Why Self-Employment Entrepreneurship is Worth Less to Less-Developed Countries

Abstract

Developing countries have been advised to promote small enterprises because they generate employment. It is even said that small-enterprise jobs cost less than jobs created in larger enterprises. Governments have invested a lot of funds in the training of entrepreneurs and in financing their small enterprises, in most instances, to the exclusion of promoting large enterprises. But, is this the most optimal strategy? Some researchers do not think so. Large enterprises, through corporate entrepreneurship and intrapreneurship, are better able to innovate, create more lasting jobs; and should their employees set up their own enterprises, these tend to create more jobs and their survival rates are higher. In this era of globalization, it is important to attract into countries, enterprises that are good at both technology and product innovation. It is such enterprises that determine the growth of economies. Small-enterprises are initially imitators before they are innovators. So, economies with few or no large enterprises, lack adequate innovation, hence, will lack adequate growth. The study is conceptual, and reviews the relevant literature on intrapreneurship, corporate entrepreneurship and self-employment entrepreneurship. The following conclusions are highlighted: 1. Due to globalization, corporate entrepreneurship and intrapreneurship provide better opportunities for innovation and growth than self-employment entrepreneurship; 2. Developing countries need to increase investment into general human capital development; 3. Promotion of larger enterprises will enhance the development of specific human capital; 4. This strategy will improve the development of both nascent intrapreneurship and nascent entrepreneurship. These strengthen both the large corporate sector and the small-scale sector.