Unlocking Potential: Rethinking Support Programmes and the dynamics of entrepreneurial ecosystems in Ethiopia

Abstract

Entrepreneurship support programmes are a crucial component of the entrepreneurial ecosystem. These initiatives, often affiliated with the government, aim to facilitate and enhance productive entrepreneurship practices within startups. However, the effectiveness of these support programmes is frequently evaluated in isolation from other domains within the entrepreneurship ecosystem, neglecting the broader impact of these programmes on ecosystem dynamics. This paper explores how the structure and implementation of entrepreneurship support programmes in Ethiopia influence the entrepreneurial behaviours of firms within the ecosystem. This investigation extends previous research that has questioned the efficacy of entrepreneurship support programmes in generating productive entrepreneurial ecosystems. Using a qualitative research method that included 40 in-depth, semi-structured interviews with founders of manufacturing companies in Ethiopia, we show that entrepreneurship support programmes can discourage entrepreneurs and slow down market progress if they don't give resources to innovative and competitive companies first. In the absence of competition-based resource allocation, firms tend to prioritize survival over taking risks to expand operations, potentially impeding the creation of successful entrepreneurial ecosystems. Based on our findings, we propose a more pragmatic role for support programmes in fostering entrepreneurial ecosystems within developing economies.