Why people matter in high-growth entrepreneurship in Africa

Access to finance is a foundational driver of inclusive and sustainable economic development. By expanding access to financial services, enabling innovation, and facilitating market participation, finance can empower households and firms, reduce poverty, and unlock growth opportunities. Over the past decade, J-PAL and its affiliated research network have built a substantial body of evidence on digital financial services, credit, and other dimensions of financial inclusion.

This is the third blog on why people matter in high-growth entrepreneurship in Africa in a series highlighting five priority areas for financial inclusion in Africa. See the second post here.

In 2025, J-PAL Finance Sector Co-Chairs Emily Breza and Emanuele Colonnelli convened a group of researchers in Nairobi, Kenya with J-PAL Affiliated Professor Christopher Woodruff and Private Enterprise Development in Low-Income Countries (PEDL) to engage with finance-sector stakeholders and advance the research agenda on inclusive finance for development. These discussions highlighted five priority areas for financial inclusion in Africa: 1) How Data and AI are Reshaping Access to Finance, 2) Building Venture Markets Where None Exist: Coordination, Capital, and Evidence, 3) Why People Matter in High-Growth Entrepreneurship in Africa, 4) Where International Finance Meets Development - The Role of Currency Risk, and 5) From Farm to Finance - Financing Challenges Along Agricultural Value Chains. 

The people behind firm growth

Understanding how people, skills, and organizational structures drive firm growth is becoming increasingly important as entrepreneurship ecosystems mature across Africa. Our conversations with practitioners in Nairobi, together with emerging research, highlight a central insight: Successful firms in Africa are built not only on strong ideas, but on the capabilities of founders, teams, and managers who can scale those ideas effectively.

Yet significant gaps remain in how we identify high‑potential entrepreneurs early, support team formation, and develop local managerial talent. Strengthening people and teams isn’t just about improving individual firms—it's about building business ecosystems that can support long‑term, inclusive growth.

From founders to teams to managers: What works and what’s missing

A recurring insight from our conversations in Nairobi was that successful founders are often experts in the product or service at the heart of their business. Antler, for example, selects entrepreneurs with deep sectoral experience and focuses its training on turning good ideas into viable businesses rather than teaching technical skills. This suggests that while deep domain knowledge is hard to build quickly, entrepreneurs can be trained to scale ideas.

At the same time, the existing evidence base is limited. Most existing research on entrepreneurship training focuses on people already running firms. Less is known about what enables individuals to start businesses. Recent experimental research in Ghana, Tunisia, and Uganda is beginning to address this by providing training in high-growth settings such as universities, and focusing on early-stage activities such as idea development, business planning, and raising finance.

Another promising direction is identifying high-potential founders early. Evidence from Nigeria suggests that business-plan competitions, especially when combined with mentoring or accelerator support, can generate high-growth firms. An entrepreneur's professional network can be an additional source of valuable information and opportunity.

Conversations with the Kenyan National Innovation Agency (Kenia) highlight the important role that government initiatives can play in identifying and supporting promising entrepreneurs when private sector investment may fall short. For instance, Kenia partners with local universities to implement mentorship programs to help researchers and local start-ups turn ideas into viable businesses, and creates marketplaces that connect start-ups, researchers, and innovators with potential funders and customers for increased partnerships. The agency also runs national competitions where entrepreneurs from all over the country can pitch ideas and compete for grants and support. 

Why teams matter

Entrepreneurship is rarely a solo activity, yet many programs focus on individual founders. Conversations in Nairobi underlined that growing a firm requires teams and access to specialized skills. Antler, for example, builds founding teams by matching people with complementary technical, commercial, and operational skills. Venture studios such as Purple Elephant Ventures go further, by offering shared services, e.g., technology, HR, finance, marketing, legal, and operations, that allow founders to focus on product development and execution.

This reflects what we know from organizational economics, which emphasizes the value of putting the right people together and allowing for specialization. In practice, many small firms in Africa lack specialization and operate without this division of labor, with founders and employees covering multiple roles. Experimental evidence shows that firms perform better when they gain access to specialized skills, for example, through hiring, outsourcing, or consulting, than when support focuses on founders alone. Team-based approaches, including managerial support, peer learning, and group incentives, also tend to create more lasting improvements than individual training. The implication is clear: supporting high-growth entrepreneurship means supporting people and teams. 

Building local management capacity

As firms grow, they increasingly need skilled managers, especially local Chief Financial Officers and senior commercial leaders, who can handle finance, strategy, and expansion. In many developing countries, firms struggle to hire for these roles. This may reflect both skill shortages and firms’ difficulty identifying the right candidates, making local hiring costly. As a result, firms often rely on expats, former founders, or Development Financial Institution-provided mentorship – helpful but insufficient substitutes for domestic talent.

Recent evidence confirms this by showing that a high share of entrepreneurs in Africa are white, and have been either educated and/or have relevant work experience from outside of their home country, when compared to the overall population. Some firms have found ways to build local capability. Jumia, for example, shifted from expat-heavy teams to hiring and training local managers, reducing costs by about 50 percent while achieving roughly 80 percent of the same efficiency.

Yet, this remains the exception rather than the norm. Retention challenges, difficulty screening local talent, and high fixed costs of internal training may explain why not more firms follow this model. While there is evidence on vocational training and job-search support for lower-skill workers, much less is known about how to develop, match, and retain high-skilled managers in growing firms. 

AI, digital skills, and the risk of being left behind

Finally,  AI is increasingly reshaping how people work and what skills firms need to compete and grow. As discussed in the first post of this series, firms are already integrating AI in diverse ways. In Nairobi, conversations with Qhala highlighted that beyond adoption, a central challenge for high-growth firms is building the local capabilities needed to effectively use AI tools, develop relevant applications, and adapt models to African market realities.

This includes developing much needed energy and digital infrastructure locally to support home-grown AI capacity, strengthening digital literacy within firms, training teams to work alongside AI systems, and developing the technical expertise required to build and refine models using local data.  

Yet, while AI use is growing, rigorous evidence on how AI is actually changing work inside firms, especially in developing country settings, remains limited. While these concerns are global, developing countries face the additional challenge of a persistent digital divide. Recent literature has focused on how to foster the adoption of digital technologies such as mobile money, but far less is known on how to build the skills and institutional capacity required to develop context-specific AI solutions that close skill gaps and strengthen firm capabilities across the continent.

Strengthening skills: Directions for research and policy

Insights from our conversations with practitioners and the existing evidence point to key gaps in knowledge about how to strengthen people and their skills in a way that supports inclusive financing and economic development. Beyond these, what is also required is a better understanding of education and training systems that align with local labor‑market needs, and how to develop local talent in areas such as financial management, operations, and strategic leadership — skills that are all essential for scaling, attracting capital, and thereby contributing to sustainable development.

First, how can high‑growth founders be identified and supported early?

To design interventions that go beyond supporting existing firms and instead focus on the people most likely to build the next generation of high‑growth businesses, we need a better understanding of the following questions: How can high‑potential founders be identified early in ways that are reliable, scalable, and cost‑effective? Do programs perform better when targeted at groups with high growth potential, such as university students or individuals with prior sector experience? How can government programs effectively complement the role of private sector driven investment in identifying and supporting high-growth entrepreneurs?

Second, how can entrepreneurship programs best support people and teams to build firms that scale and grow sustainably?

What models are most effective at helping founders find and retain complementary team members as firms grow? When do shared services or venture‑studio models outperform firm‑level support or founder‑only training? What combinations of people, skills, and support matter most at different stages of firm development?

Third, how can firms build and retain strong local managerial talent to support sustainable firm growth?

Better understanding how firms can build and retain local leadership talent is key to enabling firms to scale and reduce reliance on external talent. What prevents firms from hiring and retaining capable local managers, and which barriers matter most? What structures of compensation contracts are effective for attracting and retaining skilled local managers? Which actors (DFIs, accelerators, venture studios, or public institutions) are best placed to invest in developing managerial talent and matching people to firms? Do credit constraints, misperceptions about returns to skill investment, or search frictions explain underinvestment in high‑skill and managerial talent? How can pipelines within existing education systems be created to produce entrepreneurs with high-growth potential locally?

Fourth, how can firms build the skills needed to harness the benefits of AI?

Leveraging the productivity gains of AI will be critical for African start-ups to grow and remain competitive in fast-changing markets. How can firms train and retain workers who can use AI tools effectively and adapt them to the context of African markets? How can education systems be reformed to equip a broader population with the technical expertise required to adopt AI in ways that drive high-growth entrepreneurship?

J-PAL’s Finance policy team is working to support new research projects that answer important questions on financial inclusion and innovation and  draw out results from multiple studies to identify key insights relevant to policymakers and financial institutions. Stay tuned for future posts in this series outlining more evidence-informed approaches to expanding access to financial services, enabling innovation, and building economic empowerment. Subscribe to receive updates.

* We would like to thank all finance-sector stakeholders we were able to meet in Nairobi for their insights and openness: Antler East Africa, Baridi, Beyond Capital Ventures, British International Investments (BII) in Kenya, Central Bank of Kenya, Enza Capital, Equity Bank Kenya, FASA - Financing for Agricultural SMEs in Africa Fund, Fleetsimplify, Flourish Ventures, IETP - Investisseurs et Partenaires, IFC Kenya, Ketha Africa, Kukua, NALA, NCBA Bank Kenya Plc, Norfund, Onafriq, Proparco, Pure Infrastructure Ltd, Qhala, Sayuni Capital, Stanford Seed East Africa, TLCom Capital, TLG Capital, Untapped Global, VestedWorld, ZEP-RE (PTA Reinsurance Company), and 4C Group.