|Entrepreneurial ship is truly unique in South Africa|
As with all other aspects, the drive to Entrepreneurial ship is truly unique in South Africa. There are vast number of reasons for a person to become an entrepreneur rather than seeking or remaining in formal employment. Of these drives, only 5 will be highlighted in this study opinion, they are;
From these five discussion points it will be evident that South Africa is truly in the forefront of an explosion in the marketplace, if Government heeds warning signs and published reports, to fully capitalise on the potential for entrepreneurship.
There are many changes in South Africa, and more specifically the New South Africa, which leads to changes in the mindset of the individual. Traditional fishermen have experienced the benefits from changing their way of life from fishing to the Eco tourist market. Whale watching in Hermanus and diving with the great white sharks in Durban is a new tourist attraction, and have been a growing business for the past 3 years. The revival of ethnic craft in Europe and America has also driven the demand for employees in farmlands and sugar fields to return to their native bead craft, where they earn far better than as a rural farm worker. Although the economy is growing as budgeted, the unemployment has remained near constant, and for this reason Government has introduced new strategies to counter unemployment. By introducing an education system that teaches and coaches students away form traditional thinking, they are able to shape the youth of South Africa to be the new “just do it” generation, who will be better informed about the technology of both today and tomorrow. With the advances in technology, many of the smaller companies are able to compete in larger markets, bringing down the prices of services and product, increasing the availability in doing so. Brining the technology to the masses, through affordability small entrepreneurs are born through large corporates wanting to expand their business without the extra labour expenses.
African Crafts & Tourism
The arts and culture renaissance is in full swing and numerous black entrepreneurs are being granted financial aid as well as education on the running of their micro-business to supply potential market expands to Europe and America, as well as the tourist visiting South Africa. The demand for African craft and the African experience is most likely the greatest driving force for entrepreneurialship in South Africa today.
An initiative called The Gauteng Enterprise Propeller (GEP) was established in April 2005 with the main aim to provide both financial and non financial aid to SMMEs in Gauteng (Shilowa, 2006:3). Further Shilowa mentioned that tourism attractions in the Gauteng area had increased from 68 attractions in 2001 to just over 275 attractions in 2005. Visiting tourists tally more that 70 000 per week, and circulation increased in excess of R7.5 million per week.
It is not only individuals who capitalize on the tourism boom, corporates such as auditing firm Deloitte and Touche has also invested in tourist attractions in the area. The procurement of game for a new game reserve will start in May 2006 and the project will be officially opened in December 2006 (Deloitte and Touche, 2006). MonkeyBiz is a non-profit company that employs roughly 300 women to make glass-beaded products. The women are paid anything from R30 to R2500 for their products. Barbara Jackson, the entrepreneur who started MonkeyBiz uses her contacts overseas to penetrate foreign markets.
With globalization as well as the ease and cost of technology, it would even be possible for the entrepreneur to collate all the arts and crafts into one website, thereby being only being the only small link in the supply chain to Europe where well-known stores like Sotheby’s and Conran in London and in ABC in the United States are regular importers of South African arts and Crafts (BizAfrica, 2006).
The opportunities that opens for the young entrepreneur is;
Is this sustainable for the next 5 years? It is more than likely, but as with fashion this may also be a seasonal demand. The key would be to monitor the sales very closely, in order to determine the decline of the market.
Fishermen have discarded their fishing practices in order to capitalize on growing marine tourism, along the coastline. Whale watching has become one of the main attractions in the fishing village of Hermanus.
A prime example of enrepreneurialship would be to source a vendor in major airports in Europe and Americas, where the arts and crafts could be sold, thereby eliminating all transport costs within Europe or within America. Your couriered destination already has an outlet. Many tourist visit South Africa, but do not have the baggage capacity to return with extravagant arts, after visiting Africa, they can buy the genuine artefact at the Airport.
Early Retrenchments and Retirement
The main focus of the traditional white South African up until the 1990’s is to enter a field of study, and once completed to accept a position in the corporate environment, or to follow family tradition by continuing the family business. In the New South Africa, uncertainty about any position in the corporate environment is a give.
Being employed in a pest control orientated franchised business, it is not uncommon to receive an application from a retrenched employee, interested in purchasing a franchise, whose annual remuneration far exceeds the cost of the franchise.
Currently the franchisees within the business consists of 3 retrenched miners, 5 ex-Eskom employees, 41 ex-SANDF members (including 3 full colonels and 1 Lieutenant Colonel), various retail managers and senior managers, and IT-company director. It would seem that nobody is safe from retrenchment, if an SANDF Colonel is retrenched at age 43 (Lawn Chemicare. 2006:45).
There is however the other side of the spectrum as well. Farm workers in Limpopo province are also being retrenched due to high labour costs. Government along with USAID co-funded Agribusiness, the Sustainable Natural African Plant Products (ASNAPP) project with the objective to help create and develop African agribusinesses in the natural products sector, providing income, employment and development through environmentally and socially conscious sustainable production of high quality, healthful natural products for local, regional and oversees markets. One of the initiatives of ASNAPP to support women entrepreneurs, previously employed, to formulate and develop shea butter into finished cosmetic products including moisturizers, lotions, creams, oils and pomades (ASNAPP. 2006).
In the past, one would except a position in the corporate environment, and retain this position till retirement. This is no longer the case today, as South Africa is moving to the other extreme, where SMME and Entrepreneurship is the order of the day and being able to find and retain a position in one corporate is the exception to the rule.
Coming from corporate environments with a closed and conservative mindset, these retrenched employees seek a tested and proven venture.
Availability of Information and Training
In the 20th century information was at the dawning of a new age. The flow of information was restricted to those who attended an institution of formal training, or libraries, and the media. Today in the 21st Century, information is available far more readily than in the past 50 years.
Your Business and Succeed magazines are focused at the general public, promoting the pros of entrepreneurialship, as well as offering over 413 opportunities in well established and recognised franchises. Such mediums are created purely to convert the traditional investor to an entrepreneur, and for the conservative whom need some security in tried and tested ventures. Furthermore the readership of Your Business magazine has moved from 14,000 readership in 2003 (YB. 2004) to 45,000 readership in 2005 (YB. 2006).
There are also formalized institutions such as the Gordon Institute of Business Science whose purpose it is to improve significantly the competitive performance of individuals and organisations through business education. GIBS established the Colloquium for Social Entrepreneurship (CSE) in March 2005 to build knowledge and networks for social entrepreneurs (GIBS, 2006).
Unisa offer courses in Chinese (Mandarin) for the business man, enabling him to successfully communicate with prospective customers in China (Unisa, 2006). With China as the biggest growing economy, this is both entrepreneurial to enter the Chinese market, as well as Unisa offering the course.
BRAIN and FRAIN offer courses such as Step-by-Step Franchising of which each candidate is sponsored 75% of the course fees by the Department of Trade and Industry (FRAIN, 2006).
The continuum of availability of information and training is not in question, if anything we should worry that the availability will stop. Opportunities will be utilised better by an informed and educated individual, that need not have any business acumen or background, as information and training is in such oversupply, that Government has allocated
The South African citizen is becoming a technologically aware consumer, and the advances in technology have become a global driving force in the start-up of new ventures. In South Africa we have a new developing middle class black consumer as well as rural citizens, who are more aware of the technology available than in the past five years.
Many larger companies are using young entrepreneurial spirit to bring the technological advances to the remote South African citizen. The traditional black citizen in the rural areas, are in need of he advances such as cell phones and other communication advances. This is where the Cellular Network operators have invested in the communities. By granting an franchise owned outlet many entrepreneurs are able to maintain both the network in the area through a container based point-of-presence (POP), as well as the retail of airtime in the area (Cell-C, 2006).
Another advancement driving the need for entrepreneurs is voice recognition, wireless networking and Voice over IP (VOIP). The approval of WI-Fi by ICASA, has automatically granted a 3rd option to the South African consumer requiring a communications method. Telkom is overburdened by the demand for communications solutions, and cannot attend to basic maintenance of the existing services. Small traditional internet hosting companies, such as Risccom cc, is entering the communications field by allowing customers to make reverse international calls (the call originates at the destination), thereby nullifying Telkom’s international call rates and utilizing call rates from abroad (Risccom, 2006).
VOIP and Wi-Fi has allowed small companies with very little personnel to obtain large corporate contracts, previously only available to market leaders such as Didata or AC-cabling. Small companies can now install wireless networks, carrying PC network traffic and voice calls, without the need for the labour intensive practices of cabling the offices.
The threat encapsulated in this force, is the dynamic nature and the vastness of rural Africa. As soon as companies or individuals recognize the need or opportunity, they will need to enter the market in order to capitalize; else their efforts will be unexploited as the technology has become outdated.
Outcomes Based Education
South Africa is just entering a new age where education is concerned. We have seen the first class emerge from the Government’s Curriculum 2005 – Outcomes Based Education. These learners are entering the private sector with skills other that those of students whom matriculated in 2004. Previous generations of matriculants were coached to continue their studies in order to fill their place in society. Students from technical schools were taught that their place in society was in the trade, and they were skilled in a specific trade.
In contrast to this , student whom have completed Curriculum 2005 have been given the option of subject such as Entrepreneurial ship and Business Basics this offsets the social stigma attached to business failure and entrepreneurship which in itself was broadly misunderstood and hardly supported as a career choice. The matriculated youth are entering the market place with ideas on how to gain small percentages of larger markets form part of the curriculum, thereby enabling the student as an entrepreneur. They have been instructed in how to take advantage of situations and circumstances, rather that what textbooks would dictate as a course of action.
In an attempt to counter the country's persistent unemployment rate, entrepreneurship has become a key part of the evolving the youth of tomorrow. According to the Global Entrepreneurship Monitor. (GEM) students can't rely on getting good jobs when they graduate, so they're being taught to create their own work (CSMonitor, 2006). Primary Schools such as Weltevreden Park Primary encourage entrepreneurship by hosting an “Entrepreneurship Day” in November. Last year student sold items such as shaving cream filled pies, jam filled syringes, and one group of students sold Car Washes at R40-00 each, and employed other students to wash at R8-00 per car, managing a net profit without getting wet (CSMonitor, 2006).
The South African government through its Curriculum 2005 - Outcomes Based Education program is a driving force in its own right. In order to contribute to the full personal development of each learner and the social and economic development of the society at large, the learner is made aware of the importance of developing entrepreneurial abilities.
The Government has contributed R89 million to the Umsobomvu Fund which will begin dispensing funds for youth development from early 2006. The fund has three broad programmes consisting of a youth information service, a skills development and transfer programme and a youth entrepreneurship programme.
While compiling the assignment it became clear that the five forces chosen could not be seen as totally separate. They are indeed inter-dependent. When one is forced to retire early, it is not likely that companies would employ an older person, as the youth entering the marketplace is more technologically minded, and have a mindset to start and venture. This is exactly what companies need to maintain their competitive edge, and to introduce them to new markets. This also turn drives the retrenched to available own employment through the information available. By purchasing magazines such as Your Business and Succeed, he would be exposed to over 400 tried and tested franchised concepts.
Government grants prospective business owners the resources and training to be able to start their venture. Various government endorsed programs steer entrepreneurs in the crafts and tourism industry seeking to draw further foreign investment in South Africa. Larger corporate are also reaping reward from the entrepreneurial explosion. If you are a BEE candidate, Absa takes it even further through their Franchise Start-up package, whereby an individual receives full financing for the franchise, and does not pay interest of capital for the first year of operations. But these are only small steps. Government took the plunge in 2000, to introduce Curriculum 2005 – Outcomes Based Education, preparing the youth of South Africa to break free of the conformist thinking that their education will guarantee job opportunities, and to generate opportunities for themselves.