How mobile money can help us understand entrepreneurial development

How mobile money can help us understand entrepreneurial development

The benefits and disadvantages of economic growth have become an important point of debate in social, political and economic forums. On the one hand, it is argued that economic growth is necessary for both the sustenance of economic welfare and social wellbeing. On the other hand, economic growth can be associated with the degradation of ecosystems, including climate change, biodiversity loss, pollution, and the destruction of the natural resources on which our social and economic life depend. Finding new models in which economic value creation is decoupled from environmental degradation, or is associated with environmental and social improvement, has become imperative.

Regardless of whether or not economic growth and environmental degradation can be decoupled, it is certain that in our search for a different economic equilibrium, new entrepreneurial solutions and firms will need to be developed, replacing existing and outdated products, services and production methods. Engaging in Schumpeterian “creative destruction”, entrepreneurial initiative may then trigger the de-growth of such economic activities, but hopefully accompanied with the emergence, and growth and scale-up, of novel, more desired economic activity. Different from overall economic growth, achieving ambitious and fast entrepreneurial growth is then not only desired, it is necessary to allow for creative and more sustainable solutions that we urgently need.

Entrepreneurial success, however, is not an easy feat to achieve. Entrepreneurship, by definition, is the development of opportunity when the existence of such opportunity is uncertain: even the best and most seasoned entrepreneurs and investors get it wrong more often than they get it right on the ideas they have for entrepreneurial opportunities. Furthermore, whether or not new entrepreneurial ideas actually lead to societally beneficial solutions is often difficult to anticipate, and governments worldwide are in the difficult position of both stimulating the emergence of new entrepreneurial activity and steering such activity in ways that align with overall societal objectives.

In a paper published in Technological Forecasting and Social Change, Jan Lepoutre and Augustina Oguntoye compared the emergence of mobile money in Kenya, and the massive success of M-Pesa, with the non-emergence of mobile money in Nigeria, to explore just why the same entrepreneurial idea can take off in one country and fail in another. The emergence of M-Pesa is a true intrapreneurial story (an entrepreneurial venture started within an existing company, in this case Vodaphone): an aspirational series of trial-and-error, resourceful and collective learning, surprises and pleasant discoveries. Yet for the venture to achieve the massive growth it has, it required both significant financial and regulatory support. Kenya and Nigeria, while countries with otherwise similar socio-economic and technological development, differed in their governmental ability to oversee and control the social impact and risks of this new financial innovation. While the Nigerian government was not opposed to mobile money, it lacked the capabilities and bandwidth post financial crisis to oversee an unknown financial activity. The Kenyan government, instead, was part shareholder of Vodaphone’s Kenya subsidiary (Safaricom) where M-Pesa was being developed. As such, it was able to learn alongside M-Pesa about financial innovation and develop a regulatory framework withit.

The lessons this paper offers are not only of value for financial services in developing countries. The speed at which entrepreneurial ecosystems can deliver entrepreneurial successes depends on the ability – either individually or collectively– to absorb the costs of error, to turn errors into knowledge and intelligence, and to find solutions for the constraints of either. In the past few years, entrepreneurial ecosystems across the world have been inundated with financial capital, and the impressive increase in the number of unicorns, non-publicly traded firms of less than 10 years with a valuation of at least 1 billion dollars, shows just how fertile the soil for entrepreneurial growth currently is. Very often, however, the constraints for entrepreneurial success and growth are elsewhere, and resources other than financial ones are what stifles further development of opportunity: a lack of talent, regulatory or social legitimacy, raw material and more.

It is for this reason that at ESSEC Business School, we are massively investing in the development of talent that is able to read the economic environment in which opportunities are being developed, and has a strong understanding of the environmental, sociological, organizational, and human challenges that are involved in this process. By confronting students with these challenges early on, they are able to hit the ground running in the labor market and contribute faster to overcoming challenges in entrepreneurial and scale-up development.


Lepoutre, J., & Oguntoye, A. (2018). The (non-) emergence of mobile money systems in Sub-Saharan Africa: A comparative multilevel perspective of Kenya and Nigeria. Technological Forecasting and Social Change, 131, 262-275.

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