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Archives of Business Research – Vol. 10, No. 11

Publication Date: November 25, 2022

DOI:10.14738/abr.1011.13489.

Wood, V. R., & Muzata, S. (2022). Enhancing International Business Development Between the United States and Africa by

Implementing the Vibrant International Trade Alliance Model (VITAL - M). Archives of Business Research, 10(11). 251-275.

Services for Science and Education – United Kingdom

Enhancing International Business Development Between the

United States and Africa by Implementing the Vibrant

International Trade Alliance Model (VITAL - M)

Van R. Wood

Philip Morris Endowed Chair in International Business

Director- VCU Center for International Business Advancement (CIBA)

Professor of Marketing, Virginia Commonwealth University

Richmond, Va. 23113

Sombo Muzata

Assistant Professor, Department of Political Science

James Madison University, 91 East Grace St., MSC 7705

Harrisonburg, VA 22807

ABSTRACT

International Business development requires a complex mix of market

opportunities, political stability, confidence in the rule of law, a strong economic

base, financial resources, and perhaps most important - an educated, knowledge

embracing workforce that translates into global market expertise. Local, regional,

national and international business development in Africa has traditionally lacked

much of this mix and as it followed a tradition of natural resource exploitation, with

little intellectual value added. This, for the most part has resulted in it

“underdeveloped” status at worst or “developing” status at best when compared to

much of the world. However, important examples exist where Africa in certain

sectors is increasingly embracing knowledge resources. One area in particular,

entrepreneurship, embedded in small and medium sized enterprises (SMEs) holds

much promise for Africa’s development. This is particularly true when innovative

entrepreneurs are knowledgeable about global markets, especially those with

growing urban consumers and international trade opportunities. Developing such

entrepreneurs and connecting them with – 1) government agencies charged with

enhancing international trade (AITs), 2) public institutions of higher education

(PIHEs) charged with educating the next generation of globally competitive

business leaders and 3) domestic small to medium sized enterprises (SMEs) seeking

new growth opportunities in the world-wide business markets can result in African

business development that is super-charged. This paper explores a proven model

for such development, labeled VITAL – Model (Vibrant International Trade

Alliances Model). To fully grasp the nature and possibilities of this model for Africa,

this paper - 1) over-views the realities of globalization that have created

unprecedented opportunities for SMEs around the world, 2) highlights the

importance of entrepreneurship in moving SMEs to the next level of wealth

creation, 3) presents the VITAL Model developed in a globally engaged U.S. state

(Virginia) to foster entrepreneurial expansion into international markets, 4)

explains how the model can be applied to African countries and to partnerships

between public institutions of higher education (PIHEs) in Africa and their U.S.

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Archives of Business Research (ABR) Vol. 10, Issue 11, November-2022

Services for Science and Education – United Kingdom

counterparts, and 5) provides managerial, policy and future research implications

related to this boundary spanning way of thinking.

Keywords: Global Entrepreneurship, Africa, Vibrant International Trade Alliance

(VITAL), Public Institutions of Higher Education (PIHEs), Government Agencies for

International Trade

GLOBALIZATION – WHAT IT IS AND WHAT IT MEANS?

To provide the context for the focus of this paper a brief look at “globalization,” including what

it is and what it means is useful. Globalization has been described as a force that has ignited

global connectivity among nations, societies, cultures and enhanced international trade at a

level rarely seen in human history. For business, particularly private, for-profit business this

force and its effects has been and is substantial (Friedman 1999; National Geographic

December 2019). And despite the recent global recession (driven primarily by the Coronavirus

pandemic), a growing consensus is that a recovery (albeit with altered economic opportunities

and challenges) has commenced (https://www.Medicalnewstoday.com., April 16, 2020;

Soergel 2020; http:www.mckinsey.com, June 16, 2021).

Between 1989 and late 2019 (right before the start of the pandemic), the world’s GDP (Gross

Domestic Product), driven considerably by global trade, rose from approximately $21 trillion

to approximately $92 trillion, with the emerging markets of China, India and Brazil, joining the

developed markets of the USA, Japan, Germany, United Kingdom, France, Italy and Canada in

the top 10 countries by GDP worldwide (International Monetary Fund: World Economic

Outlook Database 2019). The small to medium-sized enterprises (SMEs) that participated in

this growth benefited greatly (Wood 2018).

An historical perspective may future shed light on this phenomenon. In 1989 the Berlin Wall

fell and two years later the Soviet Union imploded (1991-1992). During this period, the old

super story of our time – communism versus capitalism (central planning vs. market-based

resource allocation) was replaced by globalization (the current super-story of our time). In a

noticeably short period, the barriers and walls that had divided the planet for approximately

seventy-five years departed (Friedman 2005). Just over a decade later it was apparent that

globalization was fostering a process by which nations, businesses and cultures were becoming

more interconnected (economically, socially, and environmentally) across the globe (Ali 2000).

Specific results included - 1) efficiencies in supply chains and transportation which cut costs

dramatically for goods and services, 2) enhanced trade agreements that brought decrease

tariffs and non-tariff impediments to global business, 3) wide-embrace of advanced

technologies to communicate information, ideas, innovations, and market insights quickly and

inexpensively around the world, 4) an expanding cadres of new exporter and importers

searching for promising international business options, and 5) significant migration of rural

populations to urban areas in search of better employment opportunities, richer lifestyles and

more education for their children. In the big emerging markets, these results were subsumed

under the moniker “the rise of the rest,” which entailed an immense growth of a new middle- class consumer in what was formerly known as the undeveloped world (Zakaria 2008, 2011).

Globalization means millions, if not billions of formerly disenfranchised people could now

compete and are competing in world markets and achieving more prosperous and better lives.

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Wood, V. R., & Muzata, S. (2022). Enhancing International Business Development Between the United States and Africa by Implementing the Vibrant

International Trade Alliance Model (VITAL - M). Archives of Business Research, 10(11). 251-275.

URL: http://dx.doi.org/10.14738/abr.1011.13489

To fully take advantage of globalization two perspectives are useful – 1) a broad sense of how

the world as a whole is changing. and 2) a more subtle understanding of the changes happening

in individual markets, particularly those emerging from economic isolation. Consider these

realities. The percent of people living on one dollar a day or less has dropped from 40% in 1981

to 18% in 2004 and is predicted to be 10% or less by 2030. Over the last 25 years, China lifted

400 million people out of poverty. By 2050, it is projected that China will be the largest economy

in the world by a significant margin, India may have edged past the U.S. into second place and

Indonesia may be in fourth place, while the 27 states of the European Union’s share of global

GDP may drop below 10%. Given a retreat of the current Covid 19 pandemic and the embrace

of sustainable energy sources, the world economy could more than double in size between now

and 2050, far outstripping population growth (PWC 2017).

Global trade is spearheading growing prospects in countries housing 80% of the world

population. Indeed, over the last 30 years, two to three billion people have entered the world

of business and trade. While the debate on the benefits of globalization persist (see Reeves

2019, Hanson 2019), and others speak of an end to globalization give the contemporary

realities of the Russa – Ukraine war (Khlebnikov 2022), many observers agree that over the last

thirty years, the force of globalization has generated enormous wealth and has provided

unprecedented opportunities for a better life to billions of people around the world (Collins

2015; Ghemawat and Altman 2019).

Globalization has become the “super-story” of our time. With this has come the willingness of

organizations of all sorts (for profit, not-for-profit, MNCs, SMEs, NGOs, etc.) to venture into the

far reaches of the planet seeking new markets, secure supply chain alternatives, and

opportunities from those left at the broad “bottom of the population pyramid,” ( i.e., those who

would not have been considered viable markets in the past - see Pralahad 2004; The Economist

2010; Wood 2018). U.S based organizations, in particular small to medium sized enterprises

(SMEs) began to expand overseas as never before, realizing that 96% of the people and

approximately 65% of the world’s productive resources lay outside the U.S. border (Wood and

Harrison 2015).

ENTREPRENEURSHIP – SMES AND GLOBAL WEALTH CREATION

Today, technology allows pursuit of markets that are increasingly fragmented, even the

smallest participants see opportunities. Indeed, global trade by small entrepreneurial firms has

grown significantly. This shift by smaller more flexible enterprises started even before the

modern age of globalization. Examining data on entrepreneurship activities during the 1970s

and 1980s, Acs et. al. (1994) examined 23 OECD countries and found that 15 experienced

increased entrepreneurship and international market pursuit during this period. This pace of

entrepreneurial international business development accelerated during today’s era of

globalization due to what Friedman (1999) coined as the” “democratization of information,

technology and finance.” These three phenomenon allowed small to medium sized enterprises

(SMEs) to compete more rigorously with larger enterprises in far-flung markets. Undeniably,

the development of new technologies (computers, cell phones, cable systems, teleconferencing

and Internet connectivity, social media marketing), new open sources of information

(computer browsers, data bases, satellite images) and new sources of financing (junk bonds,

commercial paper, securitization of home mortgages, crowd funding options), has allowed a

multitude of smaller firms to be “born global” and compete with more effectively with