By Moipone Malefane
This month, over 200 nations, including ours, celebrated Global Entrepreneurship Week. Everyone united behind one global mission: to encourage more people to consider entrepreneurship as an alternative to employment, start their own businesses, and drive economic innovation. Small business and entrepreneurship are the only way we can create the number of jobs we need to change the lives of over 60 million people in South Africa. That at least is the mantra you will keep hearing from everyone, especially those in government and big business.
Ironically, these are the two critical constituencies that have the biggest responsibility to make this a reality. The government has a responsibility to create the policy and investment climate necessary to support the growth of the small business, while big business should be the source of both that investment and the innovation climate that make it possible for entrepreneurs to thrive. SMMEs, cooperatives, and other entrepreneur-driven enterprises have been the backbone of economic growth and job creation for decades now in other parts of the world, even as our own economy developed towards greater concentration and cartel formation.
This move towards more concentration in the South African economy is not new and was even an inevitable outcome of decades of isolation and economic sanctions during apartheid. But it has not been discouraged or broken up by government policy and regulation since 1994. Every year the University of Pennsylvania in the United States publishes a ranking of the best countries in the world in which to be an entrepreneur. The recently released 2022 report has very interesting pointers for us. The top 10 countries share several things in common that are critical to how high they are ranked, which include:
- The country’s connection to the rest of the world
- The population’s education level
- The country’s levels of innovation and entrepreneurship
- Easy access to capital
- Skilled workforce
- Technological expertise
- Transparent business practices
- Good infrastructure
- Well-developed legal framework
There is nothing in this list that speaks to government summits and awards ceremonies, which often is the sort of thing that we tend to get in our country more than access to capital, transparent business practices, good and well-maintained infrastructure, just to mention a few key features that the top 10 countries share. In addition, one of the other remarkable things about the 2022 Pennsylvania list is how the top four positions are all but occupied by the top economies in the world. The top four countries for entrepreneurship are Japan, Germany, the United States, and the United Kingdom.
The established big economies still dominate, despite what we may sometimes hear about how the centre of gravity has moved to smaller, developing economies. There is a lot to learn still from the established systems (legal, business, policy, governance, regulatory, etc) in many of the big Western economies. Lastly, South Africa marked Global Entrepreneurship Week with our first inaugural National Presidential SMMEs and Co-operatives Summit.
The summit also included an awards ceremony to encourage innovation and entrepreneurship. Some small enterprises walked away with prizes worth over R2 million. While it is important to acknowledge small businesses that punch above their weight, we would suggest it is far more important to make capital, incubation programmes, and other non-financial support mechanisms available to them, not cash prizes. We have argued previously on this platform that this country needs to do better in this area. At the risk of self-repetition, we must reiterate the last thought from an earlier article:
“As a country, we need to do better. It is no exaggeration to say that without a coherent, well-funded, and well-implemented national SMME and start-up strategy, we cannot achieve the growth and employment rates we need to move up the global economic and development ladder.”