ENTERPRIS54 – Two thirds (67%) of SA’s youth surveyed think the government is the best way to earn a good living, according new research from the University of Cape Town (UCT) for the latest Global Entrepreneurship Monitor (GEM). About 61% of the youth surveyed thought that those who start their own business have to work
ENTERPRIS54 – Two thirds (67%) of SA’s youth surveyed think the government is the best way to earn a good living, according new research from the University of Cape Town (UCT) for the latest Global Entrepreneurship Monitor (GEM).
About 61% of the youth surveyed thought that those who start their own business have to work too hard for too little money and only start a business because they are not able to find a job.
The GEM shows that entrepreneurship in South Africa is on an upward trend, but young people are not entrepreneurially minded enough to sustain this.
The youth do not see entrepreneurship as a viable career choice, despite the potential it holds to generate jobs and wealth.
Dr Mike Herrington, executive director of the GEM international operations and co-author of the GEM South African report, said entrepreneurial activity contributes to economic growth and job creation, which is a key concern in SA.
“SA’s economy has grown at an average rate of 3.3% per year over the past two decades, but this has not been fast enough to alleviate the high rates of unemployment – particularly youth unemployment,” he said.
There are a few fundamentals that SA needs to get right if it is to continue its upward entrepreneurial trend, according to Jacqui Kew, co-author of the report.
“The first of these is changing the perceptions and attitudes, particularly of young South Africans, towards entrepreneurship,” said Kew.
Just 43% of South Africans believe they have what it takes to be an entrepreneur.
“We need to celebrate our entrepreneurial role models and create more realistic perceptions about what starting a small business can offer young people,” said Kew.
Another key challenge is education.
“The better the level of education, the more likely a person will be to start a business and, crucially, the more likely they are to start a business that exploits a gap in the market, survives its first three years and creates employment,” said Herrington, who also lectures entrepreneurship at the UCT Graduate School of Business.
The good health of a nation’s population is imperative, because an unhealthy population cannot start and run businesses successfully.
Likewise corruption and crime remain big potential saboteurs of any business.
New entrepreneurs are particularly vulnerable as they are less able to absorb the additional costs and uncertainty caused by high levels of crime and corruption.
“These elements are the pot-holes in SA’s road to economic success. And unless we take the time to fill them in, very little will change and even the best policies to support entrepreneurs will founder,” cautioned Herrington.
Editor’s Note: This post first appeared on Fin24