IMPROVING ENTREPRENEURSHIP IN SA

Whilst I agree that the opportunities are vast and exciting, I strongly disagree regarding that capital is freely available. Nothing in life is free and certainly not the capital for starting a venture. Banks require enough paperwork from a single individual to strip a forest of every tree that it possessed, to say nothing of the complexity of the information that is required to complete said documentation. Months of running around trying to put everything together only to be told that your application cannot be processed because they are missing your grandmother's sister's cousin's daughter-in-law's birth certificate that is required to prove that you are indeed South African and not an illegal alien, also adds to the absolute frustration.

Then of course there is the little problem of interpretation and power. It seems that everyone and his dog have their own intrepretation of the FICA and FAIS Act and of course if you don't satisfy their hunger for yet another copy of your ID, they will halt the prossessing of your application! To make matters even worse, the people who are intrepteting these laws are usually semi literate (and we all know how dangerours a little bit of education is) and now suddenly they are experts in matters of the law.

Don't forget the Department of Labour in this equation and the numerous laws that have been passed to protect the Employee! For heaven's sake, don't get started on that that quagmire! This particular avenue encourages people who have somebody who once worked in an HR department somewhere, who is now an absolute specialist on the subject and causes unmentionable irritation and aggrevation to the small business owner, whose only mistake in all of this was to try and grow the economy and actually went out there and hired someone to do a job, only to discover that the"someone" they hired is not who they made themselves out to be, but now cannot get rid of said useless person because of threats of going to the CCMA, the time that it takes to get rid of absolutely useless people and the costs involved in hiring a Labour Attorney (who actually understands the law) to sort out the whole mess that the Labour Consultant (who is not a lawyer, but once worked in the HR department and is therefore an expert by default) made in the first place.

And they want to know why businesses do not get off the ground and/or who have to close down due to the red tape and the expense red tape requires!

On the one hand it is almost impossible to get financial assistance and on the other hand we are controlled and regulated into the ground!

Improving entrepreneurship in SA

With the 2007 Global Entrepreneurship Monitor (GEM) Report again indicating that South Africa performs poorly in comparison to other emerging economies in terms of entrepreneurial activity and development, attention is being focused on interventions which support and encourage business initiatives and development.

“The environment in this country bodes well for entrepreneurs, offering considerable opportunity, availability of finance and indications of both political and business will to encourage development,” says Melt van der Spuy, director, Business Support, Business and Private Banking at Standard Bank. Sponsored by Standard Bank, Liberty Life, South African Breweries Limited and the National Research Foundation, the GEM Report provides empirical data on the level of entrepreneurship which is intended to stimulate debate and inform policy in 40 developing nations.

In the six years in which South Africa has participated in this research initiative, it has consistently emerged that it has a low level of early stage entrepreneurial activity, nearly half that of the average of the 34 emerging economy countries which participate. While van der Spuy states that the low level of early stage entrepreneurial activity is cause for concern, he believes the stage is set for development and advancement. “Ireland serves as a remarkable example of what can be achieved with a holistic, coordinated and concerted effort at development. It was one of the poorest in the European Union some years ago, but today is one of the richest. This was achieved by taking note of the problems it faced, marshalling support from big business, guided by government and focusing strongly on education and skills development.

There is no question that this is an enormous task, but the Irish have shown that it can be done,” he says. It is his assertion that South Africa is similarly positioned. “Legislation is driving increased participation in the economy of emerging businesses, while many big companies, Standard Bank included, have the will and desire to share procurement with emerging businesses,” he says. Specifying that education and skills development is of critical importance, van der Spuy says individuals are only able to see potential when they have a skill which they can apply to their benefit. Van der Spuy states that with an effective revenue authority, continued tax relief and the extension of amnesties for emerging businesses is also having a positive, stimulatory effect on entrepreneurship. There is also no shortage of initiatives from government and big business to stimulate growth, he says.

Capital is quite freely available, through government-driven initiatives such as the Industrial Development Corporation, from financial institutions and also private investors. However, respondents to the Report indicated that although there seems to be sufficient funds available it remains difficult to access these funds, especially for start-ups. Van der Spuy believes this is the result of entrepreneurs not fully understanding the expectations and requirements of financial institutions when applications for finance are made.

“There is no shortage of capital however, what has emerged in applications for finance is a poor grasp of essentials that are necessary for a financier to extend a loan. This is where education can play a key role; aspirant entrepreneurs need to know certain essentials, such as how to write a business plan and how to present a budget before they succeed in obtaining backing.” He points to initiatives which Standard Bank operates on an ongoing basis as an example of how involved South African big business is in economic development. “Like many other institutions, we are working to provide not just products and services, but also information and opportunities for learning.

This is manifest in our participation in research initiatives, hosting of seminars and workshops for emerging business owners, participation in government initiatives such as the Gauteng Enterprise Propeller, in partnership with French development agency AFD, Khula and many more. The notion of holistic and coordinated effort, I believe, remains a critical factor to continue stimulation of the South African economy.”