Skip to main content
Log in

Entrepreneurship and innovation in Ghana: enterprising Africa

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

This study adopts a multi-level theoretical framework to examine data from 496 entrepreneurs in Ghana. Seven types of innovation activity are analysed against three categories of variables: the characteristics of the entrepreneur, the internal competencies of the firm, and firm location. Across all respondents, the incidence of incremental innovation was far greater than novel innovation. The extent of innovation was related to the education level of the entrepreneur. Firm size and involvement in exporting were positively related to innovation, but firm growth is less systematically so. Innovation was greater in firms located in conurbations compared to firms located in large and small towns. We conclude with suggestions for policy to promote entrepreneurship and innovation in Ghana.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Adam, S. (1999). Competences and other factors affecting the small enterprise sector in Ibadan, Nigeria. In K. King & S. McGrath (Eds.), Enterprise in Africa: Between poverty and growth (pp.179–190). London: Intermediate Technology.

    Google Scholar 

  • Adeboye, T. (1997). Models of innovation and sub-Saharan Africa’s development tragedy. Technology Analysis and Strategic Management, 9(2), 213–235.

    Article  Google Scholar 

  • Adeya, N. (2006). Knowledge, technology and growth: The case study of Suame manufacturing enterprise cluster in Ghana. Knowledge for Development Programme. World Bank: World Bank Institute.

    Google Scholar 

  • Aldrich, H. E., & Fiol, C. M. (1994). Fools rush in? The institutional context of industry creation. The Academy of Management Review, 19(4), 645–667.

    Article  Google Scholar 

  • APDF. (2002). Business Support Programmes. Africa Project Development Facility. Accra: Ghana.

    Google Scholar 

  • Asamoa, A. (1996). Socio-economic development strategies of independent African countries: The Ghanaian experience. Accra: Ghana Universities Press.

    Google Scholar 

  • Audretsch, D. B. (1995). Firm profitability, growth, and innovation. Review of Industrial Organization, 10(5), 579–588.

    Article  Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Barr, A. (1999). Do SMEs network for growth? In K. King & S. McGrath (Eds.), Enterprise in Africa: Between poverty and growth (pp.121–131). London: Intermediate Technology.

    Google Scholar 

  • Bell, M., & Pavitt, K. (1993). Accumulating technological capability in developing countries. Industrial and Corporate Change, 2(2), 157–210.

    Article  Google Scholar 

  • Bhattacharya, M., & Bloch, H. (2004). Determinants of innovation. Small Business Economics, 22(2), 155–162.

    Article  Google Scholar 

  • Birch, D. (1979). The job generation process. Massachusetts: MIT Program on Neighborhood and Regional Change.

    Google Scholar 

  • Bowditch, N. H. (1999). The last emerging market, from Asian tigers to African lions, the Ghana file. London: Praeger.

    Google Scholar 

  • Brüderl, J., & Preisendörfer, P. (1998). Network support and the success of newly founded businesses. Small Business Economics, 10, 213–225.

    Article  Google Scholar 

  • Buame, S. K. (1996). Entrepreneurship: A contextual perspective, discourses and praxis of entrepreneurial activities within the institutional context of Ghana. Lund: Lund University Press.

    Google Scholar 

  • Burt, R. S. (2000). The network structure of social capital. In R. I. Sutton & B. M. Staw (Eds.), Research in organisational behaviour (pp. 345–423). Greenwich, CT: JAI Press.

    Google Scholar 

  • Chamlee-Wright, E. (1997). The cultural foundation of economic development: Urban female entrepreneurship in Ghana. London: Routledge.

    Google Scholar 

  • Chipika, S., & Wilson, G. (2006). Enabling technological learning among light engineering SMEs in Zimbabwe through networking. Technovation, 26(8), 969–979.

    Article  Google Scholar 

  • Chudnovsky, D., Lopez, A., & Pupato, G. (2006). Innovation and productivity in developing countries: A study of Argentine manufacturing firms’ behavior (1992–2001). Research Policy, 35, 266–288.

    Article  Google Scholar 

  • Clark, N. (2002). Innovation systems, institutional change and the new knowledge market: Implications for third world agricultural development. Economics of Innovation and New Technology, 11(4–5), 353–368.

    Article  Google Scholar 

  • Cohen, W., & Klepper, S. (1996). A reprise of size and R&D. The Economic Journal, 106, 925–951.

    Article  Google Scholar 

  • Cohen, W. M., & Levinthal, B. L. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152.

    Article  Google Scholar 

  • Coleman, J. S. (1990). Foundations of social theory. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Deraniyagala, S., & Semboja, H. (1999). Trade liberalisation, firm performance and Technology upgrading in Tanzania. In S. Lall (Ed.) The technological response to import liberalisation in sub-Saharan Africa (pp. 112–147). London: Macmillan.

    Google Scholar 

  • Dickson, K., Coles, A. M., & Lawton Smith, H. (1997). Staying the course: Small firm strategies for long term R&D collaboration. Business and Enterprise Development Journal, 4(1), 13–21.

    Google Scholar 

  • DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organisation fields. American Sociological Review, 48(2), 147–160.

    Article  Google Scholar 

  • Donckels, R., & Fröhlich, E. (1991). Are family businesses really different? European experiences from STRATOS. Family Business Review, 4(2), 149–161.

    Article  Google Scholar 

  • Drucker, P. F. (1995). Managing in a time of great change. New York:Dutton.

    Google Scholar 

  • Dyer, J. W., & Handler, W. (1994). Entrepreneurship and family business: Exploring the connections. Entrepreneurship Theory and Practice, 19(1), 71–84.

    Google Scholar 

  • Ernst, D., Mytelka, L., & Ganiatsos, T. (1994). Technological capabilities: A conceptual framework. Mimeo. Geneva: UNCTAD.

    Google Scholar 

  • Ernst, D., Mytelka, L., & Ganiatsos, T. (1998). Technological capabilities and export success in Asia. Mimeo. Geneva: UNCTAD.

    Google Scholar 

  • Ernst & Young. (1997). Development of business incubators in Ghana. Accra: Ernst & Young.

    Google Scholar 

  • Fadahunsi, A., & Rosa, P. (2002). Entrepreneurship and illegality: Insights from the Nigerian cross-border trade. Journal of Business Venturing, 17, 397–429.

    Article  Google Scholar 

  • Frazer, G. (2005). Which firms die: A look at manufacturing firm exit in Ghana. Economic Development and Cultural Change, 53(3), 585–617.

    Article  Google Scholar 

  • Freel, M. S. (2003). Sectoral patterns of small firm innovation, networking and proximity. Research Policy, 32, 751–770.

    Article  Google Scholar 

  • Freel, M. S. (2005). The characteristics of innovation-intensive small firms: Evidence from “Northern Britain”. Journal of Innovative Management, 9(4), 401–429.

    Article  Google Scholar 

  • Freel, M. S., & Robson, P. J. A. (2004). Small firm innovation, growth and performance: Evidence from Scotland and Northern England. International Small Business Journal, 22(6), 561–575.

    Article  Google Scholar 

  • Fritsch, M. (2004). R&D co-operation and the efficiency of regional innovation activities. Cambridge Journal of Economics, 28(6), 829–846.

    Article  Google Scholar 

  • Fritsch, M., Franke, G. (2004). Innovation, regional knowledge spillovers and R&D cooperation. Research Policy, 33(2), 245–255.

    Article  Google Scholar 

  • Gartner, W. B. (1988). Who is an entrepreneur? Is the wrong question. American Journal of Small Business, 12(4), 11–32.

    Google Scholar 

  • Ghana National Industrial Census. (1989). Ghana National Industrial Census 1987: Phase one report, background and results. Accra, Ghana: Statistical Service.

    Google Scholar 

  • Gospel, H. (1991). Industrial training and technological innovation: An introduction. In H. Gospel (Ed.) Industrial training and technological innovation. London: Routledge.

    Google Scholar 

  • Granovetter, M. (1983). The strength of weak ties: A network theory revisited. Sociological Theory, 1, 201–233.

    Article  Google Scholar 

  • Granovetter, M. (1985). Economic action and social structure: The problem of embeddedness. American Sociology, 91(3), 481–510.

    Article  Google Scholar 

  • Hadjimanolis, A. (2000). An investigation of innovation antecedents in small firms in the context of developing countries. R&D Management, 30(3), 235–245.

    Article  Google Scholar 

  • Hausman, A. (2005). Innovativeness among small businesses: Theory and propositions for future research. Industrial Marketing Management, 34(8), 773–782.

    Article  Google Scholar 

  • Hausman, A., & Fontenot, R. J. (1999). Generational business relationships: A multi-site case study of family owned businesses. Journal of Business and Entrepreneurship, 1(2), 41–58.

    Google Scholar 

  • Hipkin, I., & Bennett, D. (2003). Managerial perceptions of factors influencing technology management in South Africa. Technovation, 23(9), 719–735.

    Article  Google Scholar 

  • Hirsh, E. L. (1983). Segmented work, divided workers. In D. Gordon, R. Edwards, M. Reich (Eds.), The historical transformation of labor in the United States. (Reviewed), The American Journal of Sociology, 89(2) 466–468.

  • Hite, J. M. (2005). Evolutionary processes and path of relationally embedded network ties in emerging entrepreneurial firms. Entrepreneurship Theory and Practice, 29(1), 113–144.

    Article  Google Scholar 

  • Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review. Journal of Business Venturing, 18, 165–187.

    Article  Google Scholar 

  • Hobday, M. (1995). Innovation in East Asia: The challenge to Japan. Cheltenham: Edward Elgar.

    Google Scholar 

  • Hoffman, K., Parejo, M., Bessant, J., & Perren, L. (1998). Small firms, R&D, technology and innovation in the UK: A literature review. Technovation, 18(1), 39–55.

    Article  Google Scholar 

  • Huergo, E., & Jaumandreu, J. (2004). How does probability of innovation change with firm age? Small Business Economics, 22(3/4), 193–207.

    Article  Google Scholar 

  • Kamien, M. I., & Schwartz, N. L. (1982). Market structure and innovation. Cambridge: Cambridge University Press.

    Google Scholar 

  • Kennedy, P. T. (1980). Ghanaian businessmen, from artisan to capitalist entrepreneur in a dependent economy. London: Weltforum Verlag.

    Google Scholar 

  • Kiggundu, M. N. (2002). Entrepreneurs and entrepreneurship in Africa: What is known and what needs to be done. Journal of Developmental Entrepreneurship, 7(3), 239–258.

    Google Scholar 

  • King, M. E., & Hill, M. A. (Eds.). (1993). Women’s education in developing countries: Barriers, benefits and policies. Baltimore: The John Hopkins University Press.

    Google Scholar 

  • Kleinknecht, A., & Mohnen, P. (Eds.). (2002). Innovation and firm performance, econometric explorations of survey data. New York: Palgrave.

    Google Scholar 

  • Lall, S. (1995). Structural adjustments and African industry. World Development, 23(12), 2013–2019.

    Article  Google Scholar 

  • Lin, C. Y. (1998). Success factors of small-and-medium-sized enterprises in Taiwan: An analysis of cases. Journal of Small Business Management, 36(4), 43–65.

    Google Scholar 

  • Mahemba, C. M., & De Bruijn, E. J. (2003). Innovation activities by small and medium-sized manufacturing enterprises in Tanzania. Creativity and Innovation Management, 12(3), 162–173.

    Article  Google Scholar 

  • Malecki, E. J. (1997). Technology and economic development: The dynamics of local, regional and national competitiveness. Essex: Longman.

    Google Scholar 

  • Mambula, C. (2002). Perceptions of SME growth constraints in Nigeria. Journal of Small Business Management, 40, 58–65.

    Article  Google Scholar 

  • Marsden, K. (1990). African entrepreneurs: Pioneers of development. International Finance Corporation (IFC) Discussion Paper IFD-9.

  • McDade, B.E., Spring, A. (2005). The ‘new generation of African entrepreneurs’: Networking to change the climate for business and private sector-led development. Entrepreneurship and Regional Development, 17(1), 17–42.

    Article  Google Scholar 

  • McGrath, S., & King, K. (1999). Learning to grow? The importance of education and training for small and micro-enterprise development. In K. King &S. McGrath (Eds.), Enterprise in Africa: Between growth and poverty (pp. 211–222). London: Intermediate Technology.

    Google Scholar 

  • McPherson, M. A. (1996). Growth of micro and small enterprises in southern Africa. Journal of Development Economics, 48(2), 253–277.

    Article  Google Scholar 

  • Meyer, J. W., & Rowan, B. (1977). Institutional organisation: Formal structure as myth and ceremony. The American Journal of Sociology, 83(2), 340–363.

    Article  Google Scholar 

  • Mkandawire, T. (1999). Developmental states and small enterprises. In K. King &S. McGrath (Eds.), Enterprise in Africa: Between poverty and growth (pp. 33–47). London: Intermediate Technology.

    Google Scholar 

  • Murphy, J. T. (2002). Networks, trust, and innovation in Tanzania manufacturing sector. World Development, 30(4), 591–619.

    Article  Google Scholar 

  • Nadler, D. A., & Tushman, M. L. (1997). A congruence model for organization problem solving. In M. L Tushman, & P. Anderson, (Eds.), Managing strategic innovation and change: A collection of readings. New York: Oxford University Press.

    Google Scholar 

  • Ninsin, A. K. (1989). Planning for growth of small-scale industries in the informal sector: The realities, challenges of the Ghanaian economy. In E. Aryeetey (Ed.), Proceedings of ISSER/UNDP International Conference on Planning for Growth and Development for Africa. Legon: University of Ghana.

    Google Scholar 

  • OECD. (2003). Entrepreneurship and local development. Paris: OECD.

    Google Scholar 

  • Olomi, D. R. (1999). Entrepreneurial characteristics and small firm performance. In L. K. Rutashobya, &D. R. Olomi, (Eds.), African entrepreneurship and small business development. Dar Es Salaam: DUP LTD.

    Google Scholar 

  • Oyelaran-Oyeyinka, B., Laditan, G. O. A., & Esubiyi, A. O. (1996). Industrial innovation in sub-Saharan Africa: The manufacturing sector in Nigeria. Research Policy, 25, 1081–1096.

    Article  Google Scholar 

  • Palmer, R. (2007). Skills development. The enabling environment and informal micro –enterprise in Ghana. PhD Dissertation, The University of Edinburgh.

  • Penrose, E. T. (1959). The theory of the growth of the firm. New York: Wiley.

    Google Scholar 

  • Pfeffer, J., & Salancik, G. J. (1978). The external control of organizations: A resource dependence perspective. New York: Harper Row.

    Google Scholar 

  • Porter, M. E. (1990). The competitive advantage of nations. New York: The Free Press.

    Google Scholar 

  • Robson, P. J. A., & Obeng, B. A. (2008). The barriers to growth in Ghana. Small Business Economics, 30(4), 385–403.

    Article  Google Scholar 

  • Rogers, E. (1995). Diffusion of innovations. New York: The Free Press.

    Google Scholar 

  • Rogers, M. (2004). Networks, firm size and innovation. Small Business Economics, 22(2), 141–153.

    Article  Google Scholar 

  • Rogerson, C. M. (2001). In search of the African miracle: Debates on successful small enterprise development in Africa. Habitat International, 25(1), 112–142.

    Article  Google Scholar 

  • Romjin, H., & Albaladejo, M. (2002). Determinants of innovation capability in small electronics and software firms in southeast England. Research Policy, 31, 1053–1067.

    Article  Google Scholar 

  • Rondé, P., & Hussler, C. (2005). Innovation in regions: What does really matter? Research Policy, 34, 1150–1172.

    Article  Google Scholar 

  • Sackey, H. A. (2005). Poverty in Ghana from an assets-based perspective. Oxford: Blackwell Publishing Limited.

    Google Scholar 

  • Scherer, F. M. (1992). Schumpeter and plausible capitalism. Journal of Economic Literature, 30, 1416–1433.

    Google Scholar 

  • Schumpeter, J. A. (1942). Capitalism, socialism and democracy. New York: Harper.

    Google Scholar 

  • Sethi, R., Smith, D. C., & Park, C. W. (2001). Cross-functional teams, creativity, and the innovativeness of new consumer products. Journal of Marketing Research, 38(1), 73–86.

    Article  Google Scholar 

  • Sleuwaegen, L., & Goedhuys, M. (2002). Growth of firms in developing countries, evidence from Cote d’Ivoire. Journal of Development Economics, 68, 117–135.

    Article  Google Scholar 

  • SMIDO. (2004). SMEs incentives and support schemes, Small and Medium Industries Development Organization Year 2002–03, industrial zone. Mauritius: Coromadel.

    Google Scholar 

  • Sorescu, A.B., Chandy, R. K., & Prabhu, J. C. (2003). Sources and financial consequences of radical innovation: Insights from pharmaceuticals. Journal of Marketing, 67, 82–102.

    Article  Google Scholar 

  • Sternberg, R. (2000). Innovation networks and regional development–evidence from the European Regional Innovation Survey (ERIS): Theoretical concepts, methodological approach, empirical basis and introduction to the theme issue. European Planning Studies, 8, 389–407.

    Article  Google Scholar 

  • Sverrisson, A. (1997). Enterprise networks and technological change: Aspects of light engineering and metal working in Accra. In M. P. Van Dijk & R. Rabellotti (Eds.), Enterprise clusters and networks in developing countries (pp. 169–190). EADI Books Series 20, London: Frank Cass & Co. Ltd.

  • Takyi-Asiedu, S. (1993). Some socio-cultural factors retarding entrepreneurial activity in Sub-Saharan Africa. Journal of Business Venturing, 8, 91–98.

    Article  Google Scholar 

  • Teal, F. (1998). The Ghanaian manufacturing sector 1991–1995: Firm growth, productivity and convergence, CSAE WPS/98–17.

  • Van Dijk, M. P. (1997). Small enterprise associations and networks: Evidence from Accra. In M. P. Van Dijk & R. Rabellotti (Eds.), Enterprise clusters and networks in developing countries (pp. 131–154). EADI Books Series 20, London: Frank Cass & Co. Ltd.

  • Vesely, M. (2003). New technology for an old continent. African Business, 289, 20–22.

    Google Scholar 

  • Vossen, R. (1998). Relative strengths and weaknesses of small firms in innovation. International Small Business Journal, 16(3), 88–94.

    Article  Google Scholar 

  • Watson, J. (2007). Modeling the relationship between networking and firm performance. Journal of Business Venturing, 22, 852–874.

    Article  Google Scholar 

  • Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180.

    Article  Google Scholar 

  • Wheeler, J. C. (1991). Sub-Saharan Africa and OECD member states. In A. Adedeji, O. Teriba & P. Bugembe (Eds.), The challenge of African economic recovery and development pp. 228–253). London: Frank Cass.

    Google Scholar 

  • Wignaraja, G. (2002). Firm size, technological capabilities and market oriented-policies in Mauritius. Oxford Development Studies, 30(1), 87–105.

    Article  Google Scholar 

  • Wignaraja, G., & Ikiara, G. (1999). Adjustment, technological capabilities and enterprise dynamics in Kenya. In S. Lall (Ed.), The technological response to import liberalisation in sub-Saharan Africa (pp. 57–111). London: Macmillan.

    Google Scholar 

  • Wolf, S. (2004). Performance and problems of enterprises in Ghana. Department of Agricultural Economics and Agribusiness Working Paper, Ghana: University of Ghana.

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Bernard Acquah Obeng.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Robson, P.J.A., Haugh, H.M. & Obeng, B.A. Entrepreneurship and innovation in Ghana: enterprising Africa. Small Bus Econ 32, 331–350 (2009). https://doi.org/10.1007/s11187-008-9121-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11187-008-9121-2

Keywords

JEL Classifications

Navigation