The Transformation of Small Enterprises to Manufacturing: Cases and Experiences from Selected Sub-Cities in Addis Ababa, Ethiopia

Small enterprises (SEs) are universal. They exist in all countries albeit in different forms and sizes, operating in diverse contexts, but passing through more or less parallel successive growth stages and sharing comparable challenges. The scenario in Ethiopia, in general, and in Addis Ababa, in particular, is not that different. This research aims to identify the root causes of slow progress of the transformation of SEs in Addis Ababa to successive growth stages as stipulated in the national Micro and Small Enterprises (MSE) development strategy. This study addresses the challenges encountered in the transformation of small enterprises through research assessments and identifying solutions that will help to enhance the effort. The research data was collected through qualitative data collection methods involving small enterprise owners/operators, government service providers, loan officers in a microfinance institution, and trainers in Technical and Vocational Education Training (TVET) colleges, which all are the major stakeholders in the development of small enterprises in Ethiopia. Qualitative data was collected through focus group discussions, key informant interviews, and in-depth interviews from more than 70 participants. In addition to the primary data, the transformational intervention approach of my study was based on a close review of the national strategy and the transformation guideline of enterprises that are currently at work. The research found out that there is a glaring disparity between the strategic objectives and implementation approaches. Likewise, recruitment of prospective entrepreneurs is politically dominated rather than professionally led, and there is a neglect of behavior cultivation of the entrepreneurs. I suggest the introduction of an expanded knowledge of work, elements of Reflective Leadership and Servant Leadership principles in the implementation packages of the strategy, which needs a systematic and thorough revision in its entirety.