In contexts of poverty, most entrepreneurs create ventures by imitating – but not duplicating – businesses that already exist. While doing this, evidence is clear that some degree of incremental innovation occurs. Unfortunately, there is little understanding of where this innovation comes from. Given that innovation is widely held as critical for entrepreneurs in contexts of poverty, we undertook a qualitative inductive study of 26 Ghanaian entrepreneurs. Across 11 years of data collection, we inquired into the 81 ventures they had collectively started. We unexpectedly found that innovation was shaped primarily by the source of knowledge – rather than resources, connections, or customer access – on which entrepreneurs relied to understand the basic ‘template’ underpinning a venture. Here, five distinct sources of knowledge led to five distinct types of innovation. Moreover, across their careers entrepreneurs tended to progress towards source of knowledge associated with greater degrees of innovation. From these findings we reconceptualize the importance of knowledge in contexts of poverty, contribute to the growing understanding of entrepreneurship as heterogeneous, and make practical recommendations.
