Ethiopia is the most populous country in Africa with population of around 130 million people where more than 70 percent is below the age of 30. This indicates the country has abundant labor force and market potential who consume products supplied by agriculture and manufacturing sectors.
To utilize the labor potential effectively and efficiently providing training to the youth is essential. To that end expanding educational institutions which provide vocational trainings which enhance entrepreneur skills is essential. However, though the number of youth graduating from training schools annually is increasing only few of them are able to monetize their skills and generate income.
Tamrat Taddese is an economist working as consultant for various firms particularly in absorbing skilled youth.
In an interview with local media, he said that, starting and running a business is a vital ingredient of economic growth and development. They contribute to innovation, and they are central to dynamic socio-economic competition and broader economic dynamism.
The sector has linkage with production and productivity and breaks the traditional way of production contributing for sustainable economic growth. In addition demand-driven entrepreneurship is positively linked with growth.
On the other hand, technological advances in the manufacturing sector create a lot of opportunities for innovative entrepreneurs. Entrepreneurs for the country which critically aspires to attain structural change play pivotal role. They help the nation to adopt technologies and produce machineries and substitute imports which intern save hard currency that would have been spent for imports.
As to him, in the last half a century, trained workforce usually tended to look for employment in the public sector. Such culture brought its own draw back in unleashing their potential to change their knowledge and skill in to wealth. On the other hand, the impossibility of securing loan from banks for initial capital to start business hampered them. While some started work by securing loan from their parents others remained idle. Such kind of trend should be reversed.
According to the Ministry of labor and Skills, the government in collaboration with other stakeholders provides incentive through preparing platform for competition to encourage the youth creativity and job creation. After the sample products pass through appraisal of industrialists, the winners obtain funding up to a million birr as an initial capital.
Currently many Entrepreneurs who obtained financial reward have started business and through time created job opportunities to other unemployed youth. They were also able to secure additional loan from banks for expanding their business and accumulate capital.
The Commercial Bank of Ethiopia and other private banks in these regard are playing pivotal role in sponsoring the competition.
The role of entrepreneurship in economic growth and development in most developing countries is immense. It enables to reduce poverty and maximize income generation of the youth. Entrepreneurship plays pivotal role for the emergence and development of a vibrant private sector and it has been indispensable ingredient of sustained growth.
Birhanu Muluneh is an expert in Information Communication and Technology and has his own company. He said that, in line with the flourishing of traditional entrepreneurship the advent of digital entrepreneurship in recent years broaden the chance to create job opportunities without physical contact.
Young professionals create application on their mobile phone and in addition to communication they used it for making business and such venture brought a glimpse of hope for the unemployed youth with semi and advanced skills. Information and communication technology (ICT) or digital technology has drastically reduced the cost of starting business since it reduces the need for offices and other furniture.
Talented individuals who become game changing innovative entrepreneurs have plenty of opportunities as highly paid workers.
According to Berhanu, the entrepreneur has been a fundamental agent in most production, distribution and growth. The firm of the innovative entrepreneur will, consequently, grow through the dual process of taking market share from existing suppliers and increasing overall demand for the products offered in the market.
He further said that, the greatest significance of entrepreneurship is to help identify and develop the managerial capacities of entrepreneurs. Obviously, entrepreneurship promotes economic growth, provides access to goods and services, and improves the overall standard of living. Entrepreneurs are recurrently credited as major drivers of economic growth, accelerate transformation, create new markets, wealth and innovation. Entrepreneurs often generate key ideas to bring solutions to problems while creating new products. .
They are also leaders who have the freedom to build the company, products, and develop team culture they want.
Entrepreneurship can start as a small business, but the goal is to capture market share and seek high profits.
An aspiring entrepreneur actively seeks a particular business venture and it is the entrepreneur who assumes the greatest amount of risk associated with the project with a view to benefitting stake holders.
It is obvious that Ethiopia is one of the pauperized nations in the world. Nevertheless it has abundant natural resources including excess labor, land, water and mines. But due to the shortage of capital, technology and trained labor, the nation suffers from poverty and disadvantages of opportunities. Poverty creates helplessness and when the youth fail to get employment or start their own job after they graduate they might resort to engage in criminal activities or may join armed opposition groups.
This further exacerbates poverty and hopelessness. To reduce the growing unemployment the emergence of ICT brought multifaceted chance to create job opportunity. The government aspires to adopt and advance ICT technology through importing and adopting innovative technology. The venture of Ethio- telecom in introducing new technology plays pivotal role in producing professionals with entrepreneur skills.
The ICT technology in addition to facilitating communication it has power to reach the marginalized community who have resources that can be tapped but due to distance unable to supply their products to consumers. The technology connects consumers and sellers with in shorter period of time. It also severs unwanted value chain manipulated by brokers.
The agriculture sector still contributes more than 45 percent of the Gross Domestic Product and is a means of living for 85 percent of the labor force. But the contribution of the manufacturing to the GDP is less than 10 percent. Such situation hampers the nation’s aspiration to attain transformation. The agriculture sector is rain fed, vulnerable to climate change and global warming. The agriculture labor engagement is less than 6 months and after the harvest until the rainy season is coming it will remain idle which again is a loss for the economy. To attain economic transformation the rural labor should be relocated and the percentage of the working force engaged in agriculture should be in favor of the number of working force in manufacturing. Expanding manufacturing inturn create opportunity for entrepreneurs. The level of economic development of a country can also affect whether entrepreneurship will lead to greater economic growth there. According to Berhanu, traditional investors looking on existing products and services, while entrepreneurs look to introduce new ones. However, small business owners can be entrepreneurial in their own way and entrepreneurs may end up as small business owners if their idea catches on.
An entrepreneur is someone who works within a larger company.
It is obvious for the nation which aspires poverty reduction and eradication to create job opportunities to the unemployed. The task of job creation should not rely on the government. Because its revenue collecting capacity is lower than the other developing countries and still suffer from budget deficit. Hence the private sector with immense potential is expected to fill the gap in which entrepreneurship is part of it.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD FRIDAY16 MAY 2025
