The latest Global Entrepreneurship Monitor (GEM) report was published recently. I can only find a copy of the 2005 report (which has been out for quite a while). -I suspect the latest one is the 2006 report. I have drawn this post from the Business Day SA falls down before it can start up.
The article finds that the South African uptake of entrepreneurship has declined. The report notes that
This downward trend spells trouble for the South African economy in the long term. GEM specifically tracks and studies early stage and young businesses. These businesses are critical to an economy because they form the new basis from which it can expand and stimulate accelerated socioeconomic growth and development.
With a young population and without a healthy influx of such businesses into the system, more pressure will be exerted on existing businesses to create wealth.
And if total early-stage entrepreneurial activities are not improved quickly enough, the danger exists that the dependency level on the existing businesses will become too much and the economy will stall.
The report found that the problem lies in the fact that "potential entrepreneurs lack the mindset and skills to become true entrepreneurs". Part of this is the education level of the business owner.
Some of the recommendations contained in the report include education and training of relevant skills and better mechanisms of support. It identified nine key areas a being necessary conditions that must be in place for entrepreneurship to thrive. These areas include:
- access to finance,
- government policies,
- government programmes,
- education and training,
- transfer of research and development,
- commercial, legal and financial infrastructure,
- openness of the domestic market, and
- access to physical infrastructure.
And what then about enterprise development?
Two points
- These areas could become an integral part of an enterprise development strategy. If you have an ED policy, incorporate these into it. It will increase the chances of the programme succeeding.
- Why on earth has the ED code (600) been limited to black owned businesses? I've argued this fact before - we need more sustainable businesses, and this report corroborates this fact. I would want to put my ED money into something that I thought would have the best chance of succeeding - and I wouldn't want to be limited to one race group in looking for beneficiaries.
End quote
SA needs more start-ups and entrepreneurs to make it work, as well as a higher level of business acumen and involvement. If a co-ordinated and focused way of supporting entrepreneurship can be developed and maintained over time, the chances of creating and maintaining a sustainable entrepreneurial SA should be high.
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