Entrepreneurship Falls To New Low In SA
Almost three years after the FIFA Soccer World Cup, entrepreneurial activity in South Africa has dropped to an alarming new low
Entrepreneurship in South Africa has fallen dramatically with economic experts worrying about the impact on the economy and job prospects for young South Africans.
According to research released by the Global Entrepreneurship Monitor at the University of Cape Town’s Graduate School of Business, Total Early-Stage Entrepreneurial activity (TEA) in South Africa dropped to 7.3% from a high of 9.1%, an almost 20% drop from the previous year and the lowest in four years.
“This shows us that any impact of the Soccer World Cup is gone,” says Mike Herrington, executive director of the GEM, explaining that after an initial boost following gains in small business creation, most of the momentum appeared to have been lost, almost three years following the 2010 FIFA World Cup.
He attributes this loss of entrepreneurial spirit to a complicated cocktail of problems, including SA’s poor education system, difficult and onerous labour laws, crime, government corruption and nepotism and generally unfavourable conditions for entrepreneurs in South Africa.
What is especially worrying is that South Africans scored lowest among 10 sub-Saharan African countries in terms of perceived opportunities and capabilities as well as entrepreneurial intentions – far below countries with smaller economies like Zambia and Angola.
Herrington sees the solution to SA’s lagging #entrepreneurial spirit in terms of short-term and longer-term solutions but keeps coming back to the problem of poor education, especially regarding maths and science.
The Department of Education’s Annual National Assessments Report 2012 on education results from Grades 1 – 6 and Grade 9 showed that the higher the grade under consideration, the lower the mark was for maths. Further cause for concern was that the country’s average mark for Grade 9 maths was 13%.
“That we are the second worst in the world where the quality of maths and science education is concerned bodes badly for entrepreneurship prospects, since one of the
cornerstones for success in #business is a mind that can problem-solve and think quickly in the face of challenging and changing scenarios,” says Herrington.
“In order to increase the size of South Africa’s pool of potential entrepreneurs, it will be important to focus on increasing the levels of perceived opportunities, through market dynamics and research and development, as well as on increasing levels of perceived capabilities, through education.”
The article posted by Shonisani Phaswana
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