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South Africa : Alive with possibility?

That South Africa post 1994 is a country alive with possibility is indisputable. That it is also a country lacking in sufficient numbers of entrepreneurially minded individuals is, unfortunately, equally so. Since South Africa first participated in the Global Entrepreneurship Monitor (GEM) Report in 2001 it has almost consistently declined, year on year, in terms of its level of entrepreneurial activity relative to all participating companies (see block below). Most importantly, the GEM Reports from 2002 to 2005 all report that in all measures of entrepreneurship South Africa ranks lowest of all developing countries.

Year Ranking
2001 14of 29 (48%)
2002 19 of 37 (51%)
2003 22 of 32 (69%)
2004 20 of 34 (59%)
2005 25 of 35 (71%)

Why is it that despite all the possibilities that exist in this “land of opportunity”, South Africa has the lowest entrepreneurial activity rate of all developing countries? In addition, why is it that, with the exception of Mexico, South Africa has the lowest success rate of start-up businesses?

The impact of education on entrepreneurship

The GEM reports for the past three years have all stated that South Africa’s low rate of entrepreneurship can be attributed to the low proportion of individuals that have completed secondary school. GEM 2005 specifically states that “South African adults who do not have tertiary education are significantly less likely than their counterparts in other developing counties to be able to sustain an opportunity-motivated new business venture. This implies that South African schools are doing far less than schools in other developing countries to develop the skills required for entrepreneurship”.

What skills are entrepreneurial skills?

This report goes on to conclude that “equipping schoolchildren with entrepreneurial skills has emerged as the key means of combating South Africa’s persistent unemployment rate”. One of the most important skill sets identified in GEM 2005 if financial arithmetic and mathematics. But is it really mathematics that makes or breaks an entrepreneur? The South African Institute for Entrepreneurship believes that it is perhaps more critical to develop an entrepreneurial mindset – a questioning approach to life – together with the confidence and competence to pursue new and innovative solutions upon which businesses are based. Unlike many other approaches to the teaching of entrepreneurship, the SAIE believes that the only really effective method for developing such a mindset is to promote discovery learning and learning by doing. We truly believe that “the essence of entrepreneurial activity is endowing resources with new wealth-producing capabilities – that is, seeing and actualising productive possibilities that have not been seen and actualised before” (Dr Nathaniel Branden). To this end, the SAIE’s learning material are all based upon simulation training methods that provide an experiential learning framework within which to discover. One of the SAIE’s earliest developed materials illustrates the process of learning how to question and to think. In “Bambelela Learns to Question”, a story informing the simulation of the Grade 4 Business Ventures programme, Bambelela is visited in his dreams by various wise animals who teach him how to think and question. These animal mentors represent different ways of thinking – different approaches to business problem solving, each of which is valuable. They are, in a nutshell, thinking tools, enabling Bambelela to view the opportunity (problem) from different perspectives and ask different kinds of questions to empower his development of a solution. The rhino’s strength (as a problem-finding mentor) lies in his attention to detail, the giraffe (also a problem-finding mentor) has the ability to see the wider context of the big picture. The elephant, buffalo and monkey, on the other hand are problem-solving mentors contributing personal experience, the strength of teamwork and the inventiveness of creativity and innovation respectively. The action-oriented lion focuses on “just doing it” whilst the owl complements this action with an evaluative verification, double-checking and aiming for perfection. The story introduces a simple idea – that thinking means developing a habit of using questions to guide your mind. Being able to answer questions is valuable, but it is not nearly as valuable as being able to pose questions. New, lateral problem-solving questions guide the mind to think in new directions.
Ultimately knowing what kinds of questions to ask in different situations is uniquely empowering. Indeed, this ability is perhaps the single most powerful quality of an entrepreneur. Being able to think, ask questions and act is vital to a successful entrepreneur. Openness to ideas, thinking for oneself, breaking the rules, stepping outside the square, being alert to opportunity, quick to action, passionate to make a difference – these are the skills necessary, the skills that come to the fore in the experience of doing. These skills matter.

“For the things we have to learn before we can do them, we learn by doing them” (Aristotle)