SMALL BUSINESS ENTREPRENEURSHIP

Entrepreneurship and Small Business

Entrepreneurship and Small Business

Introduction

There has recently been a surge of interest in entrepreneurship in developing and emerging economies. This has been partly motivated by remarkable private sector driven growth in emerging countries such as China and India. It has also been motivated by the growing number of women entrepreneurs in developing countries and the need to create employment opportunities for a predominantly youthful population in the world's poorest continent, Africa (Africa Commission, 2009). Moreover, following the global economic crisis of 2008-09, the economic stagnation in the world's advanced economies has made clear that developing countries would need to engage in much stronger efforts to raise their own domestic demand; stimulating private sector development through indigenous entrepreneurship is seen as one way of promoting growth in the domestic economy.

Theoretical Aspects

The practical interest in entrepreneurship in developing countries and emerging economies has led to a parallel academic interest in entrepreneurship in the economic develop ment process (Ross, 2004, 35). As Naudé (2008) argues, in order to understand the role of entrepreneurship in economic development, we need to understand both how entrepreneurship relates to successful economic outcomes, or economic dynamism, as well as to economic stagnation and collapse. Until now, most research has dealt with the former-typically focusing on the role of innovative entrepreneurship in high-growth settings (Szirmai, 2011). The issue of entrepreneurship, economic stagnation and collapse, for instance, when countries get mired down in violent conflict and economic contraction has been comparatively neglected. Moreover, the relationship between conflict and entrepreneurship, and small business in particular, is not well understood in the scientific literature. This is due amongst other reasons to the assumption of peace in most theoretical models, the absence of suitable theories in economics about the causes and consequences of conflict, the difficulty of collecting data in conflict-affected areas, and the dominance of macro-level approaches in political science.1 Furthermore, conflict is most often a characteristic or defining feature of states that have been described as "fragile." Fragile states are amongst the poorest, and lack authority, legitimacy and capacity to promote their citizens' wellbeing-often due to violent conflict, but also contributing to violent conflict (Paulson, 2004, 229). Given the widespread occurrence of violent conflicts in Africa, Latin America, the Middle East, and South Asia in particular, and the rising concern about fragile states and their repercussions for global development, the lack of research on the emergence of, and challenges to entrepreneurship and small businesses during violent conflict is significant.

As far as entrepreneurship is concerned, one definition of entrepreneurs is that they are "persons who are ingenious and creative in finding ways that add to their own wealth, power, and prestige" (Bennett, 2010, 53). More specifically, entrepreneurial talent may be allocated not only to productive activities, but also to unproductive (e.g. rent-seeking) or destructive (e.g. illegal) activities (Naudé, 2008 ). While we recognise the importance which destructive and non-productive entrepreneurship can play in armed conflict, the studies in this special issue-with the exception of the paper by ...