Omaima M. Hatem

African portfolio entrepreneurship and the creation of jobs

Purpose The purpose of this paper is to focus on large-scale portfolio entrepreneurship and its impact on the creation of stable wage employment in African economies. Design/methodology/approach The three studies focussed on Egypt, Uganda, and Malawi were all exploratory, inductive, and qualitative studies, which involved semi-structured interviews with 65 entrepreneurial founders of some of these countries’ most prominent business portfolios between 2009 and 2012. The data were collected through face-to-face interviews, which lasted between one and four hours, with the founders of each of these portfolios. Findings This inductive and qualitative study finds a connection between the creation of stable wage-paying jobs and portfolio entrepreneurship in three countries, representing three of the four different archetypal African economies. It also finds a strong connection between the development of new industries and portfolio entrepreneurship. Practical implications The practical and societal implications of these findings are incredibly important. The current and looming shortage of stable wage employment in Africa is reaching calamitous proportions. The growth in religion-affiliated terrorism and high-risk economic migration to Europe can be directly related to the lack of employment opportunities in African nations. The findings indicate that portfolio entrepreneurs are major players in the creation of such employment opportunities and government policies focussing on this area, as compared to focussing solely on SMEs, may be more effective in mitigating some of the drivers for emigration and terrorism. Originality/value This is the only study of its kind that investigates the role of large-scale portfolio entrepreneurship in the growth of employment opportunities in Africa.

The Challenge of Becoming a Successful Entrepreneur in a Hostile Context: The Example of Mohamed Ibrahim, the Founder of MSI and Celtel

Literature on entrepreneurship in Africa has a tendency to focus on entrepreneurship out of necessity, that is, on entrepreneurial activities conducted as a last resort when no other opportunities for employment are in reach. Innovation-driven business models and entrepreneurs are rarely the focus in this literature. This chapter illustrates that highly successful, innovation-based entrepreneurs also exist in Africa. It presents the case of Mohamed Ibrahim, the entrepreneur behind the consulting firm Mobile Systems International (MSI) and the telecommunications company Celtel. The case study outlines the successful development path of an outstanding entrepreneur who won against all odds in a hostile environment.

From Hibernation to Globalization

This chapter tracks the story of Egypt’s modern entrepreneurs during 60 years of military rule (1950–2010). While the period covered is the same in chapters 3 and 4, the two chapters differ in perspectives. Whereas chapter 3 examines state policies toward economic issues in general and the business community in particular, this chapter looks at the response of entrepreneurship to those policies. The two perspectives thus complement one another; they are essentially two sides of the same coin. While numerous issues appear in both chapters there is no analytical repetition. The perspective analysis of the same events is vastly different in each.

State and Entrepreneurs: Theory and Development

State and entrepreneurs have shaped economic activity and history throughout the world since the Industrial Revolution. The state affects the economy through its policies, while entrepreneurs affect the economy through their performance. Both logic and history demonstrate the interdependence of the two players, which do not always work in sync. When they do, a win-win outcome emerges to boost economic growth. When they are out of sync (win-lose) economic growth suffers. That delicate balance has prevailed for decades until shattered by the Great Depression.

Quo Vadis Egypt

In this chapter, we draw together the perspectives presented in this book on the relation between state and entrepreneurs that were viewed in the 200 years of Egyptian development. Within that long span, we set out to connect dots that may have appeared somewhat random, if viewed separately in the short or medium term. Fortunately, we were able to do so for two significant subjects. First, we have identified seven modalities of state policies vis-a-vis the business community. To this day, the lessons derived have general validity for policymaking both in Egypt and elsewhere. We shall recapitulate those lessons in the present chapter. Second, we also identified what we called “the human infrastructure,” a concept that refers to the combination of human capital in place and the associated nurturing institutions (chapter 1). It is a useful insight derived from observing entities (societies or business communities) pull themselves up by their bootstraps following periods of serious adversity. We saw the applicability of the concept not only in Egypt but also in Germany following its defeat in WWI, and Germany and Japan following their defeat in WWII.

State Policies: The Military (1952–2014)

In chapter 1, we proposed that state and entrepreneurs are two interlocking actors that govern economic activity. We also proposed that underlying this dynamic is a balance that exists between social and private gains, a concern that has been at the center of welfare economics. With the benefit of Egypt’s long-term development narratives, we identified seven different approaches for how the state managed the economy, which, in turn, affected the scope of entrepreneurial activity. In chapter 2, we presented the first four approaches, which spanned the Great Pasha’s dynasty (1805–1952). The themes covered included modernizing a backward economy, partnering with international business, intervening selectively, and shaping the nationalist agenda. In this chapter, we discuss the relation of the state with entrepreneurs during the 60-some years of military rule that followed the end of the Pasha’s dynasty (1952–2014).

State Policies: The Great Pasha’s Dynasty (1805–1952)

In chapter 1, we examined the relationship between state and entrepreneurs in theory and practice. We learned of the success of the state in improving national economic performance through public-private collaboration. From the experience of other countries, we understand that more and more entrepreneurs recognize the value of that collaboration to implement a win-win strategy and expand their own businesses. The specific nature of the role of state as applied to Egypt is the subject matter of this chapter. With the benefit of documented observations we find seven different formulas used by the state in managing the economy. Each has produced results some of which could be measured and assessed while some could not be measured but could still be assessed. Each has its own strengths and weaknesses. The question is: So what? The idea is to use the review as a guide for the future role of the state in Egypt. By implication, the usefulness of this approach could go beyond Egypt to benefit other countries. That the state plays a role in a country’s development is no longer the issue. Rather, it is what specific role or combination of roles does it play.