Why are SA’s entrepreneurs reluctant?

“I could choose to be either an entrepreneur, or work in a corporate environment, but knowing that I have the opportunity to leave a legacy of companies that people love to work for is probably the most exciting thing about being an entrepreneur.”

That’s the view of up-and-coming technology entrepreneur, Tyler Reed, who spoke to Fin24.com recently.

However, Reed is a rare animal.

According to international research from the Global Entrepreneurship Monitor (GEM), he’s part of just 6% of the South African population who view entrepreneurship as a potential career path.

This is the paradox that faces the country as a whole: South Africans have ingrained the principle that work in the corporate sector is safer than attempting an entrepreneurial venture, and yet the corporate sector is failing the population.

That’s because unemployment continues to rise sharply toward 30%.

Simply put, corporates are not creating jobs.

Business owners admit there are some new opportunities for entrepreneurs as the historic dominance in certain industries weakens, partly owing to the Competition Commission, which has worked to break down cartel-type behaviour and allowed new entrants into the market.

However, some sectors, such as banking and financial services, have retained their high barriers to entry.

For most, this sector of the economy is firmly signposted “restricted entry” for all except those with the deepest pockets.

And there are other barriers to entry. Education remains a major hurdle for South Africa in both the formal and entrepreneurial sectors.

It’s no accident that the country’s most successful entrepreneurs such as Mark Shuttleworth, Adrian Gore of Discovery, or international rocket science guru Elon Musk, are highly skilled and educated individuals.

Orrin Klopper, spokesperson for the Entrepreneur Organisation (EO), believes that much focus still needs to be put on entrepreneur education in South Africa.