Institutional and individual factors enabling the growth of Lesotho’s MSMEs in the manufacturing sector

Abstract

As a means of seeking more effective ways to curb the unemployment levels in Sub-Saharan countries, governments are beginning to include the development of the manufacturing sector in their country's strategies, and Lesotho is not an exception. This paper aims to determine the role of various institutional and individual factors which when present and collaborating in an entrepreneurial ecosystem can contribute to the successful growth of MSMEs operating in the manufacturing sector. This paper is also aimed at developing a conceptual framework suitable for the growth of these MSMEs in Lesotho by linking concepts of industrial and entrepreneurial ecosystems. This study utilised a qualitative exploratory research approach and data were collected using semi-structured interviews. In total, 12 candidates from government, financial, and educational institutions as well as the media were interviewed. Data were analysed using thematic analysis. The main findings of the study demonstrate that a suitable ecosystem for MSMEs in the manufacturing sector in a country such as Lesotho should consist of policies and regulations that support and encourage financial institutions to assist MSMEs. Government regulated media institutions disseminate regular information relating to existing policies, regulations, and opportunities and educational institutions provide adequate skills and knowledge to enhance an individual’s entrepreneurial alertness, creativity, and innovativeness. An inclusive ecosystem for MSMEs in the manufacturing sector in Lesotho should also involve the collaboration of MSMEs with larger firms and the establishment of independent regulated quality assurance institutions to assure the quality of products and increase customer confidence.