The information paradox

The role of information is key in informing people and players on how to act during a game. Information informs strategic decisions at many individual, business, community, government, and global levels, empowering these actors to act and behave in accordance with the information provided. When you go to a job interview, they provide information about your background and qualifications as a signal to a potential employer about your ability and competence. The economists Spence (1973) and Stiglitz (1975) initially proposed the idea of ​​signaling and screening in their studies. As we find ourselves in the information age, it has become more and more easy to collect various pieces of information, mainly due to the emergence and advancement of information and communication technologies around the world with platforms like Amazon. Facebook, Twitter, GitHub, etc

Information technologies have created advantages and efficiencies for many emerging economies, changing the way markets, civic activism, justice, accountability and economic participation are perceived in many countries around the world. Despite the progress made in disseminating information in the socio-economic sphere in Africa, access to credible information has become a long-standing desire and must now be critically advanced to enable and empower key decision-makers. in the efficient allocation of resources. The Mo Ibrahim Foundation, a UK-based African governance foundation, highlights from its research that there is a need to improve statistical capacity, data collection and information dissemination on public and private issues. The research report raises the fact that while the production of information is expensive, which highlights the efficient Grossman-Stiglitz market, it is essential to save costs in the long run and ensure that resources are allocated and combined in the areas correct.

The critical issue here is an information gap emerging in Africa, according to PositivityGlobal.com, and the effect this is having on the growing industry of entrepreneurs is a lack of signals and discovery mechanisms. Active monitoring of qualitative and quantitative elements or variables that affect entrepreneurship should be documented to activate the benefits of being able to discover economic opportunities, execute the respective opportunity, and measure the performance of the opportunity that arises through benchmarking. Just as public companies are forced to present their financial information publicly and bear the brunt of criticism or earn the accolades of heroism, private companies and entrepreneurs must adapt their stance in this information age. This is slowly becoming the standard for private companies and entrepreneurs to disclose “at least” some information if they really want to participate in alternative financing platforms like crowdfunding investment banks. The US Jump Start Our Business Startups (JOBS) Act of 2012 regularizes the voluntary disclosure of information by private companies and entrepreneurs, setting a global precedent for small businesses to at least say something about how they plan to create value if they go to ask. for money even from friends of friends.

These are important developments and affect the way entrepreneurs run their businesses and especially when they require successive rounds of financing in the future. This opinion piece calls for the creation and development of smart knowledge and information that informs markets about African entrepreneurs and small businesses.

References –
Mo Ibrahim Foundation mo.ibrahim.foundation
Positivity Global (Africa) http://www.positivityglobal.com
Spence, M., 1973. Signaling the labor market. Quarterly Review of Economics, 87(3), pp.355-374.
Stiglitz, JE, 1975. “Selection” theory, education, and income distribution. The American Economic Review, 65(3), pp.283-300.