Where are the entrepreneurial leaders?
THERE IS INCREASING consensus in South Africa about the importance of entrepreneurship in economic development. Although significant steps have been taken towards increasing the level of entrepreneurial activity in SA, many challenges still remain. The Global Entrepreneurship Monitor (GEM) research reveals that four major problems face entrepreneurship in SA, a low level of overall education and training; social factors that do not promote entrepreneurship as a career path of choice; lack of access to finance; and a difficult regulatory environment.
Why does SA find itself in the position it is in spite of agreement on the importance of entrepreneurship in economic development? There are many government and private sector initiatives aimed at promoting entrepreneurial development in SA but the desired results are not achieved. Could this be mainly attributable to the absence of a national strategy that encompasses stakeholders from both government and private sector? Or could it be that there is no aligned commitment, the absence of a common goal, or lack of co-ordination of initiatives on a macro level?
SA needs to upgrade its ways of competing if successful economic development is to occur: our companies must shift from competing on comparative advantages (low-cost labour or natural resources) to competing on competitive advantages from unique products and processes, and move from tapping foreign distribution channels to building our own channels. From the literature on entrepreneurship it becomes evident that entrepreneurship has the potential to improve and increase productivity and ultimately GDP. It is therefore safe to suggest that an increase in entrepreneurial activity could potentially lead to an increase in productivity (and employment) that in turn could lead to an increase in real GDP. An increase in real GDP induces increased sales flows to the different factors of production – managers, workers, landowners, shareholders, and other input suppliers – and national income increases correspondingly.
A national strategy for entrepreneurial development in SA should be established to spearhead and co-ordinate entrepreneurial development on a national level. The ultimate purpose is to induce economic growth and make SA a stronger competitor in the mainstream global economic arena. One vehicle that could bring such a strategy to fruition is a unified national centre consisting of stakeholders from government and private sector to lead and co-ordinate entrepreneurial development across the country. The four key performance areas should address the afore-mentioned problems: improve the level of overall education and training; promote entrepreneurship as a career path of choice; improve access to finance; and influence policy in terms of the regulatory environment.
Social and organisational psychologist Kurt Lewin conceived of change as modification of those forces that keep a system’s behaviour stable. In this discussion, the forces that need modification are those keeping SA’s entrepreneurial behaviour stable. Change efforts range on a continuum from incremental changes (fine-tuning SA’s entrepreneurial position) to quantum changes (fundamentally altering how SA operates in terms of its entrepreneurial activity). We need an ’entrepreneurial transformation’, with radical changes in how South Africans perceive, think, and behave in terms of entrepreneurship. It must supersede ‘making things better’ or ‘fine-tuning the status quo’. Instead, it has to fundamentally alter SA’s assumptions about its entrepreneurial functioning and how it relates to the global environment.