Tag: Entrepreneurs

  • How Entrepreneurs Succeed When Resources Are Scarce

    How Entrepreneurs Succeed When Resources Are Scarce

    Why does effectuation and bricolage matter in developing economies? Entrepreneurship is widely recognised as a critical lever for economic growth and job creation, particularly in developing countries where formal employment opportunities are limited. Yet for many aspiring entrepreneurs, especially young people and graduates, the reality of starting and sustaining a business is shaped by severe resource constraints: limited access to finance, weak institutional support, and fragile economic conditions.

    A doctoral study conducted by The DaVinci Institute’s alumnus, Dr Jerimaya Mundondo, explored how entrepreneurs navigate these constraints and what enables some to move from intention to action, and ultimately to success. 

    Rethinking entrepreneurship in resource-constrained environments

    Traditional models of entrepreneurship often assume access to capital, networks, and stable markets. In contrast, entrepreneurs in contexts such as Zimbabwe and other developing economies must frequently “create something from nothing.” Dr Mundondo’s study argued that resourcefulness, rather than resource abundance, is the decisive factor.

    The research focuses on two entrepreneurial approaches particularly relevant to such environments:

    • Effectuation: starting with available means (who you are, what you know, and whom you know) and allowing goals to emerge over time, rather than pursuing fixed plans.
    • Bricolage: creatively recombining and repurposing existing resources to solve new problems, even when those resources were not originally intended for that use.

    Both approaches challenge the idea that entrepreneurship requires prior access to substantial resources.

    What the study examined

    Using a quantitative, cross-sectional research design, the study surveyed:

    • Nascent entrepreneurs (students from two universities), representing individuals still forming entrepreneurial intentions or beginning early activities.
    • Emerging entrepreneurs (members of the SME Association of Zimbabwe) represent individuals already engaged in venture creation and growth.

    In total, over 900 respondents participated. The study examined how effectuation and bricolage influence:

    • Entrepreneurial intentions: the desire and commitment to start a business
    • Entrepreneurial behaviour: concrete actions taken to create a venture
    • Perceived entrepreneurial success: entrepreneurs’ assessment of venture progress and outcomes

    Advanced statistical techniques, including regression analysis and Partial Least Squares Structural Equation Modelling (PLS-SEM), were used to test the relationships.

    Key findings

    The results reveal a nuanced picture of how resourceful behaviours operate at different stages of the entrepreneurial journey.

    For nascent entrepreneurs:

    • Both effectuation and bricolage positively influence entrepreneurial intentions.
    • Bricolage also supports early entrepreneurial behaviour, helping individuals act despite limited resources.
    • However, effectuation did not significantly influence behaviour at this early stage, suggesting that planning flexibility alone may not be enough to trigger action without hands-on resource improvisation.

    For emerging entrepreneurs:

    • Effectuation strongly influences both entrepreneurial behaviour and perceived success, indicating its importance once ventures are underway.
    • Bricolage plays a more limited role at this stage, showing weaker and sometimes insignificant effects on behaviour and success.
    • In short, bricolage appears especially valuable for getting started, while effectuation becomes more important for sustaining and scaling entrepreneurial activity.

    Bridging the intention-action gap

    One of the study’s most important contributions is its insight into the intention-behaviour gap, a well-documented challenge where many individuals express a desire to start a business but fail to act.

    The findings suggest that resourceful behaviours help close this gap by:

    • Reframing how entrepreneurs perceive constraints
    • Reducing dependence on external funding
    • Encouraging experimentation, partnerships, and incremental progress

    Rather than waiting for ideal conditions, entrepreneurs who adopt effectuation and bricolage act with what is already available.

    Why this matters for policy and institutions

    Dr Mundondo’s study concluded that entrepreneurship support in developing economies must move beyond access-to-finance narratives. Instead, institutions, universities, and policymakers should actively cultivate resourceful entrepreneurial mindsets.

    Key implications include:

    • Embedding effectuation and bricolage into entrepreneurship education
    • Designing incubators and accelerators that emphasise experimentation and partnerships, not only funding
    • Creating policy environments that recognise informal resource mobilisation as legitimate entrepreneurial practice

    A shift in how success is enabled

    Entrepreneurship in resource-constrained environments is not primarily a story of shortage; it is a story of ingenuity. This research demonstrates that when entrepreneurs learn how to think and act resourcefully, they are better equipped to turn intentions into action and action into impact. In contexts where resources are scarce, how entrepreneurs think about resources may matter more than how many they have.