institutions are investing increasing resources to promote entrepreneurship. Ethiopia needs to gain a greater understanding of the ways in which entrepreneurial capacity can be harnessed for overall economic development. In particular, there should be more of an effort for a greater understanding of the sources of entrepreneurial growth in the economy, especially the informal sector and small and medium enterprises, and how public policy may strengthen the contributions of entrepreneurs to innovation, technological catch-up, and competition. Key issues that should be addressed include: (a) the concept and measurement of entrepreneurship; (b) the influence of entrepreneurship on economic development, (c) the institutional prerequisites for a dynamic entrepreneurial and small business sector; and, (d) the regional and country level dynamics of entrepreneurship. Infrastructure 83. The state of physical infrastructure in Ethiopia is a serious hindrance to development. Indicators, such as those for road network density, access to electricity and water, telephone and internet access, are all worse than subSaharan Africa averages. The government’s ambitious road expansion and improvement programme is commendable, as shown in Box 2.4. This programme is already lowering the very high transport and market development costs, especially in rural areas. In the case of electricity, government has opened up generation to the private sector but not the natural monopolies of transmission and distribution. However, the private sector response has been limited. 84. A very contentious issue surrounds the telecommunications policy where there is a state-owned monopoly: the Ethiopian Telecommunications Corporation (ETC). Halting liberalisation has been confined to allowing joint ventures with ETC in some areas, such as cellular phones. There has been virtually no interest from either foreign or domestic investors in such joint ventures. 85. Ethiopia had cutting-edge technology at the turn of the century. The introduction of telecommunications in the country dates back to 1894, seventeen years after the invention of telephony. While the Ethiopian Telecommunications Corporation is the oldest public telecommunications operator in Africa, it is still a monopoly. This has stifled innovation and retarded expansion. - 62 -