South Africans should be proactive and help cultivate a start-up culture
Entrepreneurs need support from all quarters as they can create employment and attract foreign investment
The state of our economy is the result of not only global difficulties, but our own failings, lack of foresight and lack of a national vision. With creativity and co-operation among all stakeholders, problems such as unemployment, the brain drain and social fragmentation can be solved.
The Wandile Zulu Foundation and Batlagae Trust recently hosted a youth economic crowdstorming summit to facilitate a forum where young entrepreneurs can share a vision with the aim of kick-starting the economy.
San Francisco, Tel Aviv, Berlin, Copenhagen and Beijing have become booming tech start-up hubs, attracting jobs, investments, scarce talent and so much more. Entrepreneurs in such cities are solving real problems affecting millions of people, while encouraging others to take the plunge into the entrepreneurial deep end.
SA too could leverage this potential by unlocking barriers to the four major components of a start-up ecosystem: talent, investors, culture and government. Only when these components are in tune will you hear the beautiful melody of start-up success.
There is no question that entrepreneurship would help turn the tide against endemic unemployment and introduce foreign investment and talent to SA. Although we have a healthy investment community, the number of early-stage start-up investors is minimal. Our investors just don’t have the same risk appetite as some international funders, who will happily invest in 100 early-stage businesses knowing that only one or two will be breakout successes. SA has a number of tech incubators and accelerators with exciting projects but we need more if we are to make a difference. Exceptions are Cape Town and Stellenbosch, which are building the culture necessary for start-ups to thrive.
One of the reasons other regions have succeeded is because of government involvement, which is essentially composed of participation and regulation. Participation can take many forms from encouraging and financially supporting startups and research & development, running incubators and training entrepreneurs, to providing access to capital. Regulation requires a wholesale review of the state-imposed hurdles that are hampering business and deterring talented would-be immigrants. Successful countries have immigration and visa laws that encourage talented youths and professionals.
Immigration is a major factor in SA, comprising 17% of our annual population growth with 230,000 new international migrants arriving every year. Despite this, our skills shortage in the public and private sectors is impeding our ability to grow.
According to a study published in 2017’s white paper on international migration, 520,000 South Africans emigrated from 1989-2003, of whom 120,000 held professional qualifications. This was eight times the number of professional immigrants in the same period.
The white paper recognises that SA’s immigration policies impede access to global opportunities and human talent. Conversely, attractive migrant destinations offer a clear path to citizenship, including full social and political rights.
Immigration attorney Stefanie Darbandi says home affairs has a history of introducing legislation without sufficient notice, consultation or training. The white paper could be law early in 2019, before stakeholders have had the opportunity to comment, and the critical skills list was compiled by relevant government departments but they never received input from the private sector, which is primarily responsible for job creation.
To make the workforce less parochial and more globally competitive, the department of labour could give employment equity weighting to foreign nationals with scarce skills with the proviso that they transfer their skills to previously disadvantaged South Africans, as in the Rwandan model. Singapore has an “entrepreneur pass” for serial entrepreneurs, high-calibre innovators and experienced investors.
With such high unemployment, SA should make it as easy as possible for foreign entrepreneurs to launch start-ups that create jobs and contribute taxes. While New Zealand proactively markets itself as a destination for skilled migrants, SA waits for applications. It also does not offer an integration programme for recent arrivals, which could be a contributing factor to rising xenophobia.
Botswana uses skilled migration to help meet capacity in certain sectors, such as nursing and teaching. The private sector and government meet monthly to identify the skills gaps as they arise, and information is passed on to Botswana’s foreign missions for active recruitment.
In an era of globalisation, where countries are competing for foreign talent, SA must reform its immigration policies in order to attract the best minds. As a starting point, we should interrogate the white paper before it becomes law without receiving sufficient feedback from the private sector. SA needs to improve its schools and encourage more Stem (science, technology, engineering and maths) graduates, while universities should work harder to turn their ground-breaking research into viable businesses.
We need to build a start-up culture, encourage risk and applaud entrepreneurs. We have great opportunities for those brave enough to tackle them. South Africans tend to expect the government to solve society’s problems, but while it has a big role to play, it cannot do much without the support of all. Instead of mobilising with violent protests, citizens need to conceptualise and implement creative solutions.
The Empowervate Trust in collaboration with the department of basic education is a programme that imparts positive values to people who take part in its youth citizens action programme, which encourages active citizenship and social entrepreneurship. Instead of starting a business to merely create personal wealth, young people are encouraged to become more mindful of the impact they can make. The millennial generation is more in tune with this school of thought, realising that it rests on its members to create a world it can be proud of. Skills to help them fulfil this role include teamwork, leadership, time management, communication, public speaking, IT and basic financial management skills.
To develop the next generation of contributing members of society, we have to start at school, teaching children practical skills, values and morals which they can put into action by being active citizens.
We have a long way to go if we are going to create a country in which every citizen has a stake and has something to work for. We all need to be far more proactive and inspired if we are going to develop SA into a world-class destination that attracts the world’s best and brightest. It’s not the job of just the government or the private sector to shape our future. It’s in our hands.
Blankfield-Koseff is founder and CEO of the Empowervate Trust/Ycap, Brotman cofounder of En-novate, and Seeff cofounder of How We See solutions.