Rural Startups in an Emerging Market: An Examination of the Entrepreneurial Ecosystem in Rural Areas of Uganda

Rural Startups in an Emerging Market: An Examination of the Entrepreneurial Ecosystem in Rural Areas of Uganda

Isaac Wasswa Katono
Copyright: © 2024 |Pages: 26
DOI: 10.4018/979-8-3693-0477-8.ch013
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Abstract

This study investigates factors that constrain the development of rural startups in the Ugandan rural entrepreneurial ecosystem in light of the importance of entrepreneurship in reducing poverty worldwide. Based on a review of the literature on entrepreneurial ecosystems, necessity, and opportunity entrepreneurship plus a range of theoretical approaches, the study demonstrates that the characteristics of the rural population, the social cultural context, and the lack of physical infrastructure greatly constrain the start and growth of rural startups. Recommendations as to what should be done to promote rural startups are proposed.
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Introduction

There is a consensus in the literature that a positive relationship exists between the creation of new entrepreneurial projects and the development of a region or country (Audretsch & Keilback, 2007). According to Sutter et al., (2019), entrepreneurship has the potential to alleviate rural poverty. In their review of over 200 articles from 77 journals covering the period 1997-2017, these authors’ analysis reveals three different perspectives through which entrepreneurship alleviates poverty. The first is poverty alleviation through entrepreneurship as remediation (actions that address immediate resource concerns). This perspective assumes that poverty is a result of a lack of resources, thus a provision of these resources will enable entrepreneurship to flourish. The second perspective is that of reform (actions that address institutional changes). It assumes that markets are potential engines of poverty alleviation, hence the issue of market access comes to the fore. The third perspective is revolution (actions that change the underlying capitalist assumptions of business). This perspective argues that poverty alleviation will occur if different economic models are devised and scaled through entrepreneurship.

Do Entrepreneurs Need Democratic Space?

Entrepreneurs should subscribe to the basic tenets of economic democracy, without which they would not survive. Democracy guarantees the right of everyone to participate in social-economic activities, and to own and use private property (Ummatovich et al., 2020). According to Gomez and Korine (2008), there is an iterative bond between work and private property, which means that people can only acquire property through work i.e., work legitimizes private property. Hence entrepreneurs need an efficient policy concerning the efficient and rational use of labor, which can only be guided by effective legislative laws as those espoused in a democratic environment. Democracy enables the creation and fostering of competition, or a market economy; this competitive environment fosters innovation, as entrepreneurs fight to attract and retain customers, to the benefit of society (Ummatovich et al., 2020). In effect, entrepreneurs do influence the socio-economic life of a community through the formation of a market economy.

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