JOHANNESBURG – An appropriate level of business development support was more important than funding to accelerate entrepreneurship, an industry insider has argued.
Addressing an audience about the challenges facing entrepreneurs at the launch of Dalberg’s book, 17 Big Bets for a Better World, Pavlo Phitidis, CEO of Aurik Business Incubator, said funding followed good deals, while capable people built good businesses.
There was “no doubt” that this capability could be taught, he said.
Governments also had to show vision and serious intent to restructure economies, Phitidis added.
“The only vision that I’ve seen that is clearly articulated and put into action I’m afraid to say with my limited experience in Africa is in Rwanda, because what I’ve seen achieved there in the last three years is quite remarkable.”
“South Africa is a deeply, deeply privileged country with zero economic vision, and that zero economic vision translates to people not investing either their money to build businesses further, or their time to create an economy that is so desperately needed.”
Large organisations that were established during the early apartheid years continued to dominate economic activity, yet 68% of private sector job creation resided with businesses employing 50 or fewer people, he added.
Phitidis said a lot of government institutions – in South Africa and abroad – concentrated their efforts on very large businesses to create jobs. This was the case with the Department of Trade and Industry, while a lot of the Department of Small Business Development’s efforts focused primarily on youth unemployment in townships and rural areas.
Survivalist activities were something different than entrepreneurship, he said.
The Ashish J. Thakkar Global Entrepreneurship Index ranked South Africa’s entrepreneurial environment 46th out of 85 countries last year.
Ashish Thakkar, CEO and co-founder of Atlas Mara, said the research proposed practical solutions for governments around entrepreneurship. Rwanda, the UAE en Ghana reached out to the group after the publication of the report.
South Africa was very different to the rest of the continent, Thakkar said.
“The sophistication and the access and the pure depth of capital here is so much higher than the rest of the continent, yet there’s so many things lacking.”
In the rest of Africa, access to finance was still a real issue. Banks typically took deposits, but invested it in government treasuries rather than lending to businesses. Against this background, public-private-partnerships were critical, he argued.
Samuel Mensah, CEO and founder of Kisua Fashion, said the key difference between the hustler and the entrepreneur was the ability to grow.
While a degree and prior work experience were helpful to become more adaptable and increased the individual’s ability to learn, the biggest challenge for hustlers in becoming real entrepreneurs was that they were not able to grow and expand as opportunities presented themselves, he added.
Mensah said as an entrepreneur himself, his position was not to expect anything from politicians or governments.
“I expect nothing and if I get anything it is a bonus. That is my de facto position when it comes to any expectation from government or from policy.”
In trying to solve the problems faced by entrepreneurs, it was important to keep inclusive economic growth top of the agenda, Maryana Iskandar, CEO of Harambee, added.
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