Introduction to Entrepreneurship Policy Toolkit

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 Entrepreneurship Policy Toolkit
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Author Innovation for Policy Foundation
Published June 2022
Language English
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License CC 4.0 BY-SA

Why you should read this?

This toolkit is designed for forward-thinking policy makers that want to transform their entrepreneurial ecosystems, as well as startup founders and other key ecosystem players that want to support their governments with policy reform through deliberation and cutting-edge evidence.

Seasoned policymakers and those new to the area of entrepreneurship will find value in this kit. The toolkit is:

  1. A one-stop-shop for information: Aggregates research from multiple resources (development organizations, entrepreneurs, academia, policymakers, etc) on entrepreneurship policy, centralizing information in one place. Interventions are structured around seven core challenges entrepreneurs face that policymakers seek to solve.
  2. User-centered: Designed with users in mind, it addresses many considerations a policymaker must evaluate (Part 1), provides an assessment approach (Part 2) and a catalogue of interventions and best practice examples (Part 3) to learn from. Future versions of this kit will provide an interactive platform to aid navigation.

This toolkit provides technical know-how regarding the tools and processes that policymakers across Africa need to develop policies and legislation that support the growth of businesses. We know that no policies can be made without consideration for the political economy and the socio-economic context in which they are made.

Questions of policy making processes and politics are beyond the scope of this toolkit. These will be addressed in depth by a forthcoming Policymaking Handbook that the Innovation for Policy Foundation is developing. This Policymaking Handbook will address:

  • the process of policymaking, e.g participatory approaches;
  • navigating the political landscape;
  • the design of  good public policies, and more.

Keep an eye out for this work on our platform!

Entrepreneurship Policy In Africa

Entrepreneurship Policy in Africa
Entrepreneurship Policy in Africa

African governments have increasingly begun to focus on entrepreneurship as a means of creating quality jobs, boosting the wider economy's productivity and growth, and delivering market-based innovations to development challenges.

However, the full potential of entrepreneurship is often left untapped. This is due to the existence of a number of constraints hampering the development of the private sector, including unfavorable legal and regulatory frameworks, underdeveloped infrastructure, lack of business development services, limited access to finance, limited supply of skilled labor, and weak cultural support, tend to affect even more SMEs and startups than large, established companies.

Objective of the Toolkit

The objective of this toolkit is to provide policymakers with a range of policy solutions that is practical and easy to use as they navigate strategic decisions on entrepreneurship policy and digital transformation.

The toolkit will seek to build upon available work, and its primary contribution will be in the aggregation of existing research and guidance, user-friendly design and navigation, and its dissemination to a wide community of policy makers and stakeholders across Africa.

Who Should Use This Toolkit

Policymakers.png Development Partners.png Entrepreneurial Ecosystem Partners.png Academia & CSOs.png
Policymakers Development Partners Entrepreneurial Ecosystem Partners Academia & CSOs

How to Use This Toolkit

Location on the policy cycle

  • The focus of this toolkit is to provide a menu of instruments and tools that can be adapted to suit local needs and to assess your business ecosystem.
  • This means that the toolkit fits best in the ‘agenda-setting’ and ‘drafting’ phases of a policy making process, or policy cycle as depicted on the right.
  • We depict the policy making process as a cycle, because making policy is a continuous process without a clear start and end.
  • Policymaking is a fluid and iterative process, where policymakers continue to make choices on policy design and implementation based on the impact of previous decisions.
Location on the policy cycle
See for a detailed explanation of the Innovation for Policy Process

This toolkit is a compilation of multiple interventions from various sources. Use the following questions to help you navigate.

Finding the Information You Need

Where are you in your policy making process?

Policymaking process roadmap - i4Policy
Policymaking process roadmap - i4Policy

Considerations to Note

  • There is no one size-fits-all approach to the selection of policy reforms appropriate for your country.
  • The objective of this toolkit is to provide a menu of potential options that can be adapted to suit local needs.
  • Policy makers are encouraged to consult with stakeholders within their local ecosystems to determine the appropriate reforms for individual country contexts.

Types of Content Included in this Document

Actions.png References.png
Learning Example Actions References
Key concepts on thematic area Showcases a Country example Considerations for implementation Further Reading & Additional Information

Key Definitions[1]

Entrepreneurship ecosystem

  • Entrepreneurs thrive in collaborative environments where multiple factors and stakeholders (public and private) work together. Challenges and interventions are distinct but interdependent and intertwined: each can impact the other, in positive or negative ways.

Small and Medium Enterprises (SMEs)

  • There is no universally accepted definition of SMEs however countries’ regulations often set their own definition through a combination of size related (e.g. number of employees) and financial criteria (e.g. annual turnover, assets, etc.).


  • Startups are generally defined as companies in their first stage of operations with the ability to scale and grow rapidly through utilisation of new technologies. All startups are SMEs, but not all SMEs are startups due to differences in set-up, growth potential, and vision.
  • Growth trajectory: Startups are engineered to grow quickly and significantly. Successful startups will be ‘gazelles’.

New or Young MSMEs

New subsistence micro-businesses

  • Youth, marginalized, unemployed, and/or underemployed individuals who start micro-businesses generally for reasons of self-employment. The businesses are usually low skill, they may be engaged in simple retail activities, and they are likely to stay informal.
  • Growth trajectory: Unlikely to ever grow.

New competency-based MSMEs

  • The establishment of small businesses by entrepreneurs who have a skillset – a technical trade, profession, or work experience – around which the business is formed. Such enterprises are found in all sectors and generally do not involve a new business model or innovation.
  • Growth trajectory: Can potentially grow significantly if they have an entrepreneurial owner and/or right market conditions, although the owner may lack broad skillset to manage this growth.

Established SMEs

  • Existing SMEs older than 3–5 years with some scale, usually mature ‘competency-based MSME’. They are found across the economy in all sectors, and are often family businesses.
  • Growth trajectory: Most probably do not have growth aspirations, either because they provide a sufficient lifestyle to their owners or because of limited capabilities and market opportunities. Others will grow opportunistically but are not actively strategizing for it. However, their interest in growth can change, for example, when there is generational change in family business.

Established, growth-focused SME

  • Existing SMEs older than 3–5 years with some scale, with growth aspirations and business model based (at least partially) on new product, business model development, or new market entry.
  • Growth trajectory: Generally have growth intent and hence they may invest in innovation. Growth can occur organically (for example, through new products/new market entry) or through mergers and acquisitions or a combination.


We wish to offer a special thank you to the many subject matter experts who contributed their time and expertise to this toolkit.

  • Steering Committee

Matthias Rehfeld, Justin Hill, Julia Patigny, Christina Schmittman, Rob Floyd, Rym Jarou, Arthur Minstat, Sinit Zeru, William Lugwema,  Louise Shaxson

  • Technical Working Group

Ana Cristina Soria, Myriam Raymond, Sewu-Steve Tawia, Lotfi Kaabi, Ferentz Almasy, Julio Mpemba, Mothalbane Koloi, Sofiane GHALI, Ninon Duval Farré, Sebastien Boyé, Michel Gonnet, Tanya van Lill, Chema Triki, Khalid Manchate, Mafini Dosso, Charles Odoom, Foster Ofosu, Charity Kabango, Xavier Michon, Richard Koenig

Continue to

Part 1 - Key Considerations in the Development of Entrepreneurship Policy Part 2 - Assessing Your Ecosystem Part 3 - Policy Interventions by Topic Area