Mindset is the first step; Market is the most important step

Peter sage was in town. The respected British Entrepreneurs and motivational speaker who was part of the “Tabamiruka”, the grand Buganda conference left people in awe. Addressing a very attentive audience, the man who said he got a PhD in results and not books told the attendees that formal education did not guarantee success in entrepreneurship. This is a truism because worldwide research shows that most of the successful entrepreneurs have no high formal education and indeed on our local scene, the people who are loaded with money did not have formal education. The absence of formal education is replaced by human capital and social capital. They have loads of it which many of us with high formal education do not have. But that is for another day. Sage advised Ugandans that entrepreneurship was about mind change which he said was a psychological factor. He urged Ugandans to overcome their fears to doing business and getting themselves to believe that they can do it. He said people should get rid of the deficit mentality, that mentality that made them think that they cannot succeed if they were to succeed in life. He narrated what he called the relationships an entrepreneur needed to succeed in the entrepreneurial career. Interestingly the fear of God was one of them, a good relationship with other people, valuing money, managing time well and knowing that success came with risk taking. Sage is reported to have dropped out of school at the age of 16, has no formal education but he has been very successful in his career, he has written various books and runs successful businesses.

Entrepreneurship is a very interesting phenomenon. We are involved in an international research the Global Entrepreneurship Monitor (GEM) which has revealed that only 30% of Ugandans have ever and will start a business. This means that a large number of people have to be employed by others. The challenge we have in the country is  a large number of unemployed people and the question is how do you get them to be employed. There are thousands of small businesses in the country and this is true in many economies. Small business is said to be the vehicle for employment creation but then a large number of businesses fail. Many people have thought that business failure is bad. I like to say that business failure is good for the economy. Business failure arises from inefficiency. Inefficient producers or suppliers charge high prices. This is not good for the customer. What she should worry about is when the entrepreneur fails. Entrepreneurship is synonymous with innovations, business startup and job creation.  When an entrepreneur closes the business, it is because he or she cannot supply it efficiently. In the market, we would be worried if the good or service being supplied get off the shelf and are not substituted. This is not common. As one business closes, another emerges to supply or an existing business takes over that business responsibility to supply the goods to the societies.

Sometime back I argued that while it is good to bring international speakers, we should learn from them and develop our own capacity. I believe listening to Sage cost people shs 150,000/= in terms of affordability. This is a way out for a small business person. I am aware that there is a lot effort by NGOs Universities to spread the spirit of entrepreneurship. A lot has been done to stimulate entrepreneurship among the youth, women who are believed to be the vulnerable communities. There is also a lot of funding going out to various individuals. Unfortunately the results are not encouraging. True people are starting businesses, but what kind if businesses are these? It is possible today that there are 5000 bodabodas. Yes these are jobs but probably not the right type o jobs. Indeed people must move but not in such an expensive manner. Bodaboda as a means of transport increases the cost of production. For an individual who costs in the bodaboda charges, he may break even but at a global level, that business person cannot be competitive. The ideal for business is mass transport system. The trains and buses, of course with the roads, Uganda is a minimum of 10 years away from addressing this challenge. Thousands of people are doing business especially small business and many are able to get an income out of it. But the world has changed. The 50,000 vendors in Owino market could be replaced by more efficient system. That more efficient system requires a little more advanced technology. The jobs of vendors can be turned into higher quality jobs with additional technology, higher productivity and attendant jobs emerging from the application of this technology.

I am not prescribing a solution but creating a challenging thought to stimulate discussion on job creation. The enemy in Uganda is the quality of the jobs that we have. We must get to value adding jobs if our society is going to change. Uganda continues to export raw coffee. According to Andrew Rugasa of Good African Coffee, German re-exports coffee worthy millions of dollars. Uganda cannot export processed coffee to developed countries. So Uganda is excluded from that trend. Instead the developed countries add value to the coffee and re-export it. This is true for many primary products both agricultural and industrial. No amount of aid or entrepreneurship knowledge will ever enable the Ugandan entrepreneur change his life without the developed countries allowing the poor countries to export to them.

The models of growth globally have been the ability of poor countries exporting something to those with the money to buy. Uganda therefore will emerge from its position by producing more competitively and being able to sell to international markets. Yes, they may change the minds of people but if the people are going to start businesses that have no value added to them and cannot compete in international market, seminars will not be very useful. The challenge is we government to lobby internationally to enable Uganda have access to global markets.