According to the recently released report on entrepreneurship in South Africa (Global Entrepreneurship Monitor 2006), only 5% of South African adults are starting new businesses. This is way below the world average of close to 10%.
Some other interesting stats are :
1) 40% of South African entrepreneurs start a business out of necessity. This in contrast to Australia where 10% start businesses because they feel they have to. I would imagine this is largely due to the fact that we live in a country struggling with a high unemployment rate.
2) Almost half of South African entrepreneurs have only a matric (Grade 12) while 25% have only some level of high school education. Although qualifications are not the be all and end all of business savvy, there can be no doubt that the skills and training received in tertiary education are of great assistance in starting a new business especially in the fields of engineering and information technology.
3) Only 9% of women believe they have the personality traits of an entrepreneur while only 4,8% are actually starting their own businesses. This against the global average of 7.7%! Why this should be so I do not know - could it be the fight many women have in South Africa against a very male dominated economy and traditional views of women in society?
Given that the most likely age-group for start-up entrepreneurs is 25-35, the issue of emigration becomes a cause for huge concern as this is also the age-group most likely to be moving overseas to what they perceive as greener pastures. The latest issue of Succeed magazine puts it like this:
New research suggests that there is a nationwide shortage of mid-career or
management staff in critical industries. This is driving up the numbers of
unemployed graduates as there is now an absence of people with skills and
experience to train new entrants into the workforce.
The statistics show that these graduates are not likely to start their own businesses either and it is these skilled graduates the country needs most. With a high unemployment rate South Africa needs new businesses to create the job opportunities so badly needed, whether that be in a small bakery or a giant manufacturing plant.
Dr Gidoen Maas, the principle researcher for the South African leg of the GEM remains positive though. Quoted in Succeed magazine, he says,
If coordinated and focused ways of supporting entrepreneurship can be
developed and maintained over time, the chances of creating a sustainable
entrepreneurial South Africa should be high.
The future of South African entrepreneurship hangs in the balance. Many primary and high schools now offer entrepreneurship as part of their curriculum. This is exciting and I believe will create the self-belief in our young people that they can begin a new business and make it successful.
What are you doing to foster a spirit of entrepreneurship in your neighbourhood / suburb / city / country? You and I are where it starts. We cannot expect government or big
business to do it - it is up to us!
3 comments:
I don't think that the level of entrepreneurship in SA is declining, merely that the standards across the GEM report are starting to be adhered to. The people at the SA GEM team enjoyed fluffing the figures at the beginning by including needs-based entrepreneurs as genuine types. Stats SA's figures have always put genuine entrepreneurship at around 3.7% of population.
It's a spurious notation in any case since what one is really interested in is economic growth and systems to promote that growth.
And we're experts at it: ... since you asked ;)
Thanks for your thoughts Gavin. I find your comments interesting and I do agree that the most pressing need in the SA economy is the promotion and development of systems that promote economic growth.
I enjoyed your site - some great insights there.
I don't know if readers to your blog know that they can start a business in the USA rather easily due to the loose restrictions on business entrepreneurship in America.
Good luck to all new business starters! :) Vern
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