Entrepreneurial ecosystem pillars, competitive advantage and performance of manufacturing small and medium enterprises in Uganda

Abstract

The study examined the role of entrepreneurial ecosystem pillars and competitive advantage on the performance of manufacturing SMEs in Uganda. It was guided by four specific objectives which include; to investigate the relationship between entrepreneurial ecosystem pillars and performance of manufacturing SMEs, to establish the relationship between entrepreneurial ecosystem pillars and competitive advantage of manufacturing SMEs, to examine the relationship between competitive advantage and performance of manufacturing SMEs and to establish the mediating role of competitive advantage in the relationship between entrepreneurial ecosystem pillars and performance of manufacturing SMEs in Uganda. This study also sought to answer a research question; what is the role of entrepreneurial ecosystem pillars and competitive advantage on the performance of manufacturing SMEs in Uganda? The study employed a mixed methods research approach and a descriptive research design that was explanatory sequential to address the stated research objectives and answer the research question. A sample of 330 manufacturing small and medium-sized enterprises (SMEs) were selected based on their homogeneous business characteristics for quantitative data. Whereby proportionate and stratified simple random sampling techniques were employed to select the final respondents for quantitative survey who were either owner-managers or managers of Manufacturing SMEs in Uganda. After which, criterion purposive sampling was employed to select the final respondents for qualitative data which consisted of 10 key informants from government Ministries, Departments and Agencies concerned with the manufacturing sector. Qualitative data were collected mainly to explain key insightful findings from the quantitative survey. Whereas quantitative data were collected using a Self-Administered structured questionnaire, qualitative data were gathered using a semi-structured interview guide. For quantitative data analysis, AMOS and Structural Equation Modelling (SEM) were used to determine the predictive power of the independent variables on the dependent variable. Whereas qualitative data were analysed using NVivo v15. The results revealed that presence of supportive formal institutions such as; reduction in corruption and bureaucracy while accessing critical resources, easy access to low-cost finance and formation of strong supportive networks enable manufacturing SMEs gain a competitive advantage by reducing manufacturing costs and creation of quality goods at affordable prices which consequently leads to improved performance in form of increased sales, manufacturing output and creation of more jobs. Therefore, much as the presence and interconnectedness of entrepreneurial ecosystem pillars leads to improved performance of manufacturing SMEs in Uganda, the relationship is stronger when competitive advantage is introduced as a mediator. Henceforth, the study recommends that the government of Uganda designs supportive formal institutions, provide low-cost finance and encourage formation of supportive networks by manufacturing SMEs with other ecosystem players for them to access critical resources cheaply and gain information on what to produce, how to produce, when to produce and whom to produce for. However, all the above ecosystem pillars should be interrelated and be implemented in a coordinated manner because they affect each other in tandem, rather than developing interventions that target each entrepreneurial ecosystem pillar individually, as its being done currently

Subject keywords: Entrepreneurial ecosystem pillars; competitive advantage; performance; manufacturing enterprises; small and medium enterprises; Uganda