Article written by Alan Shannon (Executive: Small Business Services and Private Clients – Nedbank)
Although the need for a more entrepreneurial culture in South Africa wasn’t created by the COVID-19 pandemic and resultant lockdowns, it certainly raised awareness of the importance of entrepreneurship and significantly increased the urgency with which our country needs to build that culture.
The ability to earn an income is one of the cornerstones on which every person’s physical and mental well-being depends. However, the options for earning such an income have decreased massively over the past decade, and the concept of getting a steady job and working in that position for life is something that few people can depend on anymore.
Formal employment, however, is only one way of making a living. While unemployment is at an all-time high, the positive side of declining job opportunities is that it forces us to think out of the box – and that is giving rise to a growing culture of entrepreneurship that has the real potential to transform our economy.
Globally, it is widely accepted that it’s not large corporations that are the primary drivers of sustainable economic growth – it is entrepreneurs and small and medium businesses. But more than that, entrepreneurship is also a vital catalyst for social upliftment and collective good. While large businesses have invaluable corporate social investment programmes, entrepreneurs are more often than not in the proverbial trenches, working in the communities where social needs are most prevalent, and often delivering solutions that enable them not only to be profitable, but also to contribute tangibly to improving the lives of people.
In addition, successful entrepreneurial ventures often contribute to local community well-being and prosperity because, unlike large organisations, entrepreneurs don’t divert their revenues to large, centralised headquarters. They tend to earn, spend and invest the rands they make close to home, mainly back into the communities that support them.
Entrepreneurs are by nature innovators, creators and enablers. As such, their role almost always goes beyond ‘doing business’. They don’t just create products: they also create jobs and opportunities, transfer skills, provide experience and, in some cases, help build entirely new markets.
Given this broad spectrum of socioeconomic benefits of entrepreneurship, it’s clear that South Africa needs to be doing more to encourage and enable such entrepreneurship. This demands a collective effort by individuals, communities, businesses, educational institutions and government.
One of the most effective ways of building a culture of entrepreneurship in society is by proactively teaching entrepreneurship. While the reality of formal employment has shifted in South Africa in recent years, the education system remains rooted in the concept of giving young people the theoretical knowledge they need to eventually ‘get a good job’. Conservative estimates are that by 2050 around two billion young adults will be trying to enter the workforce, and there will certainly be far fewer than two billion jobs available for them. Against this backdrop, education for self-employment is imperative. Our schools and universities need to be teaching our nation’s young people the entrepreneurial skills and attitudes they need to become successful and agile business owners and, equally importantly, lifelong learners to ensure they can adapt to succeed in an increasingly fast-changing world.
Of course, overhauling the education system will be effective in producing entrepreneurs only if it has the support of families themselves. The ‘get a job’ narrative needs to change fast and parents must accept that entrepreneurship is a viable life and career path. It’s not going to be possible to build an entrepreneurial culture if the entrepreneurial aspirations of young people are hamstrung by the lingering misperceptions of their families.
Here, too, role models have a vital part to play. Successful entrepreneurs must embrace the responsibility they have to demonstrate the power and potential of being an entrepreneur. Modelling their own success in the communities in which they live and work is one of the most valuable contributions entrepreneurs can make to unlocking the power of entrepreneurship in those communities.
Then, as a society, we need to be more committed to democratising entrepreneurship. It’s vital that South Africans see that any one of them can become an entrepreneur. It’s not some magical formula that’s limited to the select few. Anyone can succeed as an entrepreneur, regardless of their background, provided they receive the support and encouragement they need.
One of the key sources of such entrepreneurial support is big business. Corporates have the resources at their disposal to help entrepreneurs succeed. Most corporates are doing this already through their various enterprise development programmes. But those programmes need to be refined even further, and transformed from enterprise development to entrepreneur development, with the associated investments, support, mentorship and guidance specifically targeted at helping entrepreneurs succeed and thrive.
Most importantly, we need to change the South African narrative that there are no opportunities in this country for our young people. Yes, unemployment is a lingering challenge. But employment is most certainly not the only source of opportunity. As a society, we have to help our youth explore new ways of becoming self-sufficient. There are myriad opportunities here for entrepreneurs – and it is up to all of us to work together to unlock them.