enterprise development in zambia: reflections on the missing middle

Journal of International Development

J. Int. Dev. 19, 793–804 (2007)

Published online in Wiley InterScience

(www.interscience.wiley.com) DOI: 10.1002/jid.1402

ENTERPRISE DEVELOPMENT IN ZAMBIA:REFLECTIONS ON THE MISSING MIDDLE

CHRISTINE PHILLIPS* and SEEMA BHATIA-PANTHAKI

University of Reading Business School, UK

Abstract: This paper is the result of the analysis of 200 interviews with Zambian enterprise

owners during the summer of 2006. It examines the reasons for the lack of growth of micro and

small firms and the resulting ‘missing middle’ in Zambia. The study finds that most enterprise

owners are risk takers, have bounded rationality in terms of their understanding of market

structure, conduct and performance and rely on inappropriate channels for their information. A

second group of enterprise owners who are less risk preferring, and do not have aspirations in

terms of firm growth is also identified. Most enterprises in these two groups do not operate on a

growth trajectory. Finally there is a very small group of enterprise owners who are truly entre-

preneurial. Policy recommendations address issues concerning the need for differentiated target-

ing to support firm sustainability and growth. Copyright # 2007 John Wiley & Sons, Ltd.

Keywords: Africa; missing middle; Zambia; SMEs

1 INTRODUCTION

Zambia ranks 166 on the HDI Index (HDR, 2005) and is one of the poorest countries in the

world. Following independence from British rule in 1964 Zambia faced a downward

growth trend due to the oil crises in the late 1970s until 2002, when this growth trend began

to reverse. However, much effort is still required to generate enough growth to meet the

poverty reduction targets embodied in the Millennium Development Goals (MDGs).

The country exports a narrow range of goods and depends on a few commodities such as

copper and cobalt and agricultural goods mainly cotton, flowers and tobacco for export

earnings. There has been rapid de-industrialisation in the face of liberalisation since the

1990s and life expectancy has fallen due to HIV/AIDS. However, due in the main to a

prudent fiscal policy, rising copper prices and debt cancellation in the last few years,

economic growth in Zambia has been more robust with real GDP growth in 2005 of around

5 per cent (IMF, 2006).

*Correspondence to: Christine Phillips, School of Business, University of Reading, Whiteknights, P.O. Box 218,Reading RG6 6AA, UK. E-mail: [email protected]

Copyright # 2007 John Wiley & Sons, Ltd.

794 C. Phillips and S. Bhatia-Panthaki

There have been several attempts to resuscitate private sector development (PSD) at

various levels of decision making. In the past decade, the economy has focused its

resources in targeted areas in order to kick-start the growth process. The Poverty Reduction

Strategy Paper (PRSP) adopted by the Government of Zambia provides a list of

development priorities that are aimed at reducing poverty in the medium to long run. These

priorities have to a certain extent dictated the earmarking and disbursement of donor and

government funding towards social sectors such as health and education. Although

spending in these sectors is of crucial importance to the development of any economy, this

has for sometime in the past taken away the focus from activities that directly influence the

development of business and therefore growth in the private sector.

Increasingly, attention is being focused on the development of the private sector in

Zambia as in other sub-Saharan Africa countries as both donors and governments realise

the importance of the private sector as an engine of growth. The development of the private

sector is now seen as one of the ways to reduce poverty as envisaged in the MDGs.

Both the World Bank and the Zambian Government have been involved in analysing

the investment climate (Ministry of Commerce, Trade and Industry, 2005; World Bank,

2005) in order to promote PSD. Although these studies provide adequate analysis of policy

requirements at the macro level and government has an action plan for a PSD reform

programme in place (Ministry of Commerce, Trade and Industry, 2005), there is little

information available at the enterprise or operational level to assess what sort of policies

and inducements are required to enable the private sector to grow and for the benefits to be

widely distributed. This is of particular importance in the micro, small and medium

enterprise (MSME) scale sector. The Small Enterprises Development Act (1996) defined

SMEs as all registered micro1 and small2 enterprises (usually referred to as MSE in

literature)3 in the area of manufacture, service or trading but not mining or recovery of

metals. Although a small number of (limited) studies on SMEs have been undertaken4 no

aggregate data exist and in reality the number of small and microenterprises operating in

Zambia, nor the size and sector in which they operate can be accurately estimated. The

dearth of statistics and resulting lack of analysis has been problematic and no coherent

SME policy exists in the country.

2 THE MISSING MIDDLE IN ZAMBIA

The MSME sector is important because it has the potential to provide employment for a

vast majority of the populace and be a seedbed for nurturing future entrepreneurs. In the

past, this important segment of the private sector has been the major (and successful) driver

of growth and exports as seen in the case of Taiwan and other South East Asian economies.

However, as Kauffmann (2005) points out, Africa’s private sector consists of mostly

informal microenterprises, operating alongside large firms. There is a need to stimulate the

1A microenterprise is defined as a business enterprise that employs up to 10 persons, has a total investmentexcluding land and buildings of ZK 10million and whose annual turnover does not exceed ZK 20million annually.2A small enterprise is defined as a business enterprise that employs up to 30 persons, has a total investmentexcluding land and buildings of ZK 50 million (for manufacturing firms) or ZK 10 million (for trading and serviceproviding firms) and whose annual turnover does not exceed ZK 80 million annually.3The term SME usually refers to small and medium enterprises but the definition in the Act includes micro andNOTmedium enterprises. All other references to SMEs in this paper refer to small and medium enterprises. MSEsrefer to micro and small enterprises.4Ministry of Commerce, Trade and Industry, 2005.

Copyright # 2007 John Wiley & Sons, Ltd. J. Int. Dev. 19, 793–804 (2007)

DOI: 10.1002/jid

Enterprise Development in Zambia 795

MSE sector to enable small and medium firms to emerge; for it is these that, given adequate

support and opportunities, have the potential to develop into a thriving SME sector and act

as the growth engine for PSD. Currently Zambia, as is the case with some of its African

neighbours, appears to have a missing middle of such growth-orientated firms.

The Zambian private sector consists largely of micro-firms (94 per cent of total firms)

providing 68 per cent of the employment in the country. The rest of the private sector

consists of small firms (5 per cent of total firms) and medium and large firms (0.4 and 0.06

per cent, respectively).5 Most of the micro and small firms are based in agriculture and

mining. Some activities in large scale sectors are concentrated amongst a few companies,

particularly that of copper mining. Concentration can also be found amongst large

exporting firms with the top 10 exporters accounting for 58 per cent of total national

nontraditional export value6.

According to the World Bank, over the period 1990–2003 the average growth of output

in manufacturing in Zambia was 1.9 and 3.3 per cent in agriculture (World Development

Indicators, 2005). Given that 68 per cent of Zambia’s population is below the poverty line

expansion in productivity and growth in manufacturing and agriculture has important

implications for economic growth and reduction in poverty.

3 FIRM PERFORMANCE AND GROWTH

The literature on SMEs and entrepreneurship points to factors both internal and external to the

firm that are influential in firm growth. External factors affecting the performance of firms

include variables such as macro policy and the ensuing conditions; industrial policy and

government attitude to the private sector and micro, small and medium scale enterprises;

public sector capacity; the institutional framework; the tax regime; the enabling environment;

targeting by donors and governments and the ability of firms to link into value chains.

At an operational level internal factors such as leadership and entrepreneurial ability,

attitude to risk, availability of working and investment capital, marketing and management

knowledge and know how, the availability of appropriate technology and the skill set of the

workforce all play their part in determining enterprise growth. Coupled with these are a

group of information variables including the level of understanding by entrepreneurs and

employees of local, national, regional and international markets, the importance of time

lines, quality and reliability, customs, business practice and consumer demand and tastes

that influence firm growth. Indeed the MSME sector is heterogeneous in nature comprising

different sized firms that operate in different industries and geographical regions, and have

varied resources and rationale for survival and growth.

Additionally, indirect factors like the level and appropriateness of services offered by the

financial sector; the degree and pertinence of various forms of institutional, information

and coordination failure; the ability of planners and policy makers to understand the needs

and constraints of micro and small firms as a heterogeneous group operating over time in

different markets; the operational capacity of local officials to implement these plans and

their ability to understand the workings of the private sector and the mindset of

entrepreneurs also affect the way in which firms grow.

5PSD Reform Programme Report—Ministry of Commerce, Trade and Industry, 2005. Statistics were collatedfrom different sources and the break up provided is from a sample of 1 486 601 firms classified according to size asmentioned earlier.6PSD Reform Programme Report—Ministry of Commerce, Trade and Industry, 2005.


DOI: 10.1002/jid


Bigsten et al. (1999) note that understanding the links between macro policy and firm

performance requires an understanding of how such policies impact upon firms. It is not

enough simply to have a functioning macroeconomic environment for firms to grow in.

Entry and sustained growth will not occur if the enabling business environment is not

appropriate. This is demonstrated by Beck and Levine’s study (2003), which finds that a

sound overall business environment is crucial to stimulating private investment for both

small and big firms.

In the debate emanating from the World Bank those who support SME as a growth

engine argue that small firms are unable to achieve maximum efficiency due to institutional

failure and the large number of poorly functioning and underdeveloped and absent markets

including financial markets (Biggs, 2001). In the case of Cote d’Ivoire, Sleuwaegen and

Goedhuys (1998) find that entrepreneurship and firm growth are strongly affected by

failures in the labour markets and financial markets. These market imperfections result in

increased costs, and have a negative impact on the growth opportunities of firms. Lack of

trust and unwillingness to share information exacerbate the challenges facing enterprises

by hindering information and knowledge transfers that are critical for the growth and

sustainability of small firms (Phillips and Della-Guista, 2006).

In the light of the above, and the various prevailing market failures that exist in low

income countries, selective interventions are required (Lall, 1994) to enable the sector to

achieve its full potential.

In our study we found that micro and small firms in similar sized markets appear to

behave differently. We also found evidence of enterprises operating below minimum

efficient scale (MES): rather than expanding and deepening activities enterprise owners

had a tendency to diversify into other markets. In aggregate, this had a profound effect on

the market structure in which SMEs operate and the potential for SMEs to spearhead

market and sector growth.

4 SMEs AND EXPORTS

Exports are a major component of growth in any economy, however most small firms in

developing countries do not export (Bigsten et al., 1999 for Africa, Regnier, 1993 for Asia).

It is quite common for very small traders, often operating in the informal sector, to take

bundles of goods, for example women selling clothing or jewellery on exporting trips, but

such activities are mainly survival orientated, do not impact greatly on growth at a national

level or even in the main part have any great influence on individual firms’ growth.

Zambia’s economy has a low level of export activity and what exporting does take place is

concentrated in copper, a major export revenue earner. Some exporting schemes and

assistance do exist in Zambia but the absence of value chains and an organised SME sector

means that few enterprises are able to harness into exporting in a systematic way. At the

firm level there is also a host of constraints, the impact of which will be discussed in the

following paragraphs.

5 METHODOLOGY

This study is part of a larger research project involving several sub-Saharan countries, and

aimed at providing evidence as to why and under what conditions some firms growwhereas


DOI: 10.1002/jid


others may continue in operation for a number of years and yet fail to thrive or show signs

of growth. The study covers micro, small and medium firms across a range of sectors

including manufacturing, trading, mining and services7.

A questionnaire was administered in Zambia during September 2006. It contained

questions on issues of ownership, size, employment, current and previous business

activities of owners, risk, access to information and finance, government incentives, aid,

gender and other factors affecting business such as transport, business licensing, ease of

entry and exit into markets and national and international trade.

Small and medium enterprises have the greatest potential to contribute to a thriving

sector but micro-firms were included in this study since they comprise a large part of the

private sector generating livelihoods and sustaining the majority of the working populace.

Also some microenterprises do, over time, grow into small and medium ones. This paper

only looks at the results from firms in Zambia and provides evidence on the dynamics of

market opportunity, size of firm, risk taking, information failure, institutions, finance,

attitudes of business owners and business horizons.

For the purpose of this paper, the authors have classified enterprises into micro, small

and medium scale enterprises8 according to the number employed. Seventy per cent of the

enterprise owners interviewed conducted their business in the urban and peri-urban areas of

Lusaka so wherever possible the study has noted this bias.9

6 PRELIMINARY RESULTS FROM THE CURRENT STUDY

In reality it is the dynamics of situations rather than individual constraints that have the

most powerful influence on outcomes. The World Bank (2003) and others set out

frameworks, lists of factors and sets of necessary conditions for small firm development,

but there is also a need to look closely over time and space at when particular factors

become binding and/or sufficient to promote growth.

6.1 Market Entry and Pricing Strategy

The reasons cited by enterprise owners for setting up business provide a good starting point

for analysis. In our sample 32 per cent of enterprise owners reported the main reason for

setting up business was that they had identified a gap in the market (group A)10; 47 per cent

of respondents said it was to supplement family income (group B). These group

classifications enabled us to separate enterprise owners into those who, at least on the

7Most microenterprises were traders operating across a wide range of activities with varying degrees oftechnology, for example sophisticated mining equipment to stationery. Services included hairdressing, guesthouses and employment and cleaning agencies; manufacturing consisted mainly of metal fabrication, textiles andapparel and carpentry.8As defined earlier—micro-firms have 1–4 employees, small firms have between 5–19 employees, medium firmsemploy 20–150 people and any firm employing a number larger than this has been classified as a large firm.9For example the level of education is much better in the areas where the survey was carried out simply becausepeople have better access to educational facilities. Therefore, business owners are, on average, much bettereducated than would be expected had a cross country analysis been undertaken.10On further analysis, we found that this group could be divided into two groups—those who were operating asgrowth orientated enterprises and those that had the potential to become growth orientated. The latter is classifiedas Group C (See Table 1).


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Table

1.Summarysurvey

results

Enterprise

owners

Mainreasonfor

startingbusiness

Pricingstrategy

Level

ofmarket

knowledge

andunderstanding

Risk

preference

Realistic

plans

forexpansion

Inform

ationchannels

GroupA:pioneering

entrepreneurs

Perceived

gap

inmarket

Costplus;afew

also

aligned

withcompetition

Variable;mostdid

nothave

agoodworkingknowledge

Risktaker

Mixed

—often

diversified

rather

than

expanded

�Businessassociations

�Traininginstitutes

�Suppliers

�Fam

iliesandfriends

�New

spapers

GroupB:subsistence

entrepreneurs

Supplement

familyincome

Costplus

Poor;often

misinform

ed

apartfrom

afew

Lessrisk

preferring

Only

dream

s—norealistic

plans

�Suppliers

�Market

place

�Fam

ilyandfriends

�New

spapers

GroupC:profit

maxim

isingor

‘trueentrepreneurs’

Identified

atrue

gap

inthemarket

Costplusandaligned

withcompetition

Onaveragegood

Risktaker

Realistic

short/m

edium

term

plansforexpansionand/or

diversified

�Businessassociations

�Competitors

suppliers

�Traininginstitutes

�Trademagazines



DOI: 10.1002/jid


surface, appeared to have set up for strategic rather than survival reasons, and test the

hypothesis that the former group would be more growth orientated.

Further investigation revealed that within group A, a large proportion of micro and small

business owners perceived this gap to be a short run opportunity for making business

profits. Perceiving entry and exit barriers to be low many of these enterprise owners acted

as if markets had more than a tinge of contestability. However, our research revealed that

far from being truly contestable markets, market signals were either misread or not

considered in the entry decision; or, fragmented and immature markets meant signals were

missing or inappropriate. We found that almost no microenterprise owners had undertaken

any form of market research before entering the market. Over 50 per cent believed an

opportunity existed because they saw others in the market (these markets were often

saturated).

A large proportion (62 per cent) of the all respondents used cost plus pricing mechanism

to price their goods. On the other hand, 22 per cent based the price of their produce on the

price charged by competitors; only 10 per cent did both. However, not one micro-business

owner made any reference to demand when questioned about their pricing or their market

research policy.

These findings indicate that few of the respondents had explored levels or fluctuations in

demand before, on entry, or whilst operating within the market. It can be argued that

enterprise owners did this indirectly by looking at competitors’ pricing levels or that these

small firms are price takers and are not able to price discriminate easily for greater profits,

and therefore just accept the going market price without question. Indeed most respondents

said that their main product was priced about the same as their competitors (or in just under

a quarter of cases, marginally below).

Alternatively, though, this behaviour could also indicate that enterprise owners made

little or no attempt to analyse the markets in which they operate or act as entrepreneurs

exploiting opportunities to maximise profits. Anecdotal evidence suggested that these

scenarios all operate to a greater or lesser extent.

6.2 Attitude to Risk, Finance and Information Gaps

Risk preference is a fundamental issue in the literature on entrepreneurship. Over-

whelmingly our entrepreneurs perceived themselves to be risk takers. However to ascertain

a more reliable indicator of their attitude to risk, entrepreneurs were asked to indicate how

they would behave in two separate hypothetical business situations. Their answers enabled

us to then classify entrepreneurs according to their risk preference.

The two main groups of enterprise owners differed in their attitude to risk. Within the

total sample 82 per cent of enterprise owners were found to be risk takers. Group A owners

were, on average, far more risk preferring.

Enterprise owners did not, in the main, use financial institutions as their main source of

initial or working capital. Over 75 per cent of interviewees obtained start up capital from

past saving or family and friends, and 47 per cent did not know how much financial

institutions would be willing to lend them. The latter figure rose to 76 per cent for small

enterprises, and yet 47 per cent of microenterprise owners and 63 per cent of small said that

the major obstacle to business was obtaining finance. Only 20 per cent of all the total

sample of respondents quoted the correct interest rates (within a 10 per cent margin either

way).


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Deeper questioning revealed that over half of our interviewees did not use/ have access

to formal, reliable information sources (most quoted newspapers as their major source).

Others suffered from information failures in terms of the true marketability of their

products, the means of financing their ventures and level of business know how needed

before there was any sizeable probability of success. However 28 per cent of the

respondents indicated that they were members of a business association and of those who

were the majority shared business information with other members both informally, and

through formal channels. Most business associations operated under ZSMBA11, a

relatively newly formed umbrella association operating in 69 districts across the country.

Discussions with the director revealed that there was a great deal of quality variance

between the different groups. Whilst some groups had excellent structure, leadership and

support system for firms the majority were either still in their infancy or were poorly

functioning. Funding was also a key constraint.

6.3 Business Expansion, Diversification and Entrepreneurship

The business horizons of enterprise owners were found in most cases to be very short as

indicated by respondents when asked about expansion plans, market research undertaken,

major reasons for setting up in business and knowledge about sources of finance or

institutional help available to help them grow their business. Seventy-eight per cent of the

respondents only conduct business in their immediate local areas.12

However when asked about the future a large majority stated that they wanted to expand

their business activities. Further questioning revealed that enterprise owners who fell into

category B (those who set up business to expand family income) had on average, no real

plans for expansion.

Approximately 14 per cent of all respondents owned other businesses. When asked why,

most commented that they could not earn enough income from the first business. However,

a small group was clearly operating as entrepreneurs, identifying opportunities and

growing their businesses.

Table 1 provides a representation via a broad brush picture of the behaviour and

motivations of our sample of Zambian entrepreneurs rather than an accurate statement of

any individual entrepreneur, but it does demonstrate the differences between the different

groups.

The groupings in the table are based largely on factors relating to entrepreneurship and

business success criteria. In the economic literature relating to entrepreneurship Knight

(1921) identifies the entrepreneur as a person willing to take risks in an uncertain

environment. Casson (1991) describes an entrepreneur as someone who acts as a

middleman, and makes judgemental decisions. In Table 1 we see that individuals in groups

A and B do not have a concrete understanding of the market place, nor have realistic plans

for expansion. In group B we can also observe that owners use informal information

channels which, for example in the cases of family and friends may be highly distorted or

biased. Under such conditions their judgement is unlikely to be sound, and this is

exacerbated with high risk preference.

11Zambia Small and Medium Business Association.12Defined as immediate local markets.


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Successful businessmen and entrepreneurs need to identify and exploit gaps in the

market, as is seen to be the case with those in Group C. Indeed, the profile of entrepreneurs

in group C appears to most closely match those needed to ensure a high probability of being

successful. Most group C owners were college graduates, whereas those in group B on

average had only received primary or secondary education. However, age did not seem to

affect success, in fact most enterprise owners were within the 25–45 age bracket.

6.4 Market, Government, Institutions and Information Failure

Government failure occurs in terms of policy due to the current tax regime in Zambia.

Licensed enterprises operate on a tax-free basis for 3 years after which they are required to

register for taxation. The survey showed that in several cases business owners utilise this

loophole by simply re-registering the company with a new name or owner to evade tax

payments. This results in a low tax revenue base and puts additional pressure to increase the

incidence of tax on registered firms. Several respondents mentioned that they were not

averse to paying tax but have had to exploit this loophole due to the presence of informal

traders that drive tax-paying firms out of business. Failure on the part of the government to

address this issue provides incentives for firms to stay small and stagnant and inhibits the

growth of a dynamic, competitive small firm sector.

Building institutions may also include introducing a range of subsidies, including

government guarantees, government sponsored reductions in the rate of interest and

government run direct credit programmes (Levine, 2005), as well as the standard set of

formal and informal support institutions. Open ended interviews with members of

institutions both public and private revealed a host of institutional failures that effected

enterprise performance. For example the work of training organisations such as TEVETA13

is constrained by budgetary challenges and limited reach due in some part to an inability to

identify firms when no data are available. This means skilled work in woodwork and metal

remains low quality and sells at a low price because no training in relatively simple areas

such as finishing is available. Workshop visits allowed us to see the very high quality work

of skilled artisans who had successfully undergone training in finishing. However,

marketing was still a problem for them, as lack of information dissemination to potential

consumers meant consumers preferred South African goods believing them to be of higher

quality.

High interest rates also signal the sub-optimal conditions in which firms have to operate.

In Zambia currently, interest payments impose high and often prohibitive cost on business

expansion. The burden is particularly heavy for micro and small businesses. The high

interest makes it difficult for firms to access both start up and working capital. The knock

on welfare effects are also a major concern in a country where the vast majority of

individuals rely on micro and small enterprises for their income.

7 SUMMARY DISCUSSION

The results of this study confirmed that in Zambia businesses suffer many of the constraints

detailed in the literature.

13Technical, Entrepreneurial and Vocational Education and Training Authority (TEVETA) is a quasi governmentinstitution.


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However, a couple of very useful observations did arise in relation to Zambia’s missing

middle and MSE policy recommendations. Zambian MSEs and their owners are a

heterogeneous group, and firms in similar sized markets do indeed appear to behave

differently.

If smaller sized firms are to grow they need to operate within networks; lack of trust and

poverty can lead to a ‘dog in the manger’ type mindset. Rather than share information and

risk others gaining a competitive advantage our sample enterprises seemed to operate in

isolation, and by doing so impact negatively on information flows within the sector.

However, belonging to business associations seemed to result in a higher propensity to

share information.

We also found evidence of small enterprises operating below their MES rather than

expanding and deepening activities. Enterprises owners had a tendency to diversify into

other markets. In aggregate, this had a profound effect on the market structure in

which MSEs operate and the potential for MSEs to spearhead market and sector

growth.

Most Group A enterprise owners undertook little market research, and often operate

without much market knowledge in terms of demand, financial assistance available and in

some cases competitive behaviour. Such a cocktail of risk taking, misinformation and

inappropriate evaluation is a recipe for disaster. Also, hidden in the data are some

individuals from this group who may be classed as potential entrepreneurs. More work is

being undertaken on this group.

Within Group B fewer entrepreneurs are risk takers and, on average, do not have true and

robust aspirations of owning large or even growing firms. Theymay have dreams of owning

large highly successful firms and high income but in reality their actions demonstrate they

simply want a quiet life and a sustainable income and the income to feed, clothe and

educate their families.

A third small group of entrepreneurs does however exist. These risk preferring

individuals do understand the market, gather accurate information and undertake business

decisions based on appropriate market signals.

8 CONCLUSIONS AND POLICY RECOMMENDATIONS

The results of our study shed light on Zambia’s missing middle via the growth trajectory of

these firms. Diversification into other low income generating activities does occur but there

is little evidence in our sample of deepening and investment.

Policy to support entrepreneurs needs to recognise this by developing differentiated and,

where necessary, overlapping instruments. A range of informal and formal networks also

need to be started or revitalised. For example microcredit institutions may be a viable

option for supporting survival entrepreneurs, but not for growth-orientated pioneering

ones.

Policies to support increased information flows would benefit all groups. Targeting

networking via strengthening of the current associations would help to reduce information

asymmetries.

Policy prescriptions also need to reflect the heterogeneity of enterprises not just in terms

of the sectors they operate in but also in terms of the aspirations and capabilities of owners.

Toolkits for identifying different types of entrepreneurs and their needs need to be

developed prior to targeting resources and developing incentives for the different groups.


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To facilitate this more statistical data and research on Zambian MSMEs are urgently

required to illuminate which groups of firms need to be targeted for growth, and to help

formulate appropriate policy and incentives for the different groups.

Our group of pioneering entrepreneurs lacked many entrepreneurial characteristics

and know how, but within this group there are enterprises or individuals with the potential

to become successful. If the potential of enterprises is to be unlocked, training on the

practice of entrepreneurship needs to be targeted towards training at the college and

university level rather than just concentrating on getting basic skills at the primary level.

One way this could be achieved is by introducing ‘practice of entrepreneurship’ modules,

involving local successful entrepreneurs, into programmes such as business and

engineering.

In order for more meaningful results to be obtained research needs to be extended to

include a large sample in each sector, so that specific sector opportunities and challenges

can be identified. This process is already underway.

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DOI: 10.1002/jid

enterprise development in zambia: reflections on the missing middle

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