Despite slow economic growth, South Africa is still ripe with opportunities and society at large needs to expend more resources to identify, facilitate and promote entrepreneurship as the answer to creating jobs and wealth for all. According to Christo Botes, spokesperson of the Sanlam / Business Partners Entrepreneur of the Year® competition, South Africa shouldn’t be looking at entrepreneurship only when faced with prospects of unemployment, but rather a shift towards a viable employment option.
Botes says that entrepreneurship in South Africa, and Africa, largely remains a necessity driven decision, rather than an aspiration. “We need to be celebrating entrepreneurs and promoting entrepreneurship as the most aspirational career path so that it is a first choice rather than a back-up plan.”
He points to the recently released 2016 Global Entrepreneurship Index (GEI) – which measures the quality and dynamics of global entrepreneurial ecosystems and explores how one billion jobs can be created – that ranked South Africa 52nd out of the 132 countries analysed. Ranked first in Sub-Saharan Africa, South Africa is the only country in the region placed within the top 50% of the countries measured in the GEI.
The report highlights that the most entrepreneurial countries in the world are not those that have the most entrepreneurs, but those that are home to the high impact entrepreneurs. For example, the highest self-employment rates are in low-income countries, such as Zambia and Nigeria, where many entrepreneurs are street vendors selling fruit or cool drinks.
“Necessity driven entrepreneurial opportunities require less input and resources, and are therefore easier to occupy. While creating a more sophisticated business is more challenging, the rewards, and knock-on benefits, are greater. We therefore need to be facilitating an environment that supports high impact and growth entrepreneurs.”
Botes says that when comparing South Africa’s ecosystem to that of the United States – which ranked first with a GEI score of 86.2 – it highlights the progress needed in the county for local entrepreneurs to thrive.
The GEI analyses three aspects of an entrepreneurial ecosystem which influence each other, they are: entrepreneurial attitudes - societies’ attitudes toward entrepreneurship, entrepreneurial abilities - characteristics held by entrepreneurs and their businesses, and lastly the entrepreneurial aspirations which reflect the quality features of start-ups and new businesses. The report scored South Africa’s entrepreneurial attitudes 34.4, the country’s abilities 37.0 and aspirations 44.0. In comparison, the US scored 84.4, 84.8 and 89.5 respectively.
Botes explains that entrepreneurial ecosystems are an interaction between multiple stakeholders, and are dependent on each other for entrepreneurship to thrive. This includes a favourable regulatory framework and market, ease of access to financial resources and support services and motivation.
“Government and entrepreneurial organisations are increasingly facilitating entrepreneurship through incubators, mentorship programmes and funding grants, but the country needs to create an environment where individuals are motivated to pursue these options and encouraged to explore innovative ways to pursue new ways of conducting business.”
He adds that South Africa is guilty of celebrating global well-known entrepreneurs but forgetting to acknowledge the local economic heroes who are making a positive difference in their local communities. “Not only are these individuals creating wealth for themselves, but for those they are creating jobs for.
“We need to be recognising those that have made a success of their entrepreneurial endeavours. This was the foundation of the Sanlam / Business Partners Entrepreneur of the Year® competition, launched 27 years ago. Not only does it recognise entrepreneurs’ achievements, but it also spurs them on to achieve greater success and demonstrate to fellow peers and entrepreneurs that it is a viable career path.”
Botes concludes: “Entrepreneurship has many ripple effects which these need to be shared more widely if we are to improve the country’s entrepreneurial ranking next year.”