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Johannesburg - South Africa’s tax and regulatory environment is not agile and flexible enough to assist a growing business, according to the EY G20 Entrepreneurship Barometer.
In August this year EY released its second G20 Entrepreneurship Barometer which measures the relative strengths and weaknesses in the way that the G20 nations are nurturing entrepreneurs and assisting in the development of their businesses.
The barometer looks at the five key pillars that EY believe are critical in this regard. Namely, access to funding; the presence of an entrepreneurial culture; a ‘friendly’ tax and regulatory environment; relevant education and training: and, well co-ordinated public and private sector support.
Starting with the last of these, EY Africa ‘s strategic growth markets leader, Cheryl-Jane Kujenga said the group intentionally called this year’s report “Power of Three”, as it believes the co-ordinated support of government, big business and entrepreneurs is “critical” to encouraging entrepreneurship.
South Africa is ranked eighth in terms of co-ordinated support, said Kujenga, which on the surface is not too bad.
“If we compare ourselves to the other emerging nations that puts us behind Brazil, India and Turkey – and reflects the need for government and big business to start to support entrepreneurs in a more meaningful way.”
“We were ranked sixth out of the G20 nations because on the surface the DFI’s and the banks have systems and processes geared towards entrepreneurship.
“However, our entrepreneurs believe that the available funding is still quite expensive and does not necessarily enable them to grow their businesses at the rate that they would like.”
According to EY, education and training is another area that deserves a greater focus.
“Our government spends a lot of money on education,” said Kujenga.
The big question, from an entrepreneurship perspective, is whether that money is being spent in the right areas, she said.
“It should be about providing the type of education that creates a skilled labour force, capable of supporting a growing business. It’s also about promoting ‘the stem subjects’ - science, engineering and mathematics – in order to foster a culture of innovation, research and development.”
“I think we’ve seen a lot of initiatives in this regard ... but we still a have a long way to go”, added Kujenga.
When it comes to the tax and regulatory environment South Africa was ranked fifth by the G20 Entrepreneuship Barometer.
“Mainly because of some of the great processes that we have around our tax and some of our regulations systems,” said Kujenga.
“But what we have found is that they are still not agile and flexible enough to assist a growing business. On the contrary, a number of small business owners have said that they prefer to stay small and ‘informal’ in order to avoid some of the labour and tax regulations.”
Again, this is an area where the government should be talking more to entrepreneurs, she said.
- Fin24
In August this year EY released its second G20 Entrepreneurship Barometer which measures the relative strengths and weaknesses in the way that the G20 nations are nurturing entrepreneurs and assisting in the development of their businesses.
The barometer looks at the five key pillars that EY believe are critical in this regard. Namely, access to funding; the presence of an entrepreneurial culture; a ‘friendly’ tax and regulatory environment; relevant education and training: and, well co-ordinated public and private sector support.
Starting with the last of these, EY Africa ‘s strategic growth markets leader, Cheryl-Jane Kujenga said the group intentionally called this year’s report “Power of Three”, as it believes the co-ordinated support of government, big business and entrepreneurs is “critical” to encouraging entrepreneurship.
South Africa is ranked eighth in terms of co-ordinated support, said Kujenga, which on the surface is not too bad.
“If we compare ourselves to the other emerging nations that puts us behind Brazil, India and Turkey – and reflects the need for government and big business to start to support entrepreneurs in a more meaningful way.”
Watch the interview
“Looking at the other pillars, access to funding is one where we do relatively well,” said Kujenga.
“We were ranked sixth out of the G20 nations because on the surface the DFI’s and the banks have systems and processes geared towards entrepreneurship.
“However, our entrepreneurs believe that the available funding is still quite expensive and does not necessarily enable them to grow their businesses at the rate that they would like.”
According to EY, education and training is another area that deserves a greater focus.
“Our government spends a lot of money on education,” said Kujenga.
The big question, from an entrepreneurship perspective, is whether that money is being spent in the right areas, she said.
“It should be about providing the type of education that creates a skilled labour force, capable of supporting a growing business. It’s also about promoting ‘the stem subjects’ - science, engineering and mathematics – in order to foster a culture of innovation, research and development.”
“I think we’ve seen a lot of initiatives in this regard ... but we still a have a long way to go”, added Kujenga.
When it comes to the tax and regulatory environment South Africa was ranked fifth by the G20 Entrepreneuship Barometer.
“Mainly because of some of the great processes that we have around our tax and some of our regulations systems,” said Kujenga.
“But what we have found is that they are still not agile and flexible enough to assist a growing business. On the contrary, a number of small business owners have said that they prefer to stay small and ‘informal’ in order to avoid some of the labour and tax regulations.”
Again, this is an area where the government should be talking more to entrepreneurs, she said.
- Fin24
