In Uganda it seems like everyone and their mother (I do mean that literally) has their own business. In fact, the 2010 Global Entrepreneurship Monitor Report on Uganda finds that 31 of every 100 working age Ugandans are involved in some kind of entrepreneurial activity, making Uganda the 6th highest in terms of entrepreneurship out of the 59 countries surveyed.
Interestingly, there appears to be a strong relationship between GDP per capita and entrepreneurial activity, as can be seen below.
Source: 2010 GEM Uganda report, page 32. Download here.
So what does this mean?
High TEAs [Early Stage Entrepreneurial Activity] are mainly registered in developing countries. And there’s a group of scholars that have argued that the greater the poverty, the higher the TEA of the country concerned. GEM Uganda team does not wholly agree with these scholars as its number of entrepreneurs motivated by opportunity is also high and so is that of Ghana, Zambia and Angola.
Although the team believes that necessity is a factor in Uganda’s high TEA, some entrepreneurs are keen to pursue business opportunities in the country. The positive relationship between economic growth and entrepreneurship is unquestioned; it is the causality, the measures used, and the role of the state that need to be explored further.
I’m curious about the relationship between the Doing Business scores and entrepreneurship as well. I would imagine that while it may be difficult to set up a business formally (i.e. following all the rules/wading through bureaucracy) in countries like Uganda, the relative lack of regulation encourages entrepreneurs to try their luck in business, especially in the informal sector.
Your thoughts?
Melina Raquel Platas 