How Uganda Became World’s #1 Entrepreneurial Country

They say necessity is the mother of invention. In Uganda, necessity seems to have another offspring, nearly a twin to invention: entrepreneurship.

Last year, Ugandans were surprised to find out the nation was ranked number one in entrepreneurship. The Global Entrepreneurship Monitor (GEM) ranked 73 nations for levels of entrepreneurship, and it turns out Ugandans are  a pretty entrepreneurial lot.

The definition of an entrepreneur used by GEM – an owner or co-owner of a small business that pays employee salaries for more than three months but less than three-and-one-half years – would disqualify world-renowned business leaders like Steve Jobs, Bill Gates, Richard Branson, or even Africa’s own, Aliko Dangote. Uganda may not have a representative in those stratospheric heights (and in reality, the majority of countries don’t), but GEM’s definition really lends itself to looking at entrepreneurial spirit rather than individual greats. How much are people willing to try, to take a risk, be inventive, and to have the confidence to enter the marketplace.

It turns out that in Uganda, more than one-quarter of the workforce have started their own businesses in the last few years. That’s right, a whopping 28% have taken matters into their own hands and created jobs for themselves and many times for others as well.

Which brings us back to the mother of invention and entrepreneurship: necessity. According to the United Nations, Uganda is the world’s most youthful country, with 78% of the population under 30 years old. Uganda’s youth bulge is real, and traditional means for job creation cannot address a bulge of that size.

From that necessity has come entrepreneurship. Over the past several years Uganda has stressed the need for entrepreneurship as a means to create jobs, both for the entrepreneur and for the people the entrepreneur hires. If 28% of Ugandans in the workforce are considered entrepreneurs, even if each of them hired just one person, that would mean 56%, or more than half of all jobs in Uganda come from entrepreneurs. Since most businesses would have more than one employee, the number of jobs created by entrepreneurs is likely much higher.

Necessity determined that with Uganda’s youth bulge, the government needed to stress entrepreneurship, but for the individual, necessity isn’t just an abstract census number or an economic solution. It is the necessity of finding a job or feeding your family. Or the necessity of finding a solution to a problem. Entrepreneurs see a need to fill, either in themselves and their own lives or in the world around them.

After Uganda, GEM’s other top ten entrepreneurial countries are Thailand with 16.7% of its workforce, Brazil with 13.8%, Cameroon with 13.7%, Vietnam with 13.3%, Angola with 12.4%, Jamaica with 11.9%, Botswana with 11.1%, Chile with 11%, and the Philippines with 10.5%. What do these top ten have in common? They all are developing nations with significant youth bulges causing high unemployment and where striking out on your own might be the best path for employment. That’s the necessity. But if necessity were all it takes, then the top ten list would include the world’s poorest nations. Perhaps necessity isn’t the only requirement.

Business needs stability, it needs infrastructure, and a means for communication to conduct trade, placing orders, dealing with customers, and such. The top ten entrepreneurial countries all have political stability – there is little threat of upheaval and the government acts in predictable ways. They also have strong telecommunications infrastructure and most have good internet connectivity, power and adequate roads.

If political stability, infrastructure and a means for communications were all that were needed, then how could the United States and Europe score so low? Only 4.3% of the American workforce are entrepreneurs, 2% of Spaniards, 1.7% of French, and 1.3% of Italians.

These markets have all the positives, but not enough negatives to create the drive and hustle to spur entrepreneurship. Unemployment is low, so why take the risk to open your own business when someone else will pay you to work in his.

We always look towards the big, industrialized nations and wish we were like them. But maybe we are wrong. Maybe we should count our blessings: we have stability and adequate infrastructure and communications for business, and we have the mother of invention and entrepreneurship: necessity. And from that combination, we are the top entrepreneurial country in the world.

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