The enterprise development sector is often seen as the panacea to South Africa’s job creation woes. But if this sector is to succeed in enhancing economic inclusion, serious attention must be paid to creating an enabling environment which supports emerging entrepreneurs. The South African Institute for Entrepreneurship (SAIE), a leading enterprise development NPO, believes that the key to success is to cultivate an entrepreneurial mindset, especially among the country’s youth.
A challenging task The overall objective of enterprise development is to grow local economies and to create jobs. The challenges are enormous, and the sector is up against multiple obstacles in trying to move viable small businesses beyond survivalism and ensure their sustainability. Government institutions such as the Department of Trade and Industry (dti) are constantly trying to find the right mechanisms to develop this sector, through interventions such as business hubs or skills development centres. The approach of the NGO sector is often more focused on localised issues of empowerment and access to capacity-building resources , and is not always developed through a macro-economy strategy. However, despite sharing the same overarching vision the enterprise development sector is fragmented and key role players often miss each other through the simple mistake of language confusion. For example, terms such as ‘job creation’, ‘skills development’, ‘entrepreneurship’ and ‘enterprise development’ are often used interchangeably when in fact they refer to different aspects of a complex process.
We need to build an entrepreneurial culture From our viewpoint, the foundation for a robust enterprise development sector is a strong entrepreneurial culture. Once this base has been established there is more chance that a successful enterprise will be established – which in will employ people – creating jobs. Job creation is therefore an outcome of successful enterprise development which requires a strong entrepreneurial foundation.
To achieve this the starting point must be to develop entrepreneurial mindsets among the country’s youth. The education system is therefore a natural entry point for instilling new mindsets. However, entrepreneurial development (nor enterprise development for that matter) is currently not a focus of the new curriculum. There are enormous gaps and learners are often unprepared to meet the challenges that face them when they leave school. Conversely, there is a great emphasis on maths and science education as the gateway to professional careers, and while these are important areas, equal emphasis should be placed on enterprise and entrepreneurial development.
Changing mindsets In order to grow the entrepreneurial mindset and develop entrepreneurship, SAIE has developed school-level interactive entrepreneurship learning materials aimed at youth. This has been achieved by using methodologies that develop entrepreneurial qualities while at the same time meeting the curriculum requirements of the Department of Education. Within communities the focus is on developing the entrepreneurial skills of new and small business entrepreneurs. SAIE’s programmes assist enterprises in the agricultural, tourist and small business sectors. SAIE works with in partnership with organisations in these sectors by providing the entrepreneurial and enterprise development training which assists emerging entrepreneurs to move beyond daily survival strategies.
An enabling environment In the corporate sector, the BEE Codes have turned the spotlight on enterprise development. But while the commitment of South African companies is commendable, it is not the core business of the sector. The government must therefore provide clearer leadership to guide both CSI and the enterprise development agenda. An enabling environment which supports enterprise development could also be pursued more vigorously through clearer inter-ministerial co-operation. For instance, the Department of Communications and the dti should have a common programme to facilitate cheaper communications for enterprise development. The cost of connectivity in South Africa is one of the highest in the world, and if enterprise development is to be a serious area of economic growth, this will have to change.
Strong leadership While challenges remain, the future of enterprise development is not all bleak. On the positive side changes in relation to the registration of companies and completion of tax forms have made these processes less cumbersome and restrictive. This certainly helps new entrepreneurs. However, restrictive barriers such as red-lining in the banking sector and cumbersome dti regulations remain. These obstacles inhibit business innovation and entrepreneurial creativity. Finally, if this country is to grow an economy which rewards purposeful social investment which encourages entrepreneurship, there must be a stronger sense of government leadership in this complex arena.
Name: South African Institute for Entrepreneurship (SAIE)
Director: Margie Worthington-Smith
Date established: SAIE was born out of the Triple Trust Organisation in 1996
Areas of operation: Nationally and internationally in the education, small business, agricultural and tourism sectors.
No. of educators trained since May 1997: 14,175
No. of learners reached since May 1997: 380,740 No. of emerging farmers trained since 2005: 2,000 Website: www.entrepreneurship.co.za