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Archives of Business Research – Vol. 11, No. 3

Publication Date: March 25, 2023

DOI:10.14738/abr.113.14274.

Wood, V. R., Price, B. J., & Martens, H. (2023). Globalization in the 21st Century and Its Effects on Entrepreneurism and Innovation

Ecosystems: A Call to Action for Africa. Archives of Business Research, 11(3). 75-89.

Services for Science and Education – United Kingdom

Globalization in the 21st Century and Its Effects on

Entrepreneurism and Innovation Ecosystems: A Call to Action for

Africa

Van R. Wood, Ph.D.

Professor of Marketing, Philip Morris Endowed Chair in International Business and

Director-Center for International Business Advancement (CIBA – www.ciba.vcu.edu)

School of Business, Virginia Commonwealth University, Richmond, VA USA

Brandon J. Price, Ph.D.

International Professor of Entrepreneurship, Colleges of Business and Engineering,

Universidad Panamericana, Guadalajara, Jalisco, México, and President and Co-Founder,

Biogenin, S.A.P.I. de C.V., Guadalajara, Jalisco, México

Hans Martens, M.A

Political Science. Senior Advisor with the European Policy Centre, Brussels, Belgium.

Abstract

In this paper, we briefly discuss how globalization has, over the last thirty years,

influenced virtually every aspect of world political, economic, social and

environmental development. This discussion will set the stage for our overview of

innovation and entrepreneurism and economic development, gleaning insight from

a report from Ernst & Young (see The Power of Three 2013) and from another

report focusing data from 49 African countries (see - “Global Entrepreneurship

Monitor – 2018/2019 Annual Report”). This is then followed by insights

representing a “European perspective” on developing entrepreneurship in Africa.

Finally, we focus on what needs to be done to further grow entrepreneurism and

innovation in Africa and then provide a “call to action” to achieve this growth.

Keywords: Globalization, Innovation, Entrepreneurship, Economic Development

GLOBALIZATION - AN OVERVIEW AND INTRODUCTION

The 21st century has been characterized as the “Century of Technology”. The concepts of

knowledge, technology, entrepreneurship and innovation are central to the growing economic

doctrine - referred to as “innovation economics” – that positions them at the center of the

economic model, rather than as independent forces that are largely unaffected by economic

policies. The “economic doctrine” is now entirely global in nature. Globalization (although

being challenged by the rise of authoritarianism – see [5] - remains the “super story” of the 21st

century, and is the ultimate driver of entrepreneurship, innovation, and economic progress for

every country. The opportunity to “do good” and “do well” (make the world a better place,

while creating greater wealth and social justice) through global and regional trade is significant,

particularly in Africa [10].

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Archives of Business Research (ABR) Vol. 11, Issue 3, March-2023

Services for Science and Education – United Kingdom

To provide the context for the focus of this paper a brief looks at “globalization” is valuable. In

many respects, globalization is a singular force that has brought about a better life to billions of

people around the world. When the Berlin Wall fell in 1989 and the Soviet Union imploded in

2001-2002, the old super story of our time – communism versus capitalism (central planning

vs. market-based resource allocation) was replaced by the era of globalization where the

barriers and walls that divided our world for seventy-five years disappeared [4] [8] [9].

Globalization describes a process by which nations, businesses and people have become more

interconnected (economically, socially, and culturally) across the globe [22]. With the old

barriers removed, the impact of globalization has accelerated, driven by - 1) falling

transportation and logistics costs for goods, services, and people, 2) diminishing trade barriers

that portend lower tariff and non-tariff impediments to global business, 3) increasing abilities,

due to advanced technologies, to communicate information, ideas, innovations, and market

insights quickly and inexpensively around the world, 4) an expanding world of investors now

able to participate in a broader global arena in search of promising opportunities, and 5) a mass

movement of rural populations to urban areas in search of either education that could lead

them to the globalized world and/or better employment opportunities created by the

globalized world and the subsequent massive growth of new middle classes around the world

[32] [31]. The other side of this coin should not be totally discounted, however. The anti- globalists, authoritarians and naysayer to globalization’s benefits need to be included in the

story, lest what has been gained be lost (see – Kagan, 2018).

Notwithstanding the naysayers to this force, globalization means that hundreds of millions, if

not billions of formerly disenfranchised people can now compete in world markets and achieve

a better life. To fully understand globalization two things are useful – 1) a sense of the world

today from a broad-perspective and 2) a sense of the monumental changes happening in the

emerging markets of the world. Consider these realities. The percent of people living on one

dollar a day or less has dropped from 40% in 1981 to 18% in 2004 and is predicted to be less

than 10% by 2025 Over the last 25 years, China has lifted 400 million out of poverty (and

poverty is falling in countries housing 80% of the world population). During the same period,

two to three billion people have newly entered the world of business and trade. Goldman Sachs

(an investment bank) predicts that by 2040 five emerging-market countries – China, India,

Brazil, Russia, and Mexico will have a larger economic output than the G-7 countries - the 7

Western nations that now dominate global affairs including the US, Canada, Great Britain,

France, Germany, Italy, and Japan [32] [29]. In brief, globalization, over the last quarter century,

has allowed for the creation of enormous wealth and has given unprecedented opportunities

for a better life to billions of people around the world.

As stated previously, globalization has become the “super story” of our time. With this has come

the willingness of organizations of all sorts (for-profit, not-for-profit, multinational

corporations - MNCs, small to medium-sized enterprises - SMEs, non-governmental

organizations - NGOs, etc.) to venture out into the far reaches of the planet to capture markets,

secure supply alternatives, and aid those left at the “bottom of the pyramid” [21] [29], those

who might not have been considered as viable markets in the past. The U.S. and other

organizations based in the “developed” markets, in particular, began to expand overseas as

never before (realizing the 96% of the people and approximately 65% of the world’s productive

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Wood, V. R., Price, B. J., & Martens, H. (2023). Globalization in the 21st Century and Its Effects on Entrepreneurism and Innovation Ecosystems: A Call

to Action for Africa. Archives of Business Research, 11(3). 75-89.

URL: http://dx.doi.org/10.14738/abr.113.14274

resources lay outside the U.S. border [32] [30]. These “emerging markets” are now beginning

to be fully engaged in this expansion (both globally and regionally) driven by the spirit of

innovation and entrepreneurism and its perceived promise for growth and prosperity [29].

Africa is a prime example of such.

INNOVATION AND ENTREPRENEURISM AND ECONOMIC DEVELOPMENT IN AFRICA

How is “innovation” really defined, and how might that definition be used as a basis for

measuring entrepreneurial and economic development of a country, or a group of countries?

Countries with rapidly growing economies are today recognizing the pivotal role played by

entrepreneurs in initiating and sustaining high economic growth rates and are therefore

increasingly taking measures to foster greater entrepreneurship and innovation [1] [2].

One approach to understanding entrepreneurism is to examine the wealth of “best practices”

and “innovative initiatives” that countries can adapt to their own specific circumstances –

highlighted by the so-called “five pillars” of entrepreneurial ecosystems [24] - namely,

• Access to funding

• Entrepreneurship Culture

• Taxes and Regulation

• Education and Training

• Coordinated Support

With respect to entrepreneurial ecosystems, abundant information already exists on the G20

economies. Indeed, these economies have been scored across the five pillars listed above. For

the emerging markets, particularly those represented by African economies, which have a

continent-wide richness in resources – both natural and people – there is much to be learned

about how these best practices may be adapted.

There is no doubt that developing entrepreneurship will drive innovation, and this again will

be the way forward for modernizing Africa’s economies and thus creating wealth and improved

social conditions [13]. But groundbreaking initiatives must be taken by Africans in partnership

with meaningful and dedicated regional and global allies. Indeed, if this groundwork is not done

there is a risk that global entrepreneurism will favor other parts of the world where incentives

and human energy to realize such now exists (e.g., India, Latin America, S.E. Asia, etc.). This is

critical for African embrace of innovation and entrepreneurism lest it become dependent on

the old-fashioned style of economy that has long served “colonial” interests more than the

interests of the populations of African countries.

Creating ecosystems that will stimulate innovation and entrepreneurship will require many

efforts – from governments and markets, including focusing on future-related education, active

participation in the globalization process, creating an economic and social culture that

promotes risk-taking and creating legislative and regulatory systems that are conducive to

“idea generation” [18] [19]. These are all critical to innovation and entrepreneurship as they

attract the “capital” (both human and financial) behind the operationalization of ideas. Such

developments also call for renewed relationships with the G20 countries – not just in the form