Where are the en­tre­pre­neur­ial lead­ers?

Finweek English Edition - - Insight -

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.

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