By Dr. Kerrin Myres, Associate Professor at the Gordon Institute of Business Science (GIBS), and Mzila Mthenjane, Executive Head of Stakeholder Affairs at Exxaro
Entrepreneurship and SMMEs serve as the powerhouse of societal development and progress, driving innovation and economic growth. By creating products and services that capitalise on new opportunities and address societal challenges, these critical businesses stimulate job creation, productivity, and more sustainable communities. And in a reeling economy that is slowly recovering from an ongoing pandemic, the promotion and empowerment of entrepreneurs and small businesses is imperative.
Yet, research shows that South Africans are not as entrepreneurial as the rest of Africa. According to the Global Entrepreneurship Monitor South Africa (GEM SA) 2019/2020 report, South Africa’s entrepreneurial ecosystem was rated as one of the most challenging in 2019, ranking 49th out of 54 global economies, ahead of only Croatia, Guatemala, Paraguay, Puerto Rico, and Iran. The report also found that only 11.9% of local respondents (or one in every eight South Africans) have entrepreneurial intentions of starting a business within the next three years – a stark contrast to the average of 40% on the rest of the continent.
This figure is the most concerning. The fact that start-ups and SMMEs fail is not unusual – new businesses by their very nature are prone to failure anywhere in the world. But not enough South Africans are starting businesses in the first place – and this mentality needs to change.
An entrepreneurial mindset and culture shift starts with business education, skills development, and mentorship. Private-sector support through Enterprise and Supplier Development (ESD) initiatives play a huge role in cultivating and fostering entrepreneurs. Let us look at how we can encourage more entrepreneurship in our country and empower existing small businesses to drive their economic growth.
Business education for an entrepreneurial spirit
Education – both at a school and business level – is the building block for empowered and successful entrepreneurs. First and foremost, we need to be teaching entrepreneurial skills from a young age, educating our children on what is involved in starting a business with entrepreneurial-based courses at school. Parents and teachers have a responsibility here – instead of asking children, “what do you want to be when you grow up?”, we should be asking them, “what kind of business are you going to start?”. We have been ingrained to believe that being an employee is our only option when we matriculate. It is up to us to show the youth that they are in full control of their destinies and the possibilities are endless.
At a business level, education is even more important. Exxaro and GIBS recognise the immeasurable value of educating local entrepreneurs – our partnership on the newly launched Contractor Development Programme is a testament to this. To promote and support the advancement and empowerment of local Exxaro suppliers, the programme upskills entrepreneurs by providing business education and mentorship. Ultimately, if the small businesses grow and sustain themselves, they have massive potential to contribute positively to economic growth and reduce unemployment, poverty, and inequality.
The aim of this programme is to help participating contractors to learn from other entrepreneurs’ experiences, rather than learning through trial and error – giving these entrepreneurs a better understanding of how to overcome the operational challenges they face. Learning from others is the most powerful way you can learn, so interaction between the different suppliers via online classes is also encouraged.
Skills development for success
Coupled with continued learning, entrepreneurs also need to hone their business and technical skills. But this is easier said than done, as they have almost no time, energy, or money to spend on themselves when they are developing a business. However, neglecting personal development comes at a great cost: making expensive mistakes and not keeping up with competitors. A course like Exxaro’s Contractor Development Programme is an ideal way to acquire those skills without wasting resources like time and money, making mistakes.
Equipping entrepreneurs with the right skills at the right time, the programme understands that small business owners need different skills at different stages of their development and ensures that skills are aligned to what entrepreneurs’ experience. From business skills to strategy, marketing, finance, personal development, and industry-specific skills, the programme helps local suppliers develop the skills, attitudes, and values they need to make their businesses more competitive and respond to challenges.
Non-negotiables for entrepreneurial success include a hunger to learn every single day, building and nurturing strong stakeholder relationships, being action-orientated, and being able to pick yourself up after failure to keep moving. An open mind is another must-have for entrepreneurs to thrive – the world is constantly changing, and they need to be open to learning, changing, and pivoting, even if this means transforming their business or product to adapt accordingly.
The power of learning from others
Active mentorship is another key aspect of the programme, with contractors assigned to individual mentors based on their unique needs and skill requirements. A lot of effort has gone into making sure that the mentors and facilitators have practical entrepreneurial experience and industry knowledge they can pass on to the participants.
These mentors, who have started their own businesses, can guide participants, exposing them to new ways of thinking and helping them to tap into new skills – offering further value for these entrepreneurs.
The knock-on effects of corporate support
Unlike other ESD initiatives that are often limited to financial support, we believe that non-financial support, in the form of business education, skills development, and mentorship, is a crucial component of grooming entrepreneurs for success. Large corporates and industry leaders should consider combining both kinds of support in their ESD programmes to truly make a difference.
The benefits of impactful ESD projects extend far beyond organisations trying to be good corporate citizens and complying with legislation. They afford entrepreneurs amazing opportunities to develop their businesses and hone their skills. Empowered, knowledgeable and skilled entrepreneurs run well-developed companies, which are easier to do business with. So essentially, those that support entrepreneurs and small businesses are indirectly developing the economy and society, paving the way for a brighter future for all South Africans.
The untapped potential of entrepreneurship in our country is enormous – it is time to boldly embrace the myriad of business opportunities around us and build smaller, more adaptable companies that can move with the changing technological tides and emerging low carbon world.