Entrepreneurs in Emerging Economies

Research shows that small businesses are very important for a country’s economic development. Entrepreneur and professor of management at West Chester University Hung M. Chu has undertaken the first systematic examination of entrepreneurships and economic development in several emerging economies of Africa, North and South America, Asia and Europe. With 18 years of research, Chu has identified what motivates entrepreneurs, the challenges they face in their respective countries, and what needs to be done to encourage small businesses in developing economies.

Chu began his research in his native Vietnam, where he cites a long history of government ownership of the land as the key obstacle to developing entrepreneurship there. “To borrow money and start a new business, a person needs collateral, which has not been possible under the circumstance,” he says.

In his recent article entitled “An Empirical Study of Nigerian Entrepreneurs’ Success, Motivations, Problems and Stress,” Chu provides insights into the motivations behind Nigerians’ business ownership and the challenges facing small companies despite their significant contributions to that country’s economy.

He found that Nigerians are similar to American entrepreneurs in that they start a business to be their own boss, and they resemble British and Australians because they also are motivated by monetary rewards and profits. Like entrepreneurs in other emerging economies, the Nigerians who desire to start their own businesses face serious challenges, such as a poor infrastructure, lack of access to short- and long-term financial capital, and undependable employees. The most serious problem for small businesses in Nigeria, says Chu, is the government.

“Despite the fact that these entrepreneurial ventures represent 50 percent of Nigeria’s employment and industrial output, the government neither supports nor is interested in developing programs or lasting policies to support them,” he notes.

Chu recommends a number of steps be taken in addition to the improvement of infrastructure. He believes that the government should become a customer for small businesses’ goods and services, and that a business network be developed so entrepreneurs can share information about sources of financial support, quality personnel, the market and supplies of raw materials and equipment. He also points out the need for training potential entrepreneurs and providing sufficient incentives and support to encourage the establishment of more enterprises. Finally, he concludes, “A class of well-trained, highly motivated entrepreneurs could lead to a higher level of growth in Nigeria’s economy.”

Chu’s findings are based on face-to-face interviews with 243 entrepreneurs in Lagos, the former capital and currently a key economic center of Nigeria. Subjects were randomly selected through the city’s chamber of commerce directories and surveys were conducted by a trained Nigerian graduate assistant.

The subjects were asked to indicate their educational background and business experience, their motivations and daily challenges. Sources of stress and business-related stress were also investigated. The majority of entrepreneurs interviewed were married men who had completed some graduate work and established their businesses themselves. Most worked in the service industry and had fewer than 10 employees.

A member of West Chester’s College of Business and Public Affairs since 1976, Chu is the founder and first president of the Vietnamese Chamber of Commerce of Greater Philadelphia and founder and executive director of the Small Business Institute at the University. He has owned several businesses in New York and the Philadelphia area and consulted for such organizations as the Indochina Economic Development Center and the Indochina Action Center, both in Washington, D.C. In addition he has conducted market research and strategic planning for many small and medium size businesses in the Delaware Valley.

A graduate of St. Joseph’s College in Rensselear, Ind., where he received a bachelor’s degree in business administration, Chu earned his M.B.A. in finance from Northern Illinois University and his Ph.D. in strategic management from Louisiana State University.