innovation of entrepreneurship, fostering a culture where groundbreaking discoveries are transformed into tangible solutions.

Unlike traditional science, which often focuses solely on expanding knowledge, and conventional business, which prioritises profit-making, scientific entrepreneurship bridges the gap between theory and practice, driving innovation, economic growth and societal impact.

Besides scientists can become entrepreneurs called scientific entrepreneurs. Scientific entrepreneurship represents a dynamic synergy between scientific inquiry and entrepreneurial innovation. At its core, it involves the transformation of scientific discoveries, breakthroughs and research findings into tangible products, services or ventures with commercial value. Scientific entrepreneurship connects academic research with practical, real-world applications, leveraging scientific knowledge to address market needs and drive economic growth (Mind the Graph, 2024). Scientific entrepreneurship matters for our future.

Mind the Graph (2024) distinguishes science and entrepreneurship. It states that science and entrepreneurship, while distinct, play complementary roles in driving progress and innovation. Science is primarily focused on knowledge creation and discovery, aiming to expand understanding in specific domains through systematic research and experimentation. Scientists pursue curiosity-driven inquiries, test hypotheses and contribute to the collective body of scientific knowledge.

In contrast, entrepreneurship is centred around value creation and market impact. Entrepreneurs identify opportunities, develop innovative solutions to address market needs and create viable businesses or ventures. While science seeks to advance knowledge, entrepreneurship aims to translate ideas into tangible products, services or ventures that generate value and drive economic activity.

Despite their differences, science and entrepreneurship share common elements such as risk-taking and problem-solving. While scientists face uncertainties related to experimental outcomes and data interpretation, entrepreneurs navigate risks associated with market dynamics, competition and business viability. Both fields require creativity, resilience and adaptability to address challenges and seize opportunities.

Moreover, the collaboration between science and entrepreneurship can lead to mutually beneficial outcomes, as scientific discoveries inspire entrepreneurial ventures and entrepreneurial innovation drives scientific progress. By leveraging the strengths of both disciplines, society can harness the knowledge of science and entrepreneurship to drive progress, foster innovation and create positive societal impact. Examples of scientific entrepreneurship include: Biotechnology, Clean Energy Ventures, Tech Startups, Agri-tech Innovations and Space Exploration Ventures (Mind the Graph, 2024).

Mind the graph (2024) has said that one can become a scientific entrepreneur through a combination of scientific expertise, entrepreneurial mindset and business acumen. It is also important to identify a promising innovation, develop entrepreneurial skills, validate the idea, build a strong network, secure funding, execute the plan and stay committed and resilient. It is, however, important to recognise that without technology transfer scientific entrepreneurship is a still baby. Technology transfer is the process of moving scientific discoveries, research outcomes and technological innovations from academic and research institutions to the commercial sector for practical applications and societal benefits.

It plays a critical role in translating scientific knowledge into tangible products, services, and solutions that address market needs and drive economic growth. The technology transfer process typically involves several key steps: discovery and research, intellectual property protection, evaluation and assessment, licensing and spin-off creation, commercialisation and development, marketing and sales, implementation and adoption and monitoring and evaluation.

As Mind the Graph (2024) observes entrepreneurs connect research with what the market needs bringing new opportunities across diverse industries. This dynamic process not only stimulates economic growth and development by fostering the creation of new businesses and job opportunities but also fuels technological advancements that address global challenges such as climate change, healthcare disparities, and environmental degradation.

Entrepreneurship in Africa:

According to the Global Entrepreneurship Monitor (GEM), 28 per cent of adults in Uganda own or co-own a new business (Anna Patton, 2016). The Global Entrepreneurship Monitor 2019/2020 ranked Uganda one of the most entrepreneurial countries in the world with 30 per cent of Ugandans starting businesses annually. However, the Uganda Registration Services Bureau (URSB) indicates annually that the collapse rate of businesses is very high. In his study ‘Causes of Small Business Failure in Uganda: A Case Study from Bushenyi and Mbarara Towns’ published in African Studies Quarterly, Volume 8 Issues 4 Summer 2006, Charles Tushabomwe-Kazooba, found poor management as well as political, economic, social, cultural and environmental factors responsible for the high failure rate. In practice, many of these are interrelated. The survey revealed that the startup factors posed a greater threat than those that are encountered once the business has been established. As such, business people who successfully negotiate the initial startup hurdles have greater chances of future success in their businesses.

Despite the solutions sought over the years, the business community in Uganda is still hampered by the challenges. The study concludes by making a number of practical suggestions against business failure.

Entrepreneurs across Africa often cite access to capital as the biggest barrier to growth. But money alone is unlikely to produce significant results. According to Daniel Jaloba cited by Anna Patton (2016) business people will be held back by poor record-keeping, mixing business capital and personal money, or spending profits on themselves instead of on the company. This short-term thinking is damaging to African business innovations and entrepreneurship.

Salewa Isaac (2023) has listed 10 reasons why African businesses fail: insufficient planning, financial struggles, lack of innovation, ignoring online presence, ignoring customer service, inadequate market research, insufficient capital, poor time management, failing to adapt to changes limited access to resources

The Uganda Registration Services Bureau (URSB) routinely produces long lists of firms that are struck off the register either for failure to submit their returns to government, or because of the reasons listed by Salewa Isaac (2023). However, bad governance, which is a cancer in most African countries cannot be ruled out as a major cause of the collapse of many firms, especially the indigenous ones.

Technological advancement transforms ecologies and ecosystems

Technological advancement has transformed many ecologies and many ecosystems, often towards artificiality. The ecosystems appear distinct from each other with time and space, but functionally they are linked with each other. No ecosystem can exist alone. They are always in contact with the adjacent ecosystems. There exist no functional boundaries between them. Adjacent ecosystems interact with each other in order to make their structure and function. The boundaries of ecosystem do overlap and this overlapping area is known as the transition zone. The transition zone is also known as the ecotone. The mixed ecosystem characteristics result in greater density and biodiversity along the ecotones. This phenomenon is called the edge effect. The new species living along edges are unique and are called edge species.

Despite our capacity for technological advancement, we are actively pursuing a status quo that jeopardises our future the natural ecosystems, humanity and other beings. With climate change looming and industries worldwide participating in greenhouse gas intensive practices, we must use innovation to engineer a more sustainable future.

“Scornful of the phrase ‘it can’t be done,’” Jon Koomey (2013) argues that ecological entrepreneurs uproot carbon intensive practices through innovation. In order to create the change, entrepreneurial thinking should permeate all areas of our society, from startups, to corporations, to policy-making, and even individual action. The more people there are who are willing to think and dream big about problem-solving, the more effective our action, collectively and individually, can be.

We need all levels of society to be at work on the climate crisis, but we also need all levels of our society working collaboratively. Businesses, large and small, count on policymakers and elected officials to give them the rules of the game, guiding their practices through laws and regulation that create the playing field in which companies and products can compete.

Scientific Entrepreneurship in Africa is still underdeveloped. However, in May 2024, the British Council announced that it will be funding, under the International Science Partnerships Fund, what it called The Africa Science Entrepreneurship (ASE) programme – an 18-month virtual, accelerator programme for data innovation products that are using Machine Learning or Artificial Intelligence (AI) tools and techniques to address uniquely African challenges. The programme is at the University of Leeds Business School, UK. It involves:

A 12-month virtual, part-time entrepreneurship course will be presented by Leeds University Business School and will include the following modules: What makes a good innovator and/ or entrepreneur; understanding the business model canvas; IP management; preparing your pitch deck & pitching your solution.
Technical support and mentorship over an 18-month period starting in August 2024 to individuals towards developing own data innovation solution;
An opportunity to present your solution in a Pitching & Technology Showcasing event to be hosted in South Africa in 2025, allowing the best solutions to engage with the South African market and innovation ecosystem
Individual and team projects will be considered with up to three team members to be considered for participation. Role of each team member must be specified in applications to participate. Organisers of the ASE programme reserves the right to accept or decline participation of additional team members
Participants will not receive any financial renumeration while participating in the programme.

Startups based in the following African countries are eligible for the ASE Programme: South Africa, Botswana, Kenya, Mauritius, Madagascar, Mozambique, Zambia, Angola, Ethiopia, Lesotho, Malawi, Rwanda, Senegal, Uganda, Tanzania, Burkina Faso, Sudan and the Democratic Republic of Congo.

Entrepreneurship in Uganda

Uganda is a country whose economy is estimated to be roughly 80 per cent informal, is inherently a country full of entrepreneurs and small business owners alike. The editor of Approved Index recently named Uganda the world’s most entrepreneurial country. With an entrepreneurship rate of 28 per cent, Uganda ranks in first place with almost double the entrepreneurship rate of Thailand, who comes in second place with 16 per cent! Uganda’s title of most entrepreneurial country is especially surprising due to its recent violent past. Despite being ranked the world’s most entrepreneurial country, few Ugandan businesses hit the big time.

Richard Branson (2015) gives 10 reasons why Uganda was the most entrepreneurial country in the world:

Everyone knows someone intending to, starting up or running a business
There are very few jobs
Salary is never enough
No safety in employment
Stock What? Stock Exchange
Glorification of Business
Abundance of opportunities
Absence of Oligopolies (i.e., a market form in which a market or industry is dominated by a small number of sellers (oligopolists)
There is room to risk
Low entry requirements

According to the CEOWORLD magazine Entrepreneurship Index for 2024, however, the United States is recognised as the world’s most entrepreneurial country with a score of 42.88. Germany (41.08) and the United Kingdom (35.8) followed as second and third, respectively. Israel (34.24) ranked fourth, with the United Arab Emirates (31.01) in fifth, and Poland (29.75) in sixth place. Spain, Sweden, India, and France rounded up the top 10 most entrepreneurial countries, in that order. Uganda is ranked 91st with a score of 12.59.

The United Nations Development Programme (UNDP) in Uganda was working with Startup Blink, an Israel-based company, to undertake a Rapid Strategic Assessment of Uganda’s Startup Ecosystem with the goal of identifying the main strengths and weaknesses of the ecosystem and design a National Strategy Roadmap for the Startup Ecosystem with actionable steps and recommendations for its improvement in the short, medium, and long-term. UNDP will conduct activities to activate the ecosystem, with a flagship online ecosystem portal at the centre of these activation efforts.

For the purposes of people nurtured in the natural sciences, let me fist introduce the concepts of business and entrepreneurship before I introduce eco-friendly businesses, eco-minded entrepreneurs, business ecosystems and entrepreneurial ecosystems.

However, we should remember that although knowledge has been disintegrated and disconnected severally to create small knowledges and professional fields with rigid walls, all knowledge in our interconnected world is one. To this end, all science is one, with three dimensions: natural science dimension, social science dimension and arts or humanities dimension.

Therefore, the territorial and tribal behaviour at university campuses is artificial and prevents meaningful and effective knowledge to emerge that we can use to solve our problems. This will only begin to happen if humanity in everywhere on Earth accepts and embraces the new knew knowledge production cultures and/or systems of interdisciplinarity, crossdisciplinarity, transdisciplinarity and extradisciplinarity or nondisciplinarity. These allow knowledge workers from different knowledge practice areas to think, reason, write and practice beyond their academic prison cells. Environment in particular does not respect territorial and tribal boundaries found in academia. Indeed, holistic study of the environment requires transcending academic tribal and territorial boundaries.

Business Environment

As UNACADEMY states “the business environment is made up of the company’s internal and external environments. All of the components in this environment, including firms, organisations, institutions, and forces, have a direct or indirect impact on the company. There are various aspects to the business environment. These characteristics should be thoroughly examined in order to make informed decisions and take appropriate steps toward the organisation’s ambitions and objectives. Changes in the external environment have an impact on the business as well.

As a result, proper research and comprehension of these factors are required to avoid major hazards to the organisation and turn them into opportunities. The business environment is made up of five components. Economic environment, technological environment, social environment, political environment and legal and regulatory environment are the five environments frequently mentioned, but there is also global environment, demographic environment, natural environment, environment. Each environment presents unique challenges and opportunities that businesses must be aware of in order to adapt and thrive.

Lucky Ekpebe (2023) advises that as a business owner, it’s crucial to recognise and understand the different types of environments that can impact your operations. He adds, “By familiarising yourself with these different business environments, you can better adapt to changes, maintain a positive reputation in your market and stay ahead of your competitors. For example, keeping an eye on changes in consumer behaviour and societal trends can help you adjust your marketing strategies to better reach your target audience.

Similarly, staying up-to-date on regulatory changes and compliance requirements can help you avoid legal issues and maintain a strong reputation for ethical business practices. By understanding the role and importance of these business environments, you can make informed decisions that lead to long-term success for your company. So take the time to learn about these different environments and their impact on your business, and use this knowledge to navigate challenges and stay ahead of the competition”.

Besides, the business environment: helps in identifying opportunities; helps in assessing risks; facilitates planning; helps in improving performance; helps in building reputation; affects business success; helps in compliance with regulations; influences decision-making.

Entrepreneurial environment

Entrepreneurship environment refers to the various facets within which enterprises – big, medium, small and other have to operate. The environment therefore, influences the enterprise. By and large, an environment created by political, social, economic, national, legal forces, etc influences entrepreneurship. Types/forms of entrepreneurial environment include: economic environment; social cultural environment; political environment; global environment; technological environment; and demographic environment.

Jianyu Ran, Ximin Yu and Donghai Ran (2020) have carried out research on the entrepreneurial environment element system of the deeply impoverished area in Northeast Chongqing of China. They write that factor analysis helps to define the migrant workers’ entrepreneurial environment element system: government and policy efficiency, production factor support, family and social support, entrepreneurial cost level, and business registration convenience. On this basis, they propose measures are proposed to optimise the entrepreneurial environment of the deeply impoverished area

Jyoti Chahal, Muhammad Haroon Shaukat, Rami Ayoubi (2024) addressed how entrepreneurial environment and education influence university students’ entrepreneurial intentions and the mediating role of entrepreneurial motivation. Their research explored higher education students’ entrepreneurial intentions (EI). It begins by exploring how various factors, including entrepreneurship education (EE), entrepreneurial motivation (EM) and entrepreneurial environment (EENV), contribute to the evolution of EI of students.

Second, it examines the role of EM as an underlying mechanism between EE-EI and EENV-EI. Finally, this research explores how EENV moderates the EM and EI relationship. Thet established a direct relationship was found between EE, EENV and EM with EI. Moreover, this research found a partial mediation of EM between EENV-EI and EE-EI paths. Also, the results show that EENV strengthens the link between EM and EI links.

Katalin Czakó, et al (2023) addressed the role of the environment in entrepreneurial propensity of youngsters’ business ideas. They observe that youngsters can think globally and have the highest skills to access information and know-how. The goal of the study was to find mediating regional effects on the presented business ideas by youngsters. We discovered links and possible causes of barriers in their propensity, which can originate from the environment. They linked values and made a numerical evaluation of youngsters’ business concepts, which gives not only a range but also the grade of the presence of local or regional elements. The results show that the more exact special elements of a national economy mentioned, the more barriers participants are aware of. The research concept and the results may give useful inputs in knowledge transfer and education of entrepreneurship, they concluded.

Business vs entrepreneurship; businessman vs entrepreneur business, businessman

academically speaking, business is considered a social science because it is the study of human behaviour, experiences, and development. Business as a practice may be defined as a human economic enterprise established for the primary purpose of making profits. It refers to an occupation in which goods and services are produced, sold and exchanged in return for money. It is carried out on a regular basis with the prime objective of making profit. Mining, manufacturing, trading, transporting, storing, banking, and insurance are examples of business activities.

Thus, businessmen run their business for the primary purpose of making profits; nothing else. Entrepreneurs intend to make profits but with a purpose of making a difference. They want to change the world by addressing a problem. They are passionate about providing unique solutions for problems in the community or society.

There is currently no single definition of social business. The most prominent definition of social business is that offered by Nobel Peace Prize laurate Muhammad Yunis. He defines social business as a business whose objective is to solve social, economic and environmental issues affecting humanity: hunger, homelessness, illness, pollution, ignorance… (HEC Paris). Broadly speaking, social business is a form of business striking a balance between social objectives and financial goals, situated somewhere between profit-maximising business and the non-profit sector. When understood in such broad terms, social business represents a significant sector of the economy. HEC Paris has considered how social business differs from conventional for-profit business and states:

As compared to regular for-profit business, social business inverts the relative priorities of profitability and social impact: The creation of social wealth moves into the foreground, becoming the primary focus of interest and activity.

Reversely, profitability is seen as a mere means to that end, sought only to the extent that it assures the financial viability of the business endeavour.

Importantly though, social business is still “business”, not charity. The owners of a social business are not philanthropic donors: Although they do not receive a monetary compensation for their investment, they are still entitled to recover it. Hence a social business must be financially self-sustaining, requiring from those who run it a series of conventional business capabilities, such as market-oriented thinking, innovativeness, and a managerial mindset”.

Ecological Business

Ecological can be defined as “a business that seeks to solve environmental problems by offering environmentally-friendly products or services or by implementing stringent internal procedures to improve environmental quality or human health for their customers and employees. Ecological businesses are thus eco-friendly and environmentally friendly. An eco-friendly business operates in a sustainable manner, causing minimal damage to the environment and using renewable resources where possible.

Ecofriendly means “not environmentally harmful”. When it comes to products, that means everything from production to packaging needs to be considered safe for the environment. For all this to be possible, the business people must be eco-minded entrepreneurs or ecopreneurs. An ecopreneur is someone who creates opportunities and develops businesses that are focused on reducing the earth’s climate change. This brings me to considering ecological entrepreneurs.

Ecological entrepreneurship

Ecological entrepreneurship (or ecopreneurship) refers to the measures taken by entrepreneurs who base their company or business strategy on environmental sustainability criteria. Ecopreneurs bridge the perceived contradictory worlds of the natural environment and business with the goal of radically transforming industries, economies and communities for environmental sustainability and business sustainability:

Sustainability is a very broad term massively overused sometimes in the wrong way. The FARMM (2022) breaks it into four: human sustainability, social sustainability, economic sustainability and environmental sustainability. Human sustainability focuses on how we can preserve and improve the quality of human life, whilst reducing our impact on the planet’s resources social sustainability implies valuing everyone equally, with community at the centre and understanding that social injustice and discrimination contribute to cultural and environmental degradation.

Economic sustainability requires that a business or country uses its resources efficiently and responsibly, so that it can operate in a sustainable manner, consistently producing operational profit. Environmental sustainability means that we are living within the means of our natural resources, clearly understanding what resources are abundant and which are scarce.

Ecological entrepreneurship is associated with an activity, which is conducted for minimising risks of the influence on all components of the environment with due regard to ecological preferences in the system of economic relations, and which is aimed at systematic gaining of profits on efficient use of property, writing in Lead The Change, a resource for aspiring leaders in sustainability, Buck Dovic and Chritina Wildt, in their “Ecological Entrepreneurship: The Key to a Sustainable Future”, submit that “We are in an unprecedented time of economic development and social change, which has led to better living standards worldwide. But despite our capacity for technological advancement, we are actively pursuing a status quo that jeopardizes our future. With climate change looming and industries worldwide participating in greenhouse gas intensive practices, we must use innovation to engineer a more sustainable future”. This, however, will only be possible of the scientific entrepreneurs, businessmen and other entrepreneurs are environmentally, ecologically and eco-systematically conscious, sensitive and responsible. As Jon Koomey (2013) wrote in his book “Cold Cash, cool Planet: Advice for Ecological Entrepreneurs”, the role of entrepreneurship is to create products that “make people happy to scrap existing [carbon intensive] capital” by making products that are simply better than what they replace. The reality is that climate change is urgent and unprecedented. The world cannot afford to place its faith in one group or institution, whether it is the government, corporations, or entrepreneurs. In order to achieve the emissions reductions necessary to avoid climate disaster, we must innovate at every level of society, government, and the economy.

Business Ecosystems

Business ecosystems are networks of companies that cooperate, collaborate, and combine their offerings to create value for users. Through ongoing research, we’ve found three categories that business ecosystems fall into: gateway, column, and stack.

Kaihan Krippendorff (2022) has defined business ecosystems as “networks of companies that cooperate, collaborate, and combine their offerings to create value for users. Through ongoing research, three categories of business ecosystems have been established: gateway, column and stack.

Gateway: In a gateway ecosystem, there is one point of entry for the consumer. An orchestrator, the “gateway” brand, provides credibility for all other partners in the ecosystem. Think Apple’s Appstore is a good example
Column: In a column ecosystem, partners can have multiple, individual goals, but they operate as a family. Customers can and frequently do interact with individual brands. Star Alliance, the world’s largest airline alliance, is an example
Stack: Partners join a stack ecosystem because they align with its purpose or long-term vision. In this case, the purpose is the brand for the entire ecosystem.

The eight dimensions of business ecosystems

According to Gallant Orbit (2023) there are eight dimensions of Business ecosystems: industry structure and competition, customers and demand, suppliers and partners, regulatory and legal environment, technological advancements, social and environmental impacts, economic factors and digital connectivity and data. It concludes that thriving in today’s business ecosystems requires a holistic understanding of the interconnected dimensions that shape them. By comprehending industry structure, customer needs, technological advancements, and other critical factors, organizations can navigate the complexity of the ecosystem and position themselves for success. Embracing collaboration, innovation, and responsible practices will enable businesses to adapt and flourish in the dynamic and ever-changing world of business ecosystems. However, Betsy Burton (2017) and Kasey Panetta (2017) recognised the following as the eight dimensions of business ecosystems: ecosystem strategy, degree openness, engagement of diverse participants, types of relationships, form of value exchange, diversity of industries, complexity of multiple ecosystems and technologies.

Why do business ecosystems fail or collapse

Business ecosystems offer immense potential for growth and collaboration, but they are not without their share of risks and challenges (Raju Oak, 2023). Even in the natural world ecosystems face a lot of risks and challenges, especially due to human activities. They replace and succeed each other. For example, a rain forest such as Mabira rain forest may be degraded through woodlands, to grasslands and even be replaced by buildings, which is the case in many parts of the only rain forest remaining in this part of the world. In fact, it is now close to natural only near the Jinja-Kampala Road. Raju Oak (2023) records that the ecosystem model manifests in different sectors like technology, healthcare, and energy. He lists a number of risks, namely: overreliance on partners; data security and privacy; competition and conflicts; ecosystem fragility; regulatory challenges; trust and reputation; ecosystem exit strategies; complexity of managing the size and growth of the ecosystems and balancing growth with maintaining the efficiency and effectiveness of the ecosystem; and challenges of navigating business ecosystems. So, it is evident that business ecosystems are very fragile and tend to fail and collapse easily.

There are many challenges that firms, companies or organisations face in navigating business ecosystems. Raju Oak (2023) lists them as follows:

Coordination complexity: Coordinating strategies, processes, and communication is a significant challenge in a business ecosystem. When coordination fails, the business ecosystem collapses
Trust building: Building trust among diverse partners with varying interests can be time-consuming and challenging. Trust is the cornerstone of success of a business ecosystem.
Resource allocation: Decisions about investments, profits, and costs must consider the interests of all parties involved
Strategic Alignment: Conflicting strategies among ecosystem members can lead to friction within the business ecosystem. Businesses must align themselves to the business ecosystem goals and objects or else they fasil and collapse
Adaptability: all ecosystems are dynamic, all the time changing. Therefore, businesses must adapt to survive; otherwise, they fail to adjust to the changes in business landscape, technology advancements, and market trends.

How to mitigate risks and challenges in business ecosystems

All business ecosystems have their risks and challenges. Raju Oak (2023) has listed some strategies that can be used to mitigate risks and challenges in business ecosystems, namely: diversification, collaborative agreements, cybersecurity measures, robust data governance practices, monitoring and compliance, conflict resolution mechanisms, resilience planning and continuous communication between members of the business ecosystem.

What are Entrepreneurial Ecosystems

An entrepreneurial ecosystem may be simply defined as the environment in which entrepreneurs operate It is made up of multiple factors, including physical assets, human and financial assets, government policies, networks, and the underlying business culture. The strength of entrepreneurial ecosystems often varies widely within a nation or a state as the assets, networks, and culture can differ significantly from one metro area to another.

The essence of an entrepreneurial ecosystem is its people and the culture of trust and collaboration that allows them to interact successfully. An ecosystem that allows for the fast flow of talent, information, and resources helps entrepreneurs quickly find what they need at each stage of growth. As a result, the whole is greater than the sum of its separate parts

A thriving entrepreneurial ecosystem, acceding to FasterCapital, includes these key elements:

Create a fertile ground for entrepreneurs to thrive, providing access to resources, networks, and support systems that are essential for success. By fostering collaboration, encouraging risk-taking, and promoting a culture of entrepreneurship, these ecosystems have the power to transform economies and create sustainable development
Synonymous with innovation and technological advancements, attracting entrepreneurs from all over the world. The presence of renowned universities, venture capitalists, and a culture that celebrates entrepreneurship has enabled the rapid growth of countless successful startups, such as Google, Apple, and Facebook. The interconnectedness of various stakeholders within the ecosystem has created a self-reinforcing cycle of innovation and economic prosperity.
Tips for building a robust entrepreneurial ecosystem: I. Encourage partnerships and collaboration between entrepreneurs, academia, government agencies, and investors. By creating a collaborative environment, knowledge and resources can be shared, leading to more innovative solutions and increased economic activity. II. Develop supportive policies: Governments should create policies that support entrepreneurship, such as streamlined regulations, tax incentives, and access to funding. These measures can help remove barriers and provide entrepreneurs with the necessary resources to succeed. III. Invest in education and skills development: building a strong entrepreneurial ecosystem requires a skilled workforce. Governments and educational institutions should invest in programs that promote entrepreneurship education and provide individuals with the necessary skills to start and grow their businesses.
City’s or regional government, along with local universities and business organizations, can create initiatives to support startups and foster innovation. Events – national, regional, global – attract entrepreneurs, investors, and industry leaders from around the world, further enhancing the ecosystem’s reputation and providing networking opportunities.
By nurturing these ecosystems, governments, businesses, and communities can create an environment that fosters innovation, job creation, and economic growth. By implementing the tips and learning from successful case studies, regions can unlock their full potential and become hubs of entrepreneurship and economic development.

The key dimensions of entrepreneurial ecosystems

SCISPACE states that the key dimensions of the entrepreneurial ecosystem include the social dimension and social economy enterprises ecosystems, inclusiveness and advancement towards sustainable development goals, operation and unique dimensions of individual ecosystems, stimulation of commercialization of research in a sustainable way, and critical dimensions and heterogeneous configurations of successful ecosystems.

It got insights from five papers: Conceptualization and critical dimensions of inclusive entrepreneurial ecosystems (Kamran Hameed, et.al.); From entrepreneurial and innovation ecosystems to the social economy ecosystem (Teresa Savall +1); Entrepreneurial ecosystems: Multiple domains, dimensions and relationships (Simon Stephens +4 more); Can enabling entrepreneurship ecosystem improve commercialization of research in South African Higher Education Institutions? (Thobeka Ncanywa +1 more) and Ecosystems of entrepreneurship: configurations and critical dimensions (André Cherubini Alves +5 more).

Uganda Entrepreneurial Ecosystem Initiative

In Uganda there is what is called Uganda Entrepreneurial Ecosystem Initiative (UEEI)launched in 2018 as a multistakeholder initiative bolstering entrepreneurship in the country through a bottom-up ecosystem building approach. UEEI is a network of multiple stakeholders working towards a deeply connected, vibrant entrepreneurial ecosystem in Uganda. UEEI has been incubated and is powered by the Aspen Network of Development Entrepreneurs (ANDE).

Uganda national entrepreneurship development institute

There is also the Uganda National Entrepreneurship Development Institute (UNEDI), a privately owned national resource development institution in Uganda whose focus area is entrepreneurship education, training and research. The institute provides training techniques, faculty support, consultancy, research as well as teaching and development of entrepreneurship training materials.

Futures

According to the Leadership Institute for Entrepreneurs, Entrepreneurship Ecosystems are the key to economic prosperity and job creation. Entrepreneurs solve problems, drive innovation, stimulate economic growth through job and wealth creation. Local ecosystem entrepreneurship ecosystems are the key to the success of an economy, not foreign entrepreneurship. Unfortunately, rather than encourage local entrepreneurship, the Uganda government politically and financially encourages foreign entrepreneurship. It gives foreign entrepreneurs tax holidays and even start-up capital, which it denies the local entrepreneurs. It even allows foreign entrepreneurs to take out all the money they make back to the countries where they come from.

Entrepreneurs need local support through champions and conveners who can build, organise, connect, and promote the ecosystem. An ecosystem should create a flow of talent, information, and resources to address each stage from ideation and launch to growth and scaling. To boost local business and entrepreneurship government must have a clear policy of supporting local businessmen and local entrepreneurs with enabling environment and money even more than it supports foreign businessmen and entrepreneurs.

Ameenah Gurib-Fakim and Landry Signe (2022) have written that science and technology are the key to economic boom in Africa. However, they note that a lack of investment in science and technology has undermined Africa’s economic transformation at both the structural level (the shift of workers and resources from low- to higher-productivity sectors) and the sectoral level (the growth of productivity within sectors).

This lack of investment has had far-reaching consequences: Without the economic and scientific infrastructure necessary for innovation, the continent has continued to rely on the colonial development model of resource extraction, which is both unsustainable and largely responsible for its debilitating poverty and aid dependency. They argue that:

These challenges have been compounded by economic fragmentation, as smaller markets constrain the long-term investments and patient capital that would foster innovation and drive technology transfer in the context of globalisation;
Bridging the skills deficiency gap in science, technology and innovation is vital to unlocking Africa’s potential and accelerating economic growth and prosperity. The best-trained, most talented researchers gravitate to environments where their work is leveraged by modern equipment, reliable utilities, and sufficient funding for supplies -and, perhaps most critically, where they can benefit from the presence of other talented people;
Creating an ecosystem where scientific culture can be central to economic transformation and policymaking decisions is a long-term investment that must not be at the mercy of either political or business cycles; and
Success will require effective tripartite (public-private-academia) collaborations and partnerships that will need to be sustained over time.

In the end, however, the extent to which society benefits from scientific discoveries, scientific innovations and scientific entrepreneurship, and how far entrepreneurs and businessmen exploit or use innovations to serve the public interest of “goods and services”, will determine the unity of science, business and entrepreneurship in the environmental, ecological and ecosystem dimensions of society. Environmental, ecological and ecosystem considerations and practices in business s and entrepreneurship reconnect us back to nature and reduce the artificiality of our human-made systems and the environmentally, ecologically and ecosystem unconscious business and entrepreneurship practices have created to the detriment of nature and our biological world as well as our future.

A Tell report / By Prof Oweyegha-Afunaduula, a former professor in the Department of Environmental Sciences of the Makerere University, Uganda. Prof Owegha-Afunaduula is also a cofounder of Centre for Critical Thinking and Alternative Analysis, Uganda

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