Unlike many places in the world where ideas drive innovation and entrepreneurship, it seems that in Liberia, entrepreneurship is mostly born out of necessity as opposed to opportunity.

I will explain more on this later.

It baffles me every time I talk to a young person about starting a business and they ask, “Where do I find the money to start?” What I think they should really be asking is, “What are some good investment opportunities to consider?”

You’re more likely to hear a professional who has saved about US$1,000 talking about starting a business than a college student studying for a degree in Business Management. Why is that? Every good business starts with a good idea. Ideas drive innovation and business startups, and they can also attract financing.

Real entrepreneurship is called innovative, creative or disruptive for a reason. People are more willing to invest in business ideas that solve challenges and add value. They are less interested in investing in another boutique or sports bar (no offence to owners of these) that cannot distinguish itself from competitors in the marketplace.

To start a business, you need an idea that makes business sense, solves a social problem or changes a system.

Money alone won’t make you money. It is the idea and the business built around it that generate a return on investment, not the other way around. If your intention for going into business is simply to get by, your business may never grow beyond the micro level.

An Academic Exercise

Back in 2015, when I was studying for my master’s degree at Huazhong University of Science and Technology in Wuhan, China, I became intrigued by this exact topic:

Why are most Liberian-owned businesses micro or small, and why do so many operate in retail, catering or entertainment?

I teamed up with my supervisor and some Liberian intellectuals to explore the root causes of this issue. I was of the opinion that if we could understand the factors that shape people’s intentions, we could begin to understand the entrepreneurial behavior that follows.

My specific interest was to understand to what extent Liberians were “entrepreneurial” and “enterprising.”

The study was titled An Evaluation of Factors that Influence Entrepreneurship Intentions in Liberia and drew on observations from intention-based models, particularly Ajzen’s Theory of Planned Behavior and Shapero’s Entrepreneurial Event Theory.

The Model of the Study

The model was based on conclusions from several intention-based studies and grouped the factors influencing entrepreneurship development into four major categories: intention-based, psychological, demographic and external resource-based factors.

Initially, the model also included an assumed link between entrepreneurship and economic growth. This path was eventually abandoned because obtaining reliable economic data was a major challenge. Various studies have attempted to link entrepreneurship to economic growth, focusing on how individual-level entrepreneurial activity connects to aggregate economic outcomes. This includes consideration of personal, cultural and institutional conditions, as well as intermediate linkages such as innovation, variety, competition and entrepreneurial effort, as proposed by Carree and Thurik (2002). Although my study did not examine the actual entrepreneurial behaviors of Liberians, the examination of the factors determining entrepreneurial intentions served as a first step toward understanding how Liberians form those intentions. The goal was not only to identify factors that influenced entrepreneurial intentions in Liberia, but also to compile useful information that could serve as a catalyst for further entrepreneurship research in Liberia. Read the details of my findings in “An Evaluation of Factors that Influence Entrepreneurship Intentions in Liberia“

Findings From the Study

The study revealed two key findings. First, unlike contexts where opportunity and ideas are major drivers of entrepreneurship, money appeared to be a significant precipitating factor of entrepreneurial intention among the population studied. About 79.7% of respondents strongly agreed that if they had physical cash, they would invest in a business.

Second, the study provided some support for a common perception that many Liberians prefer employment to starting a business. More than 50% of respondents in the sample preferred a stable source of income through employment rather than starting a business.

The variable Attitude Towards Employment, which tested individual beliefs and attitudes toward employment, had a negative correlation with the dependent variable, Entrepreneurial Intentions (-.141, p<.001). This implied that where individuals had a stronger preference for employment, their intention to start a new business tended to be lower.

Read the details of my findings in An Evaluation of Factors that Influence Entrepreneurship Intentions in Liberia.

Limitations of the Study

This study is not a definitive conclusion on how entrepreneurial intentions are formed in Liberia. It is an analysis of how the population under review viewed entrepreneurship. More research needs to be done to establish a robust model of entrepreneurship development in Liberia. The study also had several limitations. When I conducted the research, I was living in China. My distance from Liberia was a major limitation and contributed to some of the challenges with the quality of the data. The sample contained individuals with different backgrounds, education levels, experiences and physical locations. There was also a possibility that some respondents misunderstood questions on the questionnaire.

On the other hand, the study helped paint a picture of where Liberia was in terms of entrepreneurship development at the time. It suggested that there was still considerable work to be done to develop the next generation of Liberian entrepreneurs. I personally don’t think becoming an entrepreneur is simply a matter of personality, although personality can play an important role in an individual’s decision to become one. For Liberia especially, I think it is also about having access to the right information and training to develop the mindset and attitudes required for entrepreneurship.

In this study, for example, 98% of respondents agreed that “it is important to introduce career development programs in high school.” If you went to high school or completed your undergraduate education in Liberia, you may agree that our education system does not always help us intentionally develop our career paths. Many of us choose career paths based on feelings or assumptions about those careers rather than careful consideration of our strengths, weaknesses and opportunities. Some of us stumble onto a path and discover that we like it, so we stay, like me. Others simply go with the flow, and sometimes, before we know it, we find ourselves stuck in careers that don’t fit us.

In Conclusion

The growth of Africa as a whole, and Liberia in particular, depends significantly on the development of its industries and entrepreneurs.

Much of the development conversation has moved from aid toward empowering the private sector as an engine of growth and change. Increasing attention is being placed on strengthening the capacity of individuals and enterprises to drive economic development.

It is therefore important to understand the factors that influence entrepreneurial intentions and behaviors in Liberia and how these factors may ultimately affect economic growth. In this study, physical cash emerged as an important precipitating factor of entrepreneurial intention. It is concerning to see entrepreneurship reduced largely to trading and survival. However, there is still hope.

We can change this narrative and develop the next generation of Liberian entrepreneurs through more extensive research, better information and training tailored to the needs of the Liberian population.

This research provides one source of information for understanding entrepreneurship development in Liberia. It offers a snapshot of how the population studied responded to entrepreneurship and provides a starting point for examining whether commonly identified determinants of entrepreneurial intention apply within the Liberian context.

In later articles, we will explore ways to start businesses with little or no initial capital, identify businesses that can be started without huge upfront investments, and share stories of people who have built businesses with limited initial capital.

If this article was useful, please let me know in the comments.