Capital is not enough: innovation in developing economies

Article Type: Abstracts From: Development and Learning in Organizations, Volume 26, Issue 6

Bradley S.W., , McMullen J.S., , Artz K. and , Simiyu E.M. Journal of Management Studies, June 2012, Vol. 49 No. 4, Start page: 684, No. of pages: 34

Economic development and social entrepreneurship often conceive of poverty as a resource allocation problem in which a lack of capital prevents the poor from increasing their income through entrepreneurship. This allocative view, however,represents only one possible approach to conceptualizing entrepreneurial opportunity. The alternative discovery- and creativity-based views place a greater emphasis on innovation, which implies that superior ideas are also needed if poverty is to be reduced through firm performance. Drawing from a survey of 201 small business owners involved in a microcredit programme in Nairobi, Kenya, we find that the financial, social, human capital performance relationships are mediated in part by innovation. Further, we find that differentiation-related innovations lead to better firm performance than novelty-related innovations. ISSN: 0022-2380 Article type: Research paper Reference: 41AN100

Keywords: Capital, Developing countries, Entrepreneurship,Expertise, Innovation