NURTURING LATENT ENTREPRENEURSHIP AND THE GROWTH OF SMALL FIRMS IN ZIMBABWE

Abstract

The phenomenon of small firms located in industrial clusters is widespread in many countries, particularly in Italy, Brazil, Mexico, Peru and India as well as in some African countries such as Kenya, Tanzania and Ghana. These firms have made significant inroads on the global supply chain for various products such as fashion consumer goods, shoes, garments, precision surgical instruments and construction tiles. The purpose of this study was to determine the extent and significance of small-firm clustering in Zimbabwe and the factors that contribute to the growth and dynamism of the firms in these clusters with a view to recommending ways in which entrepreneurship among these firms could be nurtured further. The cluster was modeled as an Entrepreneurial Technological Regime wherein it was proposed that the growth and success of the firms depended on the existence of an enabling environment which allowed the constant acquisition and diffusion of knowledge (technological capabilities). The study used a questionnaire that was distributed to a sample of 608 small furniture manufacturing firms selected from a population of 2 144 firms located in clusters in the five major cities of Zimbabwe. The study also used results from focus group discussions and interviews with owner-managers of firms at the Glenview cluster in Harare. The study arrived at there conclusions: the firms in Zimbabwe‟s clusters are micro-enterprises (very small entities) that are “isolated” in that they lack access to new technology and capital; the firms are, however, worthy candidates for policy intervention because they possess various collective attributes that place them at an advantage over other SMEs; and the clusters possess the characteristics of complex adaptive systems (phenomena with emergent properties), therefore any policy interventions would be more effective if they iv were directed at the cluster as a whole or groups of firms within the cluster rather than at individual firms. The study therefore recommended that measures be taken to attract long-term capital (debt and equity) into the cluster by introducing the firms to the capital markets and also bring in new technological capabilities from outside the cluster by forging technical alliances between the firms in the cluster and other firms outside the cluster. This should be done within a framework that fosters a strong private-public partnership in which the private sector takes the leading role and involves the participation of the cluster members and the local authority.