Improving access to post basic education has been a high priority for most of the government, which would also like to expand the higher education sector in order to widen access to higher education and meet need for highly trained personnel. Public resources are tight, however, and so Higher Education Institute have to try to meet expectations regarding research and innovationwith very limited budgets. Proper guidance and better regulations are needed to support their attempts to enhance the development of research and innovation.

The higher education system is expanding in size, but it remains small by regional standards. 

There are also some serious concerns about its quality. While various policy dialogues between the government and its development partners have discussed the importance of research, but limited follow-up actions have been taken. Most public universities do not yet have sufficient capacity to provide doctoral programmes.This is not only due to a lack of human resources such as qualified supervisors and technical staff, and physical resources such as laboratories, but also to the lack of a research culture and weaknesses in management and leadership. Private universities have taken a lead in providing graduate degree programmes, but these programmes are rarely backed up by a strong institutional commitment to research.

Most of the students enrolled in graduate degree programmes are public servants and professionals in both development organisations and private businesses. The graduate studies programmes offered by universities in the fields of education, law, economics, business management and development studies are directed mainly at the needs of professionals upgrading their knowledge and skills for the purposes of professional effectiveness and eventual promotion. These programmes are constrained by the limited availability of advanced scholarly literature, and by the fact that materials available in other languages may not be relevant to the context.

Within public universities there are no visible incentives for research by lecturers and there is no link evident between research achievements and either promotion or pay rises. A new policy on academic promotions is pending approval by the Office of the Council of Ministers, but it is difficult at this stage to see how this policy could address the many gaps that exist in research capability.

The gaps come in many forms. First, there is a lack of strong political commitment, which combines with a weak national research capacity to push the responsibility for research and innovation onto public universities and public research institutes. The level of understanding of the importance of research is not high among political and institutional leaders. Policy decisions, for example, are more often than not based more on assumptions, values and personal experiences, rather than on systematically collected data. More broadly, there is not a sound appreciation of the relevance of research and innovation to the future economic independence and prosperity of National .At present, it is easier to buy solutions for complex problems in agriculture and industry from abroad, rather than invest in the development of a strong national research capacity.

Second, the capacity for research and innovation is not yet well developed. Universities are commonly understood to be producers of research but across higher education system the faculty are under qualified. Augmenting this capacity is a major challenge. There are limited opportunities in universities for making research presentations, obtaining proper guidance from supervisors, or accessing research equipment and materials. Not surprisingly, most aspiring doctoral candidates prefer to do their studies abroad, whether self-financed or with the support of scholarships. Of the lecturers with doctorates. Opportunities for study abroad are scarce, though, which limits the supply of developed research talent. Most senior and highly qualified full-time lecturers in public Higher Education Institute also teach part time in various private universities, which pay them on an hourly basis. The income they earn is a valuable supplement to their government salary of around USD 150-200 per month, which is not enough to support a family. There are no promotional or financial incentives for lecturers in public universities to conduct research and publish. Their major commitment is to teaching, and preparing for promotion to a management position.

Third, As a national continues to struggle with the idea of academic freedom. At National peace is fragile and there are sensitive topics (for example anything related to borders with neighboring concerning government corruption) on which research is not generally encouraged. Furthermore, it is difficult to find any local peer-reviewed journals that published.

External development agencies and some of the government’s policy advisory agencies are needed to expand research capacity. The UNDP, World Bank, Development Bank, and the International Cooperation Agency should invested significantly in research and development.Tanzania Investment and Consultant Group Ltd-TICGL official high-level think-tank, is playing a key role in drafting and advising on a national strategic development plan. In doing so, TICGL is working closely with Different Organizations and a number of key development partners to influence national policy and development. Partnerships to conduct research within government institutions and public universities have been sought for mutual benefits and with a view to building research networks and communities for knowledge management.

There is very little research co-operation between universities themselves, or between universities and either public or private enterprises. However, Development Organizations Agency, a non-government agency, has been providing valuable support for young researchers, especially for those fresh back from abroad. TICGL publishes the National Outlook Brief, in partnership with the The Economist Review and Acedial International Ltd. This publication is a key resource for many policy makers and decision makers in National Development . There are very few other instances of the skills of highly qualified persons being utilised in this way. In future, though, international and regional co-operation through networks will make it more likely for highly qualified to become engaged in research-based collaborations with colleagues from other countries.

Conclusions

Recent developments in the higher education sector have seen an increase in enrolments and an increasing number of graduates moving from the bachelor to the doctoral levels. The slowness of the government’s approach to policy development and implementation regarding research and innovation is, however, a concern.

Building a research and innovation culture is likely to be a long-term challenge.National has had an Education Law , a Policy on Research and Development in the Education Sector and the Five-year Master Plan for Research and Development. This legal and policy framework aims to guide universities, researchers and research institutes to expand and commit to research and development towards turning into a knowledge-based society.

It is commonly understood that research prepares the ground for reforms and for improvements in the quality and effectiveness of policy processes and implementation. Public universities need financial commitment from the government and external assistance agencies if they are to make any progress in developing their research and innovation capacity. While the government has made some financial commitment to enhance research and innovation, it is difficult to trace exactly how large the commitment is. Against this backdrop, any donor-driven research investments need to be made conditional upon the publication of high-quality research outcomes.

The financial and political commitment to research and innovation is weak for various reasons. The government has little capacity to fund priority research areas and innovation. Furthermore, the government has little appreciation of the benefits of a knowledge society, or of evidence-based decision making. 

Research is most likely to be funded by development partners on a project basis. The World Bank’s has continuously urged investment in and more public attention on research and development. Future policy must focus on the development of properly funded public research universities that are autonomous in their governance and management. Performance standards for lecturers in these universities should stress the importance of quality in both teaching and research.

The management of research and innovation is currently not very effective. This situation arises from a lack of understanding of and a lack of political commitment to expanding research and innovation opportunities, particularly in any areas deemed to be politically sensitive. Policies and legal documents expressing a commitment to research and innovation are not supported in practice. There are almost no incentives for scholars and other highly qualified persons to engage in research and innovation. 

Research achievements in universities do little to help staff climb the career ladder. Universities are required to play more of a role as business enterprises, delivering teaching services, to the detriment of research. They may also be producing graduates who lack the research skills needed for future national development or for the labour market of the future.

Public and private partnerships are not being sufficiently explored and developed. The private sector has a big stake in the quality of education and training, and could also be an important consumer of the research services if the universities were able to provide them. It should, therefore, be arguing for, and investing in, the development of a research and innovation culture and capacity in universities and research institutes. 

For the moment, however, its voice is subdued.

In order to promote research and innovation at a policy level some measures/strategies that should be considered are as follows:

• Adopting top-down co-ordination to deal with the fragmentation of responsibilities for R&I by various ministries and institutions.
• Formulating a national roadmap for the promotion and enhancement of science and technology in which research is key to this development.
• Bringing the concept of R&I into the mainstream through capacity building for policy makers through regional network meetings or workshops;
• Enhancing participation and initiatives annual meetings. 
• Seeking support from development partners or donors to revitalise R&I in the short run and preparing for a take-over of responsibilities by the government in the long run.
• Continued networking with regional development on R&I and advising Higher Education Institute to have professional society forums and exchange research outcomes.

Leadership by government

The typology covers leadership in research and innovation (R&I) by government. This is a complex area and requires changes beyond training to address the gaps. These gaps are:

• The lack of strong and sustained national leadership for science and technological innovation. This gap relates to the political system and requires political reform. Rational policy formulation, implementation and evaluation has to become evidence-based. Policy research on research and innovations needs urgent strengthening. The government needs to recognise universities as an important resource for the country’s innovative capacity. While there are clearly social and economic returns for investment in research and innovations in Thailand, especially in the fields of agriculture and medicine, they need to be substantiated in order to convince policy makers and the public

• Inadequate structural planning. This has resulted in an imbalanced, fragmented and redundant structure, with serious gaps. There is no real innovation platform and the mechanisms for development are inadequate. Recommendations for reform of the system at the national level should be taken seriously.

• Insufficient co-ordination among agencies. Mechanisms for effective co-ordination require leadership and skills among top managers. Senior executive training programmes could lead to a broader national perception, encouraging leaders to go beyond their agencies, and improve the skills of top managers for interagency collaboration.

• An inadequate financial support system and inadequate funding mechanisms. This includes funding, budgeting, investments, promotional incentives and monitoring, especially correction and reform. Training for budget bureau personnel, and Parliament’s budget scrutiny and budget supervision commissions would be helpful as they are responsible for budget allocations. This could give them an awareness of the role and importance of research and innovation in national development. The level of funding for research and development is very low. Governments have repeatedly stated their intention to provide more funds for research and development. It remains to be seen whether it will ever be achieved.

• Inadequate quality control and assurance. This includes inadequate incentive systems for quality and relevant research, and for the utilisation of results, as well as an inadequate system for intellectual property management. There is insufficient knowledge and skills among those responsible for the management of research, development and innovation. Many types of training activities would help. There is a large gap between research results and utilisation and commercialisation. Translating research results into marketable products carries high risks, and may require high levels of investment. It also requires a change in mindset among decision makers. They would also need training in intellectual property.

• Inadequate understanding of the innovation process. This includes awareness and understanding of the essential enabling elements, which has led to gaps in the structure and mechanisms to support innovation. Knowledge and understanding of innovation processes, as well as skills in the nurturing of innovation, require intensive training and development.

• Inadequate private-sector participation. This is due to gaps in the implementation of already existing incentives and promotional provisions. In order to improve the existing tax incentives and investment promotion provisions, training regarding knowledge and understanding of the programmes, and skills for effective communication, would help.

Human resource management for research

Research commitment and achievements now feature prominently in human resource planning and management. Academic promotion, career tenure and remuneration all take account of research capability and performance. The university’s autonomous status allows it to determine rules, regulations and guidelines for academic staff management that permit active and productive researchers to climb the academic career ladder more rapidly, and to acquire financial benefits as a consequence of their research productivity. 

Individual staff members get a large proportion of any financial returns from the exploitation of their intellectual property and from patents. They are also recognised and rewarded for quality research outputs such as publications and citations.

Research programme planning and management

Senior administrators at the university are well aware of research trends, policy settings and funding opportunities for research, both within and outside. National is still establishing legislation and restrictions on and requirements for some types of research activity, but the university is contributing to their development and its administrators and major researchers are well aware of them. Researchers at large, however, have different levels of awareness. The implementation of financial auditing, compliance, and performance reporting needs more rigour and scrutiny although the requirements are understood. The university exercises its autonomy by having committees responsible for formulating research policy, mechanisms and for implementing research evaluations.

Strategic planning for research and innovation has been in operation for many years, but the rigour of its implementation varies. Even though the university has been working towards becoming a significant research institution for the past 30 years, it will take more time for it to fully establish a real research culture and ethos. Its risk management processes concerning research and its products have only been initiated during the past four years and are still limited. It has had a goal of university-industry collaboration for several years, but this remains largely at the policy level, with not many significant instances of implementation. Collaboration would require different mindsets and expectations from both sides – academics aim at excellence and perfection, while industrialists base decisions on utility and profits. The university would have to build trust with private sector over its ability to deliver in a timely fashion and the quality of its research outputs.

The university has increasingly active channels for communication internally and with external stakeholders, as well as with the public at large, with a special office responsible for this area. The efforts of this office appear, however, to lag behind the rapid rate of change and the growth in new opportunities. The University has a popular radio station, for instance, with a capacity for broadcasting programmes over the Internet, but now it must look at the prospect of having to develop a multimedia television station.

Mechanisms to support university-industry linkages remain at a conceptual level, or are implemented on a grant-by-grant basis. Truly collaborative ventures need further exploration to suit the local conditions and culture. Researchers, inventors, engineers, manufacturers, marketing experts and investors, as well as users, all have different points of view which need to be distinguished, and a culture of teamwork needs to be developed.

Gaps at University

There are a number of gaps in both institutional leadership and research management in University. Research and development is fairly well addressed, but innovations need more emphasis. Frequent changes in administrators mean that the skills for the implementation of strategies need to be constantly developed. Research management training must be an on-going activity. There needs to be a concerted effort to develop the rules, and guidelines for good research practice that are appropriate for the local conditions. International collaboration could be further strengthened with new knowledge and skills. A big gap exists in relation to the scaling up of research and innovation to a commercial level, as well as in marketing and entrepreneurial activities. In particular these gaps include:

• Inadequate breadth and depth of knowledge regarding the sources of fund for research, development and innovations, both inside and outside the country, as well as weaknesses in skills to access and exploit them. Addressing this gap would enhance the productivity of the research resources within the university, and enhance research outputs and outcomes.
• University staff do not have the knowledge and skills needed to commercialise research results and innovations, particularly about the steps to take, regulatory barriers and the investment in the process that is needed. More collaboration with outside agencies, both private and public, would expand the activities of the university. Better co-operative efforts would mean that businesses could contribute much more to the activities of the university.
• University staff lack the skills to recognise the marketability of products from research, and whether innovative processes might be patentable. Many processes are either published in academic journals, or even left unpublished. Developing the entrepreneurial skills of academic staff and students would be helpful, and could be done through collaboration with private businesses.
• Improved skills in writing grant proposals for a variety of different research funders would enhance the university’s research, development and innovation efforts.
• Improved skills in writing research reports would make the university’s research output more widely available, especially if they were written in English for international distribution. Many research results are reported in Thai and in national journals, even though they would have been suitable for international publication.
• Researchers lack the skills to transform routine work into research. A lot of innovations emerge from routine academic work and services, and could add to the university’s research output. Innovations from case studies and success stories are often not properly documented.

Discussion

As a developing country that has long recognised the need for research in support of national development. For many years it has been developing its universities and research institutes, but with inadequate financial and human resources, and with inappropriate structures and mechanisms. Although the higher education system started about a century ago, its research function came late, starting with the creation of the National Research Councils. Inadequate structural planning has resulted in an unbalanced, fragmented and redundant structure. There are serious gaps in the country's innovation platform and a lack of adequate mechanisms for innovation development. Spending on R&D is low compared with international statistics and very low when compared with developed and other emerging Asian countries. Private-sector investment in R&D is also very low. While the shortage of R&D personnel in Thailand is recognised as a problem, it will take a long time to remedy.

As a national we needs to reform its research system if it is to meet the challenges of a more competitive world and if research, development and innovation are to play their part in national competitiveness. It also needs to improve the quality of its research management. Senior executive programmes for high-level policy makers would improve policy formulation and implementation, including financing and human resources development. These should place particular emphasis on the sources of funding and how to mobilise them. Even though granting agencies, universities and research centres have developed their research managers, middle managers still need additional training to enable them to take on a broader range of functions, including funding mobilisation and quality measures. Improving the quality of research processes and outputs will require standards and appropriate flexibility. Quality evaluation of research results and innovations, both by peer review and by other stakeholders, must be strengthened. The need for training of research managers must, therefore, be recognised and actively pursued. It is also crucial to offer researchers a career structure.

Scaling up and commercialising research results and innovations is complex, involving many steps. It needs supporting infrastructure and investment in the process. Training would improve knowledge and skills in the strategic management of the utilisation and marketing of innovations as well as intellectual property matters, including licensing, incubation, start-ups, joint ventures, and other commercial alternatives. Collaborations between universities and industry and between individual academics and entrepreneurs collaboration would benefit from sensitive development.

In Sub-Saharan Africa as elsewhere, Micro, Small and Medium Enterprises (MSMEs) play a crucial role in economic development and job creation. However the sector hardly achieves its full potential because of a series of challenges, among which is limited access to financial services, but also because of a more general lack of knowledge about this particular segment. 

In order to better meet MSMEs’ needs, a first step consists in identifying the profiles, growth paths, success factors and challenges faced by those who managed to turn their microenterprises into small or medium entities, hereinafter referred to as “Small and Growing Business” (SGB) owners.

As microenterprises are likely to resort to microfinance institutions (MFIs) to get access to financial services. At a glance of Micro Financial institutions:

• SGB owners include both men and women, but female SGB owners distinguish themselves with a higher level of education on average and by starting their businesses at an older age. This may imply that education is more determining for women’s success, and that women were more constrained by household tasks and children care before being able to fully commit themselves into their activity.
• Most SGB owners are married, and a large part of them benefit from their spouse’s support, who work in their business. However, SGBs are characterized by a low share of family members among their employees at the time of survey, showing that those who managed to grow are also those who dared open their business to external skills and not relied on family only.
• Having many dependents may slow down business growth, however most SGB owners have a family, children and dependents, which implies that this is not irreconcilable with business management and growth.
• A minimum level of education seems necessary to be able to make a business grow, since no entrepreneur is illiterate. If the most educated entrepreneurs are not necessarily the owners of the greatest businesses in terms of capital, there is a positive correlation between education and business size as well as business growth in terms of employees.
• Previous experience may be as determining as education and/or complementary for business growth, as it is a common feature of most SGB owners, whether it is experience in their field of activity or in business management.
• In terms of management, all SGBs are managed by their owners, who are not ready to delegate this task to other people. Most SGBs are officially registered, with variations across countries due to diverse national legislations. All SGBs keep accounts, but not always with a professional accountant or electronically.
• A high proportion of SGB owners run several activities at the same time, usually with a single registered company but sometimes with several ones, not always officially registered.
• SGB owners have launched their businesses with their own savings and sometimes family support, but faced strong difficulty in accessing finances for their start-up phase due to collateral requirements. They got access to microcredit only after running their businesses for a few years.
• Growth patterns are diverse: some SGBs started to grow just after business launch while some others did not; some benefited from regular and continuous growth whereas some others encountered fluctuating growth. Nonetheless, all interviewed SGB owners remain growth- oriented.
• The critical factors which enabled SBGs to grow are personal character, especially hard work, perseverance, adaptability and reactivity, and access to finance. In Ethiopia, access to working spaces and premises thanks to a national policy was also determining for microenterprises working in the manufacturing sector.
• Today, most SGBs claim that access to finance remains crucial to enable them keep growing, but a large part of them still face difficulty in accessing the amounts they need, mostly because of collateral requirements. Processing times are also considered as too long. A solution found by Kenyan entrepreneurs is to get several loans at the same time, from different institutions but also sometimes from the same one, which seems inefficient and risky. A lack of adequate financial products for SMEs clearly appears, as neither MFIs nor banks properly serve them.
• With regard to financial services in general, financial needs of SGB owners evolve and become more sophisticated as their businesses grow: they especially need savings accounts but also current accounts and electronic payment solutions. However, microfinance institutions are seldom able to offer such services. This leads SGB owners to resort to several kinds of financial institutions for other financial services than credit, such as mobile banking solution providers in Madagascar or commercial banks in Ethiopia, while credits are still taken from MFIs.
• Another main challenge faced by SGB owners is local competition, especially from the informal sector: as a consequence, not only is formalization determining for SGB owners themselves as it provides them with many advantages such as better image and easier access to suppliers, clients and public services, but also for their competitors whatever their size, in order to avoid market distortions.
• The need for non-financial services appears as less primary compared to the one for financial services. The non-financial needs mentioned, when there are some, concern training, either technical or managerial, and market linkages. However, some SGB owners do not know the agencies or organizations which would be able to provide them with such services. More consistency and innovative partnerships between providers of financial and non-financial services as well as between private and public entities could help SGB owners benefit from such services.

As in most countries, SMEs are crucial for economic growth, development and employment in Sub- Saharan Africa. By relying on five MFIs in Ethiopia, Kenya and Madagascar, this study aimed at better identifying the profiles of small and growing business owners, that is to say of micro-entrepreneurs who managed to turn into very small, small or medium enterprises, and at better understanding their growth paths, success factors and challenges.

On the basis of the results detailed in the previous section, some recommendations can be made in order to foster the development of the MSME sector and facilitate their growth. These recommendations may be relevant for a diversity of actors, from policy makers to all kinds of financial and non-financial services providers. They concern the following issues:

• The role of the government and public agencies. Despite the various measures and policies implemented in each country, the efforts seem insufficient to enable MSMEs to evolve and grow in a proper environment and access the services they need. The variety of definitions of MSMEs within a country, even sometimes their inconsistency or irrelevance, may reflect the lack of attention dedicated to this segment. Even though interesting initiatives have been launched in Ethiopia, especially with regard to the provision of working spaces and premises, public support is inadequate and insufficient everywhere. The legal environment is sometimes constraining, especially in Kenya, where licenses and taxes seem too numerous, let alone corruption, and incentives towards financial service providers to facilitate access to credit for SMEs are missing.
• Access to adequate credit. Indeed, a high share of SGB owners face difficulty in accessing the amounts they need to keep growing. This is mostly due to collateral requirements from the financial institutions currently funding them. Even with clean credit histories, requirements remain too high and processing time too long. The conditions demanded by MFIs seem inappropriate for SMEs, while banks still refuse to serve them: this is the “missing middle” issue often referred to when talking about challenges faced by SMEs. Whereas the trend in public policies is rather to create a proper and supporting environment for start-ups and microenterprises, the same kinds of initiatives in favor of the expansion of small and medium enterprises are missing, and yet SMEs are likely to create more jobs. It could be more relevant to consider microenterprises and start-ups as a part of a value chain which also includes SMEs, and to think about how to ensure access to financial and non-financial services for the whole value chain.
• Access to diverse and sophisticated financial services. Most SGB owners resort to diverse financial institutions in order to make up for the lack of appropriate financial services offered by the institution currently funding them. The Ethiopian case is particularly striking, with SGB owners taking credits from MFIs but all other services such as current accounts and electronic payment solutions from banks. If MFIs or banks are not able or willing to offer all the services needed by SMEs, at least synergies and collaborations between various financial service providers could be created in order to ensure that SMEs are properly served. MFIs could also innovate and scale-up their services to better meet SMEs’ needs, especially by including FinTech solutions, either internally or in cooperation with specialized providers.
• The burden of informal sector. All SGBs are formally registered in Ethiopia and Madagascar, whereas it is not the case in Kenya, where several levels of registration exist. The Kenyan legislation does not seem to efficiently incite SMEs to register. However, more generally speaking, formalization is a key issue, not only because it facilitates access to suppliers, clients and government support for SGBs, but also because it minimizes market distortions: for now, many SGBs have to face competition from other local enterprises which are not always formalized and are not submitted to the same rules and costs, which is definitely an obstacle to their growth. As a consequence, more incentives to formal registration should probably be implemented, not only for SMEs but for all economics actors whatever their size.
• The need for non-financial support. Few SGB owners benefited from non-financial services. If some of them claim not needing any, some others acknowledge that training, either technical or managerial, and business development services (BDS) in general could be useful for their growth. So far, the offer of such services has remained insufficient, inappropriate, and even too costly when provided by private organizations. More coordination between providers of financial and non-financial services and/or public-private partnerships could be solutions to test in order to develop more organized, efficient and quality-driven BDS sectors.
• The need for more knowledge and information about SGBs. The outcomes of studies of this kind may be particularly useful for several types of actors. For MFIs first, they may help them better know their clients, train loan officers, and especially give them some clues to identify SGBs in their existing portfolios but also among their possible future clients. Hence, such studies may provide MFIs with relevant information to implement specific and adapted support dedicated to SGBs, whether for pre-launch phase or post-creation phase. Second, for governments, donors and national or international organizations willing to focus their efforts on job creation, such studies give insight on the segments to target to maximize the potential number of jobs created. As a consequence, more studies with other MFIs, in other countries and other continents should be launched in order to contribute to knowledge creation on SGBs. These studies could also adopt a different perspective by focusing on entrepreneurs’ life stories, and/or deal with complementary issues, such as SGB owners’ resilience capacities and strategies to manage risks and face shocks; this could give food for thought about the needs for other kinds of products and services, such as insurance. These are only suggestions and illustrate the large scope of questions to tackle and research initiatives to launch to keep extending financial inclusion of all population segments.

Development Economy for MSMEs

Human Capital Investment- Unemployment rate Status to the Family level

Tanzania’s Fastest Growing Economies in the World

Market Engagement Strategy

Mention the word “innovation” and most people will think of extraordinary inventions created by solitary geniuses. But the majority of business innovations today are quite the opposite. The companies that generate them thrive on collaboration, a free exchange of ideas and regular interactions with customers and other stakeholders. They innovate not necessarily to revolutionize their industry — although that may happen to a lucky few — but to meet specific objectives and carve out a competitive edge.

Perhaps most important, however, is that innovative companies do not outsource this function to a department or committee. Nor do they hastily come up with an innovation plan when the corporate strategy calls for it. Rather, for them innovation is a way of life. It is what they do. And to do it well, they change whatever needs
to be changed, whether it’s their organizational structure, their business processes, or even their core products or services. Yet this doesn’t happen randomly: leading companies do follow a process to innovate. Our research has found that this tends to be a spiraling, iterative approach that embeds innovation in every aspect of the organization.

The circle in the middle (Innovation spiral) shows how companies can gain competitive advantage, which is typically the purpose of innovation. The following are the components of the spiral:

Areas of innovation
Organizations typically innovate in three areas: products and services, processes, and business model. Our research shows that although product and service innovations certainly help businesses obtain a competitive edge, business model innovation tends to confer more lasting benefits.

Innovation process
Innovation has, up to now, typically followed a three- step process — idea creation, development and exploitation. Our research reveals a major shift in how leading companies go about innovation today. Intuition is the process of obtaining ideas, from anywhere and everywhere. Socialization happens when the idea is discussed and debated with other people, formally and informally. After this process of ideation, the resulting idea goes through development and exploitation. In the spiral approach, innovation doesn’t always need to start at the intuition phase but can start anywhere in the framework. If there are unanswered challenges at any stage, then the process can go backward until the issue is resolved. For example, new products may be rolled out and tested on consumers before the next phase of development, usually involving customer feedback or user experiences.

External collaboration
The most innovative organizations collaborate throughout the process to access diverse internal and external expertise. This involves working with customers, investors, suppliers, governments, financial services, competitors, academics and other companies.

Innovation enablers
These are the internal factors necessary for the innovation spiral to work. At the top are leadership mindset and culture: organizational leaders must be innovative and take risks to achieve competitive advantage. Once innovation is embedded in the culture, seven other key factors need to be aligned to allow innovation to flourish: people and skills, technology, infrastructure, organization and governance, risk management, measurement and key performance indicators (KPIs), and funding.
The right column (Business outcomes) shows that companies innovate to achieve five key business outcomes: profitable growth, customer engagement, business sustainability, productivity and business agility. The challenge is to focus on all of these outcomes together, rather than favoring one over another, which compromises the ability to anticipate change and drive growth.

Entrepreneurship oriented toward high growth
in the formal economy is a nascent phenomenon in Tanzania , particularly in the technology subsectors targeted in this assignment. Only a handful of entrepreneurs were identified, and nearly all of them were in the very early stages of development. Furthermore, other stakeholders interviewed identified many factors that contribute to the lack of robust entrepreneurs, but they nearly all confirmed that such high-growth entrepreneurs in the sectors were few and far between. The key points listed below summarize the observations gained on the biggest barriers
to angel investment in high-growth technology entrepreneurs in Tanzania:

1. There are few business mentors and no active angel investors. There are few successful entrepreneurs to guide and inspire new entrepreneurs. Stakeholders identified the lack of success stories of entrepreneurship in traditional sectors, much less in technology, as a primary inhibitor to interest from potential entrepreneurs.
2. The natural resources “curse” is inhibiting technology sector growth. With the discovery of abundant natural resources, the focus of investment and the majority of economic activity have been oriented toward developing companies to supply the value chain of large enterprises to displace import substitutes. Stakeholders indicate that while there has been some success, these companies are generally not innovative. Furthermore, stakeholders indicated that there is a considerable challenge to source domestic inputs, as small local producers do not have sufficient negotiating power nor quality control standards to sell to large extraction companies.
3. A critical mass of medium-size businesses does not exist. Tanzania has megaprojects and large companies, very few medium companies, and a large amount of small informal businesses (nearly 90 percent of the private sector). This results in small businesses being unable to join the value chain to eventually sell products and services to large companies, who largely rely on foreign suppliers. Stakeholders confirmed that part of the reason for this is that most entrepreneurs prefer staying small and informal to stay unnoticeable and not show public success
   so they don’t have to become the provider
   for family and friends. They would rather launch other small informal businesses than grow the initial one. The absence of medium companies to play a convening and distributing role exacerbates broken value chains between small producers and large client companies.

5. The risks associated with entrepreneurship and, to a lesser extent, angel investment are not assuaged by strong trust in counterpart stakeholders. Aversion to risk was reported at every level of the ecosystem. Entrepreneurs do not trust wealthy individuals or catalytic agents and fear having their idea or business stolen. Wealthy individuals do not trust local entrepreneurs and domestic economic growth to provide returns.
6. The government lacks a united vision and clear strategy for the development of the
   key high-growth sectors. The government
   is struggling to create and follow a clear national strategy on the development of the technology sector and innovation. This is due to a prioritization of basic poverty alleviation through sectors such as agriculture, education, health, and infrastructure. There is a clear
   lack of operational coordination between all actors in supporting early-stage technology companies, leaving entrepreneurs hanging along the development path.
   entrepreneurship oriented toward hIgh growth In the formal economy Is a nascent phenomenon In mozambIque, partIculary In
   the technology subsectIons.
7. There is a general lack of financial and managerial skills. From the available
   statistics and the interviews conducted, most entrepreneurs that do access initial capital mismanage it due to a lack of financial literacy and management skills. Personal pressing financial problems were also indicated as a cause of low financial discipline in management terms. Due to this, examples of seed funding usually did not translate into business results. There are Business Development Services (BDS) solutions available, but these are either too expensive for entrepreneurs to afford, led by a nonexpert in a governmental agency, or are a short-term generic training insufficient
   to improve managerial skills. Stakeholders indicate that technical skills are sufficient.
8. Financial instruments tailored for early-stage financing for technology are not available. The allocation process of available early-stage financing for start-ups through grants and loans is insufficient. However, stakeholders indicate that the technology sector is perceived as particularly high risk and low return,
   hence few options are available to potential entrepreneurs for early-stage initial capital beyond grant programs. Microfinance is quickly accessible. However, stakeholders indicate that rates are unaffordable for a start-up. Grant programs exist, but they have had very limited success in providing resources to start-ups.
9. The lack of growth financing for a small number of tech SMEs inhibits growth potential of start-ups. There is a genuine lack of growth financing for start-ups that are looking to grow into small or medium businesses, although it should be noted that these are very few in number.
10. The policy environment does not adequately promote entrepreneurship and investment in the tech sector. The cost of doing business—registration and licensing, opening ank accounts, obtaining and enforcing intellectual property protection, paying taxes and accessing information—is high for entrepreneurs. Outdated policies in rapidly changing subsectors such as mobile technology and the absence of guidelines in relatively nascent areas, including biofuels and e-commerce, stunts progress in the tech sector and inhibits the growth of technology entrepreneurship. While the government seems to recognize the employment potential through entrepreneurship, its initiatives are under- capacitated and are not actively supporting technology entrepreneurs.

Unmet Needs and Support Gaps
Entrepreneurs in Tanzania face particular difficulty overcoming key challenges in their path to establishing profitable businesses. In addition, the pool of growth-oriented entrepreneurs is quite small, and technical skills among that pool are limited. Chief among the challenges facing this small group of entrepreneurs is weak mentorship, coupled with a lack of coordination between support programs. The absence of real co-working space, and the focus on business plan competitions, can have the effect of making entrepreneurship more of a game than a career, particularly in the absence of a clear “next step.” Stakeholders indicate that most entrants into entrepreneurship are from wealthy, well- connected families and will most likely revert to government or international employment after tinkering for a while.

Furthermore, market research and other business services are either of low quality or are prohibitively expensive.

Unemployment rate and Economic Growth

Upfront the long term of Public Investment to Macro-economic Growth