SOUTH AFRICA is failing when it comes to cultivating a culture of enterpreneurship in the country. This was revealed in the recently released Global Entrepreneurship Monitor (Gem) for 2005.

South Africa is rated 25 out of 35 countries surveyed, down from 20 out of 34 nations polled in the 2004 report.The country's entrepreneurship activity rate is also the lowest of all developing countries surveyed.

Eric Wood, of the Graduate School of Business (*pictured above is the report's lead researcher Marlese von Broembsen, with a copy of the report itself), attributes this to efforts in the field of entrepreneurship, made by countries ranked ahead of South Africa. He highlighted the fact countries such as Brazil, India and Uganda are doing more in promoting entrepreneurship.

“The emphasis should not be on raising our rate but rather on the quality of entrepreneurial activity,” suggests Wood.

Gem recommends tough policy decisions be taken by government if it is serious about job creation. Focus must be placed on entrepreneurs identified as job creators.

The report points out that less than three percent of micro enterprises are likely to create enough sustainable jobs.

The report, which interviewed  2 761 adults in South Africa, also made the following findings

Competition among businesses is increasing. Whereas, 11,3% of owner-managers operated in markets without competition in 2003,  this decreased to 1,8% of owner-managers in 2005.

• Fewer firms use the latest technology for products or services. In 2003, 28% of South African owner-managers indicated that they used the latest technologies.

• In 2005, not one South African business reported that their firms used the latest  technology.

• Indians and whites are more likely to start a business than blacks or coloureds. Their businesses are also more likely to survive the incubation period and employ more people. About 3,7% of white owner-managed businesses create over 20 jobs. Seven percent of Indian owner-managers are responsible for the same number of jobs. On this basis, Indian entrepreneurs create more jobs than other racial groups in South Africa.

Click here for the full Gem report


Related article

One in three get bank loans
Financial practices can save you, shows study