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THE cover story for Finweek magazine this week is on the relationship between entrepreneurs, small business and the unemployment crisis facing South Africa at the moment.
Writing it presented a pleasant opportunity for me to revisit some of the statistics and findings of the annual Global Entrepreneurship Monitor (Gem) report, which assesses the state of entrepreneurship and entrepreneurial activity in a region, as well as talk to some of the people involved in entrepreneur-focused activities in South Africa.
Unfortunately, a large part of it was really depressing, considering the optimistic mood still present from the 2010 FIFA World Cup.
The hard stats from the Gem report for South Africa were pretty sobering: we ranked badly in terms of business cost, low workforce education levels and restrictive labour legislation.
But for me, the most telling statistic came from Allan Gray Orbis Foundation CEO Anthony Farr. He pointed to research showing that in the US, 70% of all university graduates will at some point in their career try and start their own business.
In other words, you are as likely to start a business in the US as you are to get married or have children.
Lack of funding just a myth
In South Africa, the same data show that only 6% of our population make the leap and start their own business.
The naysayers will of course point out how difficult it is to do business in South Africa, and how there is little or no funding for small- and medium-sized enterprises (SMEs) - a myth which probably needs to be killed.
According to the Gem report, less than 10% of businesses in South Africa complained that access to financing is a reason not to run an SME.
I don't want to sound too much like Robert Kiyosaki of Rich Dad, Poor Dad fame, but Farr is right. We don't create the choice of going into small business as an option for our kids. Parents will spend their lives saving for tertiary education for their children, and then hoping they will qualify and find a job at a company with nice benefits.
The problem is that every few years there will be a dip in the economic cycle and jobs will be cut. You, as a parent, are left hoping that some corporate will be kind enough to pull the trigger and decide that they must add a few more heads to employ your offspring.
Greeks and Portuguese show the way
There is that cliché of the Portuguese or Greek child who works behind the counter in the fruit and veg store or the Spar or Pick n Pay owned by their folks, with the proud parents saying that one day they will be able to pass this on to their offspring.
But until that time, the child needs to work for little or no pay and learn how the business runs.
Some might have a quiet laugh about this, but how many family-owned businesses have been able to create employment opportunities or a safety net for their kids in the last 12 to 18 months?
How many young South Africans can look back on their time employed in a family-owned business, and know that they have acquired skills they could take into the formal or informal workforce, irrespective of the economic conditions?
I know both my wife and I can, and many of our friends as well.
However, those whose parents lived by the clock-watching and "what's on your CV" approach to employment are the ones who are battling to create opportunities when there simply aren't jobs available.
The humble conclusion for this week: as parents we always talk about how entrepreneurship should be taught in schools, but maybe the reality is that it starts much closer to home.
- Fin24.com
Writing it presented a pleasant opportunity for me to revisit some of the statistics and findings of the annual Global Entrepreneurship Monitor (Gem) report, which assesses the state of entrepreneurship and entrepreneurial activity in a region, as well as talk to some of the people involved in entrepreneur-focused activities in South Africa.
Unfortunately, a large part of it was really depressing, considering the optimistic mood still present from the 2010 FIFA World Cup.
The hard stats from the Gem report for South Africa were pretty sobering: we ranked badly in terms of business cost, low workforce education levels and restrictive labour legislation.
But for me, the most telling statistic came from Allan Gray Orbis Foundation CEO Anthony Farr. He pointed to research showing that in the US, 70% of all university graduates will at some point in their career try and start their own business.
In other words, you are as likely to start a business in the US as you are to get married or have children.
Lack of funding just a myth
In South Africa, the same data show that only 6% of our population make the leap and start their own business.
The naysayers will of course point out how difficult it is to do business in South Africa, and how there is little or no funding for small- and medium-sized enterprises (SMEs) - a myth which probably needs to be killed.
According to the Gem report, less than 10% of businesses in South Africa complained that access to financing is a reason not to run an SME.
I don't want to sound too much like Robert Kiyosaki of Rich Dad, Poor Dad fame, but Farr is right. We don't create the choice of going into small business as an option for our kids. Parents will spend their lives saving for tertiary education for their children, and then hoping they will qualify and find a job at a company with nice benefits.
The problem is that every few years there will be a dip in the economic cycle and jobs will be cut. You, as a parent, are left hoping that some corporate will be kind enough to pull the trigger and decide that they must add a few more heads to employ your offspring.
Greeks and Portuguese show the way
There is that cliché of the Portuguese or Greek child who works behind the counter in the fruit and veg store or the Spar or Pick n Pay owned by their folks, with the proud parents saying that one day they will be able to pass this on to their offspring.
But until that time, the child needs to work for little or no pay and learn how the business runs.
Some might have a quiet laugh about this, but how many family-owned businesses have been able to create employment opportunities or a safety net for their kids in the last 12 to 18 months?
How many young South Africans can look back on their time employed in a family-owned business, and know that they have acquired skills they could take into the formal or informal workforce, irrespective of the economic conditions?
I know both my wife and I can, and many of our friends as well.
However, those whose parents lived by the clock-watching and "what's on your CV" approach to employment are the ones who are battling to create opportunities when there simply aren't jobs available.
The humble conclusion for this week: as parents we always talk about how entrepreneurship should be taught in schools, but maybe the reality is that it starts much closer to home.
- Fin24.com
