In this very inspiring write up, Ashoka ChangeMaker Scholar SHUDZEKA E. TEWIY establishes the relationship between productivity decline and entrepreneurship. He posits that young Cameroonian entrepreneurs suffer from information asymmetry and makes insightful proposals for the way forward.
Productivity could be defined as the quantity of goods and services that a worker produces per unit of time with the skills and tools available.
A decline in productivity has tremendous effects on the living standards of any people. A decline in productivity means a decline in real income. This reduces the power of purchasing goods and services; reduces access to good health and housing; reduces access to quality education; and reduces an individual’s ability to contribute to social programs of his community.
When productivity drops, many people lose their jobs, leading to a rise in unemployment, underemployment and vulnerable employment. This leads to a drop in social security of the individual as it leads to a drop in pension schemes. Also, it could lead to a rise in crime wave and prostitution as many individuals turn to these unorthodox modes of making a living.
A decline in productivity may have a positive effect on the environment. There will be a drop in pollution from companies that have large wastes and discharges. This inadvertently increases the health of the community and leads to a more stable ecosystem.
A drop in productivity results to fewer goods and services being provided. Important goods, essential services and foodstuffs become scarce. Inflation due to the demand pull rises. Prices for goods and services become unnecessarily high. People with low income cannot live decently and provide for themselves and their families. Also, there is resultant fall in productivity of other companies that rely on the goods produced by the primary producers to render their services. It then becomes a chain reaction in which individuals find themselves in a vicious cycle.
In some countries, companies are imposed obligatory corporate social responsibility as part of their agreement to operate in such countries. A drop in productivity will lead to a drop in the provision of such social facilities like provision of good drinking water; building of decent roads; building and equipping of hospitals and schools. Individuals obtaining these facilities at subsidized rates will face a lot of difficulties.
A fall in productivity of a firm concomitantly results to a drop in its profitability. This reduces state income since these companies pay taxes to the government. The government’s ability to provide services to its citizens drops. A drop in living standards is the natural result.
Therefore raising productivity—and ultimately, economic growth—is the only way of achieving substantial and sustained reductions in poverty and improve the living standards of a community. And that is where entrepreneurship comes in.
Entrepreneurship is the development of a new product, the discovery of a new market, the starting and managing of a new venture or innovation in an organization (Shumpeter, 1934).
Entrepreneurship is one of the major sources of wealth creation for an individual, a community or a country as whole. For an individual who creates a business, entrepreneurship is a source of employment for him. The income generated from the business goes to increase his living standard and that of his family. The opening of such businesses creates employment for others as the entrepreneur takes on others to work with him.
Entrepreneurship is a major source of income for a government as it collects taxes on these businesses. These taxes are then used by the government to improve social facilities of the country such as building roads, hospitals, schools, etc.
As is the case with any business, entrepreneurship serves the community by providing essential goods and services. This will help to increase the economic activities of the community, as other businesses may be derived from these new organizations such as suppliers and retailers.
Entrepreneurship could be major source of income for people of disadvantaged and marginalized backgrounds. Entrepreneurship therefore could provide a means of mainstreaming and bringing back marginalized groups into the society.
Entrepreneurship especially amongst the youths could help reduce delinquency and other societal ills such as theft, drugs and terrorism. When young people are actively engaged in gainful self-employment, they are less tempted to join terrorist groups.
To the young people, entrepreneurship could be seen as a means of developing self-esteem, giving them a sense of pride in what they are doing. Through entrepreneurship, the young are given a sense of identity and are accepted as valued members of the society.
Entrepreneurship could be a mechanism for promoting advocacy and building resilience amongst youths (OECD, 2001; White and Kenyon, 2000). It helps young people to find solutions to societal problems by experiential learning and increase their innovative spirit. This could be particularly good for the society as these young people will lead change actions that could lead to the production of new goods and the re-engineering of societal structures.
What then is the issue with youth entrepreneurship in Cameroon?
Our major issue is information asymmetry. Youths in Cameroon are willing to go into self-employment (Neneh, 2014). However, most youths do not have any idea what they could earn as self-employers. They do not have information on the procedures to create a business, the legal implications and where to source for information. More so, they have no idea on where to obtain capital to grow their businesses.
Of course most of this information is available, but how readily available it is brings to mind several questions. The Cameroonian legislation changes every year, and some government workers use this to their corrupt advantages. For example, few young entrepreneurs are aware of the fact corporate taxes have been reduced from 38% to 30%. Nobody is taking advantage of this information!
The way forward will be to create a forum for information dissemination. Information on the economy, changes in legislation, new opportunities and others should be shared. Advocacy should be promoted on such a forum, where entrepreneurs share information on the problems they faced and the models that worked.
Here I wish to laud the efforts of the creators of wealth farm for thinking of such a forum. Visit www.wealthfa.net if you need to access information and talk with a mentor. Continue to read our blogs on Ashoka Changemakers Cameroon to get updates on the economy in Cameroon and how to position your business vis-à-vis the economic changes.
Neneh, B.N. (2014). An Assessment of Entrepreneurial Intention among
University Students in Cameroon. Mediterranean Journal of Social Sciences, Vol 5 No 20
OECD (2001) Putting the Young in Business: Policy Challenges For Youth
Entrepreneurship, Paris: OECD
Schumpeter, J.A., (1934) The Theory of Economic Development, Cambridge, MA:
Harvard University Press
White, S; Kenyon, P (2001). Enterprise based Youth Employment Policies, Strategies and Programs. . ILO: Geneva
Written by Shudzeka Eric Tewiy, MBA
Treasury Accountant, Bamenda Airport
National Training Officer, Association of African Entrepreneurs, Cameroon
Ashoka Changemaker Fellow, 2015
Winner of UN online volunteer of the year award, 2013
E mail: email@example.com