Case of the leather sector in Ethiopia

Abstract

Entrepreneurship has played an important role in economic growth, innovation, competitiveness and in poverty alleviation. Today’s dynamic, global, and challenging business environment requires a firm to be entrepreneurial if it is to survive and grow. Rapidly changing technology and shortened product life cycles support the need for a firm to be innovative and develop new ideas, products, and processes, and be willing to take risks to cope with rapid change. Increased domestic and global competition amplifies the need for a firm to stay ahead of competition. In dynamic business environment, Small and Medium Enterprises (SME’s) must make competitive changes in order to move forward. The capacity to seize on an opportunity depends on the level of entrepreneurial orientation that a firm possesses (Waldron, 2004). This is because direct entrepreneurial orientation is associated with innovation, proactive and the willingness to take risk which is an important measurement to a firm when implementing a certain strategy to compete with opponents. This study investigated the degree of Entrepreneurial Orientation (EO) of thirty footwear manufacturing Small and Medium scale Enterprises (SMEs) in Addis Ababa. This study deals with the five dimensions that are critical to entrepreneurial orientation: innovation, pro-activeness, risk taking, competitive aggressiveness, and autonomy in relation to small & medium leather footwear manufacturing enterprises in Addis Ababa. And finally come up with the information that to what extent the investigated enterprises are aware of EO and practice it. Qualitative and quantitative techniques were applied for data analysis. Findings showed about 80% of SMEs in AA represented moderate and above moderate level of EO. From the five dimensions: Proactiveness, innovativeness, risk taking competitive aggressiveness, and autonomy, the autonomy and proactiveness dimensions are the most and least exercised ones by the respondents taken in this study. Results further indicated there were moderate responses to the rest dimensions. This study could be useful for policy makers to plan their activities towards entrepreneurship development of SMEs in AA. It is hoped that the findings of this study discussed here can benefit the government, entrepreneurs, other researchers, and important parties in the field of entrepreneurship.

Keywords: Small & Medium Scale Enterprises (SMEs), Entrepreneurial Orientation (EO)