Why Entrepreneurship is the Key to Unlocking South Africa’s Economic Potential


Jared Kruger

05 Aug 2019

Reading time: 9 min Thought leadership articles
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South Africa needs superheroes.

But, not the kind that wear capes and fly around fighting crime. Nope. These superheros are cloaked in ambition, occasionally wear business attire, and are most likely drinking way too much coffee. In short, we need go-getter, tough-and-ready entrepreneurs who are willing to run with their newest business idea.

Entrepreneurs Carry Both the Power and the Burden

In South Africa, small businesses are critical to our national economy. With a staggering unemployment rate of 27.6% and around 127 000 jobs lost in the third quarter of last year, there has never been a stronger need for entrepreneurs to step up and fight for the nation. The South African Government has even called on small businesses to help them in achieving their 2010 National Development Plan (NDP) objective of creating 11 million new jobs by the year 2030.

Much like Gotham needs its Batman, South Africa desperately needs the entrepreneur. But, the state of entrepreneurship in South Africa is looking grim and, in many ways, we are failing those we need the most. In keeping with our superhero analogy, we have disarmed the ones who are set to save us by stripping them of their power and their trusty sidekick, Robin….

How We Are Failing Our Entrepreneur Superheroes

There are, undoubtedly, many ways in which entrepreneurship can help combat unemployment and improve the economy of South Africa. When equipped with the right skills and business idea, entrepreneurs can:

1 Provide opportunities for sustainable job creation

2 Make generous contributions to national income

3 Help with the promotion of social change

4 Assist in driving community development

However, to say our local small businesses are struggling would be a vast understatement. A 2018 study by In On Africa (IOA), which interviewed over 1 000 South African small business owners, suggests that the small business survival rate is concerningly low. This is evidenced by the rate of growth in the country – or lack thereof. Put simply, the outcomes of entrepreneurship do not quite keep up with the seemingly impressive inputs.

This is not a new phenomenon that we are facing. According to a 2015 Global Enterprise Monitor (GEM) report, South Africa had done well in its overall global ranking for entrepreneurship. On paper, and by all accounts, it looked like we were thriving. But, when analysing the country’s performance overall, it became evident that South Africa is lacking in the necessary entrepreneurial spirit and skills.

Compared to other African countries, our promotion of entrepreneurship should be envied, and our entrepreneurial efforts have far exceeded our peers. But, in reality, most South African entrepreneurs are doomed to fail, with many not surviving beyond 5 years. In fact, the survival rate beyond 3.5 years – what the Global Entrepreneurship Monitor (GEM) identifies as the length of time required to become established – is similarly poor.

How do we begin to answer why small businesses are failing in our country?

Remember the In On Africa research referenced earlier? In the study, the entrepreneurs were posed an open-ended question about areas of critical support. It was discovered that, after access to funding, over a quarter of the entrepreneurs revealed that there is a devastating need to fill entrepreneurial skills development gaps.

Entrepreneurship Courses That Aren’t Making A Difference

One of the reasons for small business failure is the lack of alignment between ideas and skills. While South African entrepreneurs may have outstanding insights that allow them to identify niche markets and recognise opportunities, many do not have the necessary business skills that take them from Point A to Point Z.

It may appear that the existence of such a gap is strange, since there is a significant array of online resources that have been created to provide entrepreneurial support. However, this information is often fragmented – there may be information out there, but none of it addresses the entire spectrum of entrepreneurial support, from start to finish.

In addition, some entrepreneurs may not be aware of where they are in their business growth. Which source would they need to consult, if they aren’t even aware of their entrepreneurial trajectory? This is not something that can be answered by a quick Google search.

Enter, business accelerators and incubators.

These companies are designed to help entrepreneurs take their new businesses out of the ideation stage and into the market. They have become very popular over the years, but unfortunately, not all are created equally. In fact, South African entrepreneurs are often let down, because entrepreneurship education goes unvetted.

Within their entrepreneurship courses and framework, some accelerators and incubators make lavish promises of “turning your business into the next Facebook”, but to no avail. While some of these programs focus on seed funding, education and skills development tend to fall by the wayside, resulting in an unsustainable business model and lack of knowledge for long-term success. There needs to be a balance in these programmes, between educational experts and standards, and practical business mentorship, if they are to grow a businesses with legs enough to break the 5-year hump.

A New Approach To Education and Social Entrepreneurship

Recognising the gap between entrepreneurs that succeed, and those that do not, Startup School has developed entrepreneurship courses to help bridge the gap. However, a good business idea is not the only thing that gets a business accepted into the programmes.

Startup School recognises the need to foster the emergence and growth of businesses that have a positive impact on South Africans. When combining commercial and social issues in a way that improves the lives of its people, entrepreneurs are able to better the country for those who live in it. Just like the story of Startup School alumna, Palesa Moloi. It’s through these social entrepreneurs that we will really begin to build a bigger and better national economy.

In short, our entrepreneurship courses offer:

– access to a practically and educationally-sound portfolio of learning content

– support from our experienced business coaches

– mentorship from South Africa’s most successful business leaders

– competition for prize funding to the value of R100,000 upon successful completion

– opportunities to grow and connect with like-minded and innovative entrepreneurs

– learning at your own pace.

Plus, because Startup School has partnered with Investec, applicants can apply for an Investec bursary that covers all course costs, apart from a R950 admin fee.

Want to learn more about our upcoming entrepreneurship courses? You can find them here.


3 Comments

Alternatives to retrenchment for South African small businesses

[…] is now a national crisis. There isn’t a seat for everyone at the big corporate table, meaning the burden lies with SMEs to step up and help kick unemployment to the curb. Small companies have the power to help combat […]

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How The ReTrade Project gives the community a hand-up rather than a hand-out – Startup School

[…] chance to chat to Maria or Jessica, you’ll know that their faces light up when they talk about entrepreneurship in Africa. These women believe that there’s potential and opportunity all around us, and we can’t help […]

Reply to How The ReTrade Project gives the community a hand-up rather than a hand-out - Startup School

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