Its not what you say, but how you say it…

Its not what you say, but how you say it…

rochemamabolo

Fear-of-Public-Speaking-image

Consider these two statements:

‘Hey, dont you see the rubbish bin is full!’

Or

‘It would be really great if you could empty the rubbish bin, honey’

C’est le ton qui fait la musique: its not what you say, but how you say it. If a message is communicated in different ways, it will also be received in different ways. In psychologists’ jargon, this technique is called framing.

We react differently to identical situations, depending on how they are presented. In the 1980s Kahneman conducted as survey in which he put forward two options for an epidemic-control strategy. The lives of 600 people were at stake, they told participants to the survey:

– Option A: Saves 200 lives
– Option B: Offers 33% chance that all 600 people will survive and a 66% chance that no one will survive.

Although options A and B were the same (with…

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“You can buy this from anyone, and we are anyone”

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That is not going to get you very far when you sell stuff, raise money, look for a job and your skills or services can be found from anyone.

If your skills can be found anywhere, anytime and anyhow from anyone, you are fitting in and ultimately invisible.

What if instead, you created a reputation as the person or business that can honestly say, “you can’t get this from anyone but me?”

Which comes first: The product or the marketing?

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Well, if you define marketing as advertising, then it’s clear you need the product first.

But wait.

Marketing is not the same as advertising.

Advertising is a tiny slice of what marketing is today, and in fact, it’s pretty clear that the marketing has to come before the product, not after.

A lot of products were produced after a lot of marketing (including market research) has been done.

Don’t look for customers for your products, look for products for your customers.

This means you need to know what you customers want first, then based on what they want, go out there an source (produce, innovate) products for them. This will result in a filling a gap in the market where there is proven demand. This is what entrepreneurship is about, filling a gap in the market.

In fact, just about every successful product or service is the result of smart marketing thinking first, followed by a great product that makes the marketing story come true.

If someone comes to you with a ‘great’ product that just needs some marketing, the game is probably already over.

This Might Not Work…

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Change is powerful, but change always comes with the possibility of failure as its partner. ‘This might not work’ is not merely something to be tolerated; it’s something you must seek out.

If your new business plan disrupts an industry or pisses a lot of people off, there’s a good chance you are on to something good. You should worry more when nobody’s talking.

The State of Entrepreneurship in South Africa: Solutions and Recommendations

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The following are some of the recommendations now how to remedy and create a culture of thriving entrepreneurship in South Africa. This list is not exhaustive, there are other recommendation:

Education:

  • Entrepreneurial education – when offered – is unlikely to reduce/remove the deficit created by having a poor basic education.
  • Entrepreneurship training and support should not be training for the sake of training. Impact of the training should be assessed. The impact should be monitored and measured. Without that we won’t make any progress supporting entrepreneurs and businesses.
  • Relatively low number of individuals entering (and even lower completing) tertiary education. This needs to be addressed.

Market dynamics:

  • Tight vertical integration of existing businesses makes it difficult for new firms to start.
  • Big businesses essentially make it extremely difficult for small businesses to engage with them. The vendor registration processes is time-consuming and are complex and small businesses are expected to provide so much documentation. They are being treated like big businesses and there is no recognition of the cost of this compliance (both in time and real cost) to a small business. The compliance process could take up to 8 months just to complete. Corporates work with checklists and are driven by risk compliance people that have little or no understanding of the difficulties faced by small businesses.
  • Up the value chain: big players dominate which leaves little room for new entrants. The competition is doing its best to curb monopolistic behavior, however more could be done to result in reasonable bank charges, telecommunications costs etc. This is a process and over time the desired results should be visible.
  • Energy, transport, financial and communication markets too regulated – increased costs to small businesses and also reduces the flexibility for small businesses to find niche markets.

Culture and social norms:

  • Banks are not open to funding people who have previously failed in business attempts.
  • Entrepreneurship is a mindset. South Africa, in general, does not have an entrepreneurial mindset. Vast majority of South Africans have the mindset of an employee.
  • Need to start young, at primary school. Schooling needs to encourage imagination and creativity. Expose young children to entrepreneurship based on activity.
  • Entrepreneurship at school level should not have an academic focus. EMS as a school subject is not the same as entrepreneurship education.
  • Government has hyped entrepreneurship to such a level that people with no more than a basic idea believe themselves to be entrepreneurs. However a number of ideas have not got the economic right to live.
  • It is an odd phenomenon but despite (on paper) South Africa’s regulations being more onerous than in the USA, for example, they are much less rigorously enforced. In SA if your kitchen is not spotless you will have some time to rectify it. In the USA they will close you down very rapidly. So there is a freewheeling culture that is conducive to economic experimentation. This gives businesses the time to become compliant but in the USA you need to comply before opening your doors as the inspectors will be there in 48 hours to shut you down.

Government policy:

  • Legislation around the hiring and firing of staff scares many small businesses off from hiring staff. Once companies hire staff, it is very difficult to let them go if the business cannot afford them. Labour legislation needs to accommodate the up- and downswings in small businesses and the need to be able to hire and fire due to business reasons.
  • With labour the key issues are the minimum wage and lack of productivity. Policies either need to be put in place to stop dumping or employers need to be allowed to reduce the minimum wage. For example: with massive imports on textiles, small businesses cannot compete. The choice is either to shield and protect industries, or reduce wages to be competitive. If neither of these happens, businesses will be forced to close.
  • Productivity is probably the key labour issue and this goes back issues with poor quality education. Employers, potential employers and employees are all being let down by the state of education in South Africa. Under-skilled labour and low productivity limits the competitiveness of business.
  • BEE is often more about redistribution i.e. share issues. Focus should be on skills development i.e. supply chains with links into the townships and rural areas. More beneficiation should be done in mining towns where small businesses are linked to big mining companies in the location.
  • Government policies still have a ‘large-firm bias.’ The introduction of the Ministry of Small Business Development is a step in the right direction. Sufficient budget should be allocated to this Ministry so that it can be able to implement more projects that will have a positive impact on the economy.
  • CIPC needs to improve on its business registration systems. This is step one of business and how entrepreneur experience CIPC will either encourage or discourage them in the entrepreneurship journey.
  • Procurement policies needs to be transparent and need to focus on small business participation in the supply chain.
  • Improvement in cross-border trade focusing on reducing documentation, costs and time.
  • Priority fees offered to large organisations seen as impacting on small businesses’ ability to access physical infrastructure at a competitive price.
  • Questions related to cost of telecommunication (particularly in comparison to other African and international competitors).

Business support:

  • Business support needed in smaller cities and towns to spread the assistance.
  • Significant amount of support available in major cities such as Johannesburg, Durban and Cape Town; however, the support is often uncoordinated and does not specifically target one of the three business types (namely necessity, opportunity, innovation).

Financial support:

  • Banks do not lend at competitive rates – interest costs therefore extremely high.
  • Not enough access to small loans with technical support. Due diligence sometimes hinders entrepreneurs from obtaining first round funding.
  • There is a considerable amount of funding available. However accessing the funding is difficult and time-consuming as every funder has a different system, many requiring numerous (and differing) forms and requirements. There are so many unnecessary hurdles to accessing funding.

The State of Entrepreneurship in South Africa: Gauteng vis-à-vis Western Cape Entrepeneurs

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The graph below analyses the entrepreneurial pipeline with respect to Gauteng, the rest of South Africa and the Western Cape.

Table 2

  • The pipeline begins with potential entrepreneurs: In this stage individuals have not embarked on any specific actions to start an enterprise, even though they believe they have the capacity and believe that there are plenty of opportunities to start a business.
  • The second stage in the pipeline is intentional entrepreneurs: those individuals who intend to exploit these opportunities and express an intention to start a business. The following stage is represented by nascent entrepreneurs and new entrepreneurs, and
  • Finally established businesses: Those who have started and are running their businesses.

Potential entrepreneurs are individuals who believe they have the capacity to run a business and that there are plenty of opportunities to start a business. This perception is important, as GEM has found that individuals who are confident that they possess the skills to start a business are four to six times more likely to be involved in entrepreneurial activity.

Gauteng (29.7%) has the highest provincial rate of potential entrepreneurs while just over a fifth (22%) of the population in the Western Cape and the rest of South Africa believe they have the skills and knowledge to start a business and that there are opportunities in the area they live.

The higher rate of potential entrepreneurs in Gauteng is unsurprising, as it is the commercial hub of South Africa.

Gauteng contributes over a third (33.7%) of South Africa’s GDP and has a gross regional product which is 2.4 times greater than the gross regional product of the Western Cape.

The increased amount of business activity is likely to increase the possibility of individuals believing that they perceive business opportunities.

42.2% of people living in Gauteng indicated that they perceive good business opportunities in the area in which they live, while only 34.5% of people living in the Western Cape indicated that they perceive good business opportunities in the area in which they live.

The rate of intentional entrepreneurs represents non-entrepreneurial individuals who have indicated an intention to exploit opportunities and an intention to start a business within the next three years.

A fifth (19.2%) of non-entrepreneurs in Gauteng expressed an intention to start a business in the next three years.

The rate of intentional entrepreneurs in Gauteng is 1.7 times the rate in the rest of South Africa and 2.7 times the rate in the Western Cape.

Even though an individual may indicate an intention to start a business, before this becomes an actuality there will be an assessment of opportunity costs, which involves comparing the expected returns of entrepreneurship to the expected returns of an alternative occupation.

The most common alternative is being employed. Remaining employed may be a more attractive option to many, especially where employment opportunities are sparse.

While the Western Cape has the lowest provincial unemployment rate, South Africa’s unemployment rate is extremely high and the opportunity cost of leaving formal employment to pursue an entrepreneurial opportunity is therefore high.

60% of the Western Cape businesses have medium and high growth perceptions compared to 38% in Gauteng and 26% for the rest of South Africa.

The TEA rate captures individuals that have actually acted on their intentions. The TEA rate includes both nascent and new entrepreneurs.

Nascent entrepreneurs are individuals who are actively involved in setting up a business or who already own a business but whose business has not paid any wages or salaries for 0 to 3 months.

New entrepreneurs are individuals who are owners/managers of an active business that has been in existence for 3 to 42 months.

Gauteng has a TEA rate of 15.4%, the rest of South Africa has a TEA rate of 9.5% and the Western Cape has a TEA rate of 7.0%.

One explanation for the lower TEA rate in the Western Cape is the population demographics within the Western Cape, in relation to the population demographic in Gauteng and the rest of South Africa (as regions).

Fifty percent of the Western Cape population is coloured and this race grouping has the lowest TEA rate.

Gauteng and the rest of South Africa (other than the Northern Cape) have a lower percentage of coloured people in their population demographics.

Entrepreneurs in Gauteng are 3.2 times more likely to be opportunity-driven than necessity-driven.

In KwaZulu-Natal, the Eastern Cape and Limpopo, the informal sector accounts for a larger share of total employment compared to most of the other provinces.

This would explain why entrepreneurs in the rest of South Africa are only 1.7 times more likely to be opportunity-driven than necessity-driven entrepreneurs.

Western Cape entrepreneurs are 6.7 times more likely to be opportunity-driven than necessity-driven compared to 3.2 times in Gauteng and 1.7 times in the rest of South Africa.

This is positive with respect to employment creation, as GEM has shown that opportunity-driven businesses have a more positive impact on job creation.

The Western Cape has the highest rate of intended high-growth businesses that are intending to generate 20+ jobs over the next five years.

Entrepreneurs in the Western Cape (71.9%) perceive themselves, on average, to be slightly more innovative with respect to the extent to which their product or service is new to some or all customers and where few or no other businesses offer the same product than Gauteng (69.9%) and the rest of South Africa (66.7%).

This is a positive sign, as a high degree of innovation orientation within businesses is expected to have a positive impact on economic development.

When asked to respond to the following question, “Where you live, working for the government is the best way to earn a good living”, over half of Gauteng (53%) and Western Cape (58%) respondents agreed and just less than three-quarters (70%) of the rest of South Africa agreed that working for the government is the best way to earn a living.

A further concern is high levels of government corruption which creates the belief that ‘who you know’ is more important than ‘what you do’.

Finding entrepreneurial opportunities and indicating an intention to develop the opportunity into a business will be hampered by the belief that your success is more dependent on ‘who you know’ than ‘what you do’.

Added to this perception is increasing dependence on state welfare, with 16 million people in South Africa receiving social grants, of which 11.3 million receive child support grants.

Of the 58 million people in South Africa, the public sector currently employs 22.8% percent of the working population, 27.5% (16 million) are receiving social grants and 36.7% (6.9 million people) are unemployed (expanded definition).

The development of an entrepreneurial culture in South Africa is likely to be eroded by the perception that working for the government is the best way to earn a living, by the number of discouraged work seekers and the number of people on social grants.

GEM has shown that knowing an entrepreneur has a positive impact on the decision to start a business. However, in many communities, knowing people who are discouraged work seekers or are a recipient of a social grant is significantly more likely than knowing an entrepreneur.

The State of Entrepreneurship in South Africa: Black vis-a-vis White Entrepreneurs

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Early GEM research (GEM South African Report, 2005 and 2010) indicated that there is a strong relationship between population groups and entrepreneurial activity.

Whites and Indians were more likely to start a business than were coloureds and black Africans. However, subsequent research (GEM South African Report, 2008) showed that this difference did not exist when all races had received post-secondary education.

This clearly illustrates the importance of both good secondary and, in particular, tertiary education.

Very encouraging is that the percentage of black Africans who are involved in opportunity-driven entrepreneurship has been increasing steadily, from 22.9% in 2005 to 58.3% in 2013.

The State of Entrepreneurship in South Africa: Women vis-a-vis Men Entrepreneurs

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The ratio of male to female participation in early-stage entrepreneurial activity varies considerably across countries (GEM Global Report, 2013), possibly because of different cultural aspects and customs regarding women’s role in the family and their participation in the labour market.

It should be recognised that women enter entrepreneurship for many of the same reasons as men, such as to support themselves and their family, to attain financial independence and to enrich their lives with meaningful careers.

GEM surveys over the years have shown that men are significantly more likely than women are to pursue entrepreneurship.

Encouragingly, the ratio of male to female opportunity entrepreneurship has increased from 1.26 in 2002 to 1.36 in 2013 (compared to the SSA ratio of 1.08 in 2013)

The ratio of opportunity entrepreneurship to necessity entrepreneurship has increased by 35% from 2002 (1.38) to 2013 (1.86). This is very good news as GEM has consistently shown that opportunity entrepreneurs create more jobs than necessity entrepreneurs and are more sustainable, thus making a more significant contribution to the economy.

However, more research needs to be done, especially in sub-Saharan Africa, as to whether men and women have different aspirations and face different challenges. There may well be differences in perceptions, attitudes and intentions.

With respect to cultural and social norms, it is interesting to explore how young people view gender differences with respect to starting a business. Young men are 1.3 times more likely than young women to be potential entrepreneurs and 1.7 times more likely than young women to indicate an intention to start a business.

Almost half (49%) of the youth agreed with the statement “Where I live, young men are more likely to start a business than young women.

The perception that young men are more likely to start a business than young women, if not countered, can act as a deterrent to young women. It is important that the media and educational institutions promote small business ownership as a valid choice for both young men and women. The media needs to promote both male and female businesses to increase the visibility of women in business.

13.1% of the male youth and 8.9% of the female youth are involved in nascent or new businesses. Young men are therefore 1.5 times more likely to be entrepreneurial than young women.

Forty percent of the youth believe that a young woman’s primary responsibility should be to start and maintain a family. The societal belief that starting a family is a young woman’s primary responsibility is an additional barrier to entry for young women.

Young women who postpone or opt not to start a family, would therefore be acting contrary to society’s norms. A third of the youth agreed with the statements: Where I live, it is believed that men should earn more than women” and Where I live, young women are disadvantaged in starting a business due to religious and or cultural beliefs.”

It is important for a country to have more women entrepreneurs. More women entrepreneurs means more empowerment for the nation. It is therefore imperative that media attention is focused on women entrepreneurs and more successful women entrepreneurs are celebrated in society so as to encourage more and more.

We certainly noted that when given the opportunity, women handle money more efficiently. They have long term vision, they manage money more carefully. Men are more callous with money. Their first reflex is to blow it by getting drunk in a pub, or on prostitutes or gambling.

Women, on the other hand, are endowed with a tremendous sense of self-sacrifice and try to get the best out of the money, for their children, but also for their husbands.

The State of Entrepreneurship in South Africa: Youth Entrepreneurship

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Youth unemployment and under-employment have become key concerns for both the developed and developing world.

The 2011 census puts the South African population at 51 770 560 million people. Of these, 19 466 346 million are currently between the age of 15 and 34 (37.6%) and a further 15 100 086 million are between the age of 0 and 14 years old (29%). This means that just under two-thirds (66.6%) of the South African population are under the age of 34 years3.

It is imperative that effective solutions regarding the youth unemployment crisis, as well as any other issues facing the youth as a grouping, are addressed, as these issues are not only going to affect young people who are currently in the 15 to 34 year old bracket. The issues will be compounded as the 15 million young people under the age of 15 years complete their schooling and wish to join the labour market in search of a sustainable livelihood.

South Africa has extremely high official rates of youth unemployment, ranging from almost two thirds (64.5%) of youth between the age of 15 and 19 years to over a quarter (27.5%) between the age of 30 and 34 years. The official rate of unemployment includes people who are without work and are looking for work and are available to take up employment or open a business. Of even greater concern is the expanded rate of unemployment, i.e. including individuals who have given up looking for work.

The expanded rate for 15 to 19 year olds is 20% greater than the official rate, and the expanded rate for 30 to 34 year olds is 30% higher than the official rate.

Studies have shown extremely negative long-term penalties affecting young people who are either retrenched or unable to find work early in their careers. This negative impact was also noted in Indonesia, Argentina and Brazil. The research suggests that the negative effect of early unemployment is more severe in stagnant economies has shown that people can start a business at any time in their life, although this activity tends to be more prevalent among those in the 25 to 34 age group.

The reason for this is possibly due to the fact that these individuals have had more time to develop their skills and knowledge through education, as well as through work experience. An important factor is that they may have accumulated other resources such as networks, personal savings and access to other financial resources. In addition, they may be a little less established in a career that may offer high salaries and perks (less opportunity costs) or they may have fewer financial obligations, such as families to support and loan

A quarter of young people in South Africa between the ages of 18 and 34 years old believe that they have the skills and knowledge to start a business and that there are good opportunities to exploit.

The rate of potential youth entrepreneurs in South Africa is substantially below the average for sub-Saharan Africa (60%).

Sixty percent of young people surveyed believe that lack of knowledge of how to start a business is a substantial barrier to entrepreneurship, while more than half of the youth think that becoming an entrepreneur in South Africa is difficult or very difficult.

Only 13% of the non-entrepreneurial youth, i.e. not currently involved in setting up or running a business, indicated an intention to start a business in the next three years.

61% of young people believe that most young adults that start their own business have to work too hard for little money. A similar percentage believe that most young adults who have started their own businesses did so because they could not find a job.

This negative perception of owning a business is likely to act as a deterrent to young people.

Young men are 1.3 times more likely than young women to be potential entrepreneurs and 1.7 times more likely than young women to indicate an intention to start a business.

Almost half (49%) of the youth agreed with the statement “Where I live, young men are more likely to start a business than young women.”

The perception that young men are more likely to start a business than young women, if not countered, can act as a deterrent to young women. It is important that the media and educational institutions promote small business ownership as a valid choice for both young men and women.

Some of the key challenges facing new as well as established youth-owned businesses includes high operating costs (including red tape and stringent labour regulations), corruption/bribes, limited access to technology and internet and high competition (50% of youth businesses are in the retail sector, which can offer low barriers to entry with respect to start-up capital and the level of business skills).

Some positives relating to youth entrepreneurs in South Africa are also highlighted:

While sub-Saharan Africa, as a region, may have a considerably higher youth TEA rate than South Africa, only 17% of these businesses offer employment for more than one employee and they therefore add relatively little to job creation.

By contrast, in South Africa 65% of the youth businesses offer employment to more than one employee and therefore add relatively more to job creation. Of particular interest is the significantly higher rate of youth businesses in South Africa offering jobs to six to 19 employees (7%) and the higher rate of youth businesses offering employment to 20 or more employees (2%).

South Africa’s youth also considers itself more innovative than most other efficiency-driven countries, with the exception of the youth in Chile (55%) who have the highest percentage of business owners that perceive their businesses as having a product or service that is new to some or all customers and where few or no other businesses offer the same product. South Africa is rated as the second most innovative African country, with Tunisia rated as the most innovative.

In contrast to the two-thirds of young people who believe that working for the government is the best way to earn a good living, 61% of young people believe that most young adults that start their own business have to work too hard for little money.

This negative perception of owning a business needs to be changed. The media should be more active in promoting successful young business owners.

The media coverage is important in local, provincial and national newspapers, as well as radio. It is important that young people have a realistic understanding of the amount of work required to start a business, as well as the potential rewards the business could offer.

However, with over 60% of the youth seeing the choice of starting a business primarily as one of necessity and perceiving businesses as a vehicle to do little more than merely survive, it is unsurprising that South Africa has such a low rate of young people with the intention of starting a business.

South Africa, it seems, is failing in its bid to promote entrepreneurship as a viable option for a sustainable livelihood.

This is clearly shown, not only in the youth’s perception of why young people start businesses and of the potential success of the businesses, but also in the attendance at events such as the 2013 Global Entrepreneurship Week (GEW).

The attendance figures of various GEW events in a country, as well as media interest, show stark contrasts between the 1.6 million people in Brazil, the 199 000 people in Barbados and the paltry 2 309 people attending events in South Africa.

What is of further concern is that the Small Enterprise Development Agency (SEDA), a key vehicle in the government’s entrepreneurial policy, was notable in its absence.

The only way we can create jobs is to create an environment for business. Small business matters. It should matter that young people set up their own businesses. We must create an inclusive economy and look at restraints for the economy.

The State of Entrepreneurship in South Africa: The State We Are In

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‘”Throughout the world, shifts in population demographics, technology changes, fluctuating economies and other dynamic forces have transformed societies as never before, bringing new challenges and opportunities to the forefront. Among the responses to these shifting forces is an increased emphasis on entrepreneurship by governments, organisations and the public.” – GEM Global Report, 2012

The most widely used measure of entrepreneurship is the TEA (Total Entrepreneurial Activity) or ‘early stage entrepreneurial activity’ Index. It measures entrepreneurial activity by looking at the percentage of the active population, people between 25 and 64, who are entrepreneurs in any given country.

On the positive side:

  •  South Africa’s GDP has tripled from $136 billion to $385 billion;
  •  The GDP per capita has grown from $4 300 in 1995 to $6 000 in 2012, a 40% increase;
  •  There has been a remarkable progression in the LSM (living standard measure) profile of the country. The number of people in the lower income group (LSM 1 to 4) has decreased significantly from 52% to 31%, resulting in 4.6 million fewer people in the low income group. The number of people in the LSM 5 to 10 category has increased from 48% to 69%, resulting in almost 10 million more people graduating to the middle to upper band;
  •  The middle class has doubled from 7% of the black African population in 1993 to 14% in 2008, an increase of 3.1 million more Africans in the period to 5.4 million; Tax receipts are significantly up – from R114 billion from 1.7 million people to R814 billion from 13.7 million people (although the tax base does still come mainly from the minority of the population);
  •  Government grants are now distributed to 16.1 million people – up by over 600% from 2.4 million in 2007.

In spite of these positives, the Goldman Sachs report highlights a number of serious challenges that still need to be addressed.

  • The exceptionally high levels of unemployment range from 26% to 36% (depending upon how it is measured), where 4.6 million people are looking for and cannot find jobs, to another 2.3 million who have given up looking for work, which means that approximately 7 million South Africans are unemployed representing 36% of the labour force. The triple challenge of HIV, unemployment and poverty still affects the lives of around one-third of the population;
  •  South Africa’s household debt to disposable income has built up to 76% from 57% in 1994. This overindebtedness may have accompanied the rise in the middle class;
  •  Real wages across South Africa’s economy have grown higher than the annual CPI inflation index.
  •  South Africa’s rating, according to the Global Competitive Index (GCI), has dropped from 35th position in 2007 to 54th in 2013; and
  • Public sector employment has grown significantly from 1.7 million in 1994 to over 2.0 million in 2012.

South Africa, like most developing countries, has very positive aspects, but also negative ones that may hamper the required economic growth necessary to reduce its high unemployment. However, unlike many of its sub-Saharan neighbours it seems to be lagging, especially in terms of small and medium business development (Herrington and Kelley, 2012).

The reasons for this disquieting trend will form part of this blog for this week.

Potential entrepreneurs

Potential entrepreneurs are those who see opportunities in their environment, have the capacity to start a business and are undeterred by failure.

Societal attitudes, such as the perception of good opportunities and whether individuals think they have the capabilities of starting a business, have a profound influence on the motivations of people to enter entrepreneurship.

Individuals among the adult population (18 to 64 years) in South Africa have a perception of only almost one-third that of people from other sub-Saharan African countries (SSA – Angola, Botswana, Ethiopia, Ghana, Malawi, Namibia, Nigeria, Uganda and Zambia) that there are good opportunities to start a business with the same result for perceived capabilities.

However, although low, there has been a significant increase of 92% in perceived opportunities from 2001 to 2013 and 40.5% for perceived capabilities.

This is a very positive trend and could, in part, be due to the improvement of conditions for the black population.

Nonetheless, the low perception of skills to start a business is worrying and it is reasonable to assume that the low levels in the quality of primary and secondary information plays a significant role in an individual’s sense of self-efficacy and self-confidence.

Intentional entrepreneurs

Intentional entrepreneurs are those who intend to start a business in the next three years.

This next stage in the entrepreneurial pipeline is important as a strong association exists between entrepreneurial intentions and actual entrepreneurial behaviour.

The factors that influence this behaviour are whether individuals see entrepreneurship as a good career choice, whether high status is given to entrepreneurs and whether the media attention to entrepreneurship is high.

Although South Africa rates significantly below that of other SSA countries in all three conditions the upward trends from 2001 to 2013 are extremely encouraging with a 54% increase in the perception that entrepreneurship is a good career choice, a 56% increase in perceived status and a 65% increase in perceived media attention.

Although the National Experts still believe the factors that also influence entrepreneurial intentions, such as cultural and social norms, education at a post-secondary level and access to finance, remain below, par the movement of improvement is in the right direction, which is very encouraging.

Early-stage entrepreneurial activity

These individuals and the level of early-stage entrepreneurs who are in the process of starting or who have just started a business represent the central indicator for GEM, which is known as the total entrepreneurial activity TEA.

They could be nascent entrepreneurs (have not paid salaries or wages for more than three months) or new entrepreneurs who have moved beyond the nascent stage and have paid salaries and wages for more than three months and less than 42 months.

South Africa’s rate for nascent entrepreneurs at 6.6% for 2013, for new business entrepreneurs at 4.1% and total early-stage entrepreneurs at 10.6% remain significantly below that of other SSA countries showing 15.2%, 17.1% and 16.0% respectively.

Although extremely low compared to most developing countries, the trend since 2003 is showing a gradual improvement year-on-year, which is encouraging and for the second time in 13 years shows a rate above the median for all GEM countries worldwide.

South Africa’s opportunity-driven rates for early-stage entrepreneurial development have increased marginally over the years from 2005 (57.1%) to 2013 (68.6%), whereas that for necessity-driven has decreased from 39.5% in 2005 to 30.3% in 2013.

This is surprising, given the high levels of unemployment in the country.

Table 1

Entrepreneurial Intentions: On average Sub-Saharan countries (SSA – Angola, Botswana, Ethiopia, Ghana, Malawi, Namibia, Nigeria, Uganda and Zambia) view rate 58.3 in terms entrepreneurial intentions. South Africa rate 15.4 which is very low compared to SSA

Entrepreneurship as a good career choice: 77.8% of SSA views entrepreneurship as a good career choice compared to 74% of RSA. This is a big improvement. South Africans’ view of entrepreneurship have improved significantly.

Gives entrepreneurs high status: 80.2% of SSA give high status to entrepreneurs compared to 74.7% of RSA. This is also a big improvement since 2003.

Media attention to entrepreneurs: 77.5% of SSA gives media attention to entrepreneurs compared to 78.4%. South African media gives more media attention and space to entrepreneurs. This is far above SSA.

The State of Entrepreneurship in South Africa is improving, even though we still rate below Sub-Saharan countries, South Africa’s trajectory is on the rise.

Mastery, Connection and then Grace

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The compliant era of the factory encouraged us to be focused on following instructions and fitting in. Some used this as an opportunity to achieve mastery, to get good at our craft, to understand the nature of what we did.

Now we have an opportunity to go beyond that. To connect with one another. To bring surprise and delight and love to the interactions that make up our day.

That will make you graceful. And the work you do when you are graceful is what we need, now more than ever.

So It’s Your Birthday Today

So It’s Your Birthday Today

rochemamabolo

Cake3
– If I was going to make you a cake for R20, using Joe Soap’s special recipe, I would go to the supermarket and get the ingredients and bake one slice of cake for you.

– I like you a little but I am in a hurry, so I’m going to buy cake mix and pay R30 for the mix that will give me a slice, plus I get to save time (of having not to measure and mix the ingredients)

– But if I am really in a hurry, I might as well just pay R40 of cake slice, no problem because it’s worth it to me. The experience not the cake.

– But you are my buddy and it’s your 45 birthday so I’m going to my faviourite bakery where I am liked and I’m going to pay R60 per slice and I am happy to pay it.

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