The 2013 South African Global Entrepreneurship Monitor (GEM) research report published by the GEM South African team in the Development Unit for New Enterprise (DUNE) in the Faculty of Commerce had some good news for the South African economy. The research, which is the largest and most authoritative longitudinal study of entrepreneurship in the world, shows that South Africa’s entrepreneurial activity is on an upward trend.
Although the country still compares poorly with similar economies – the latest data shows South Africa’s TEA (total early-stage entrepreneurial activity) rate is at 10.6% compared to Brazil’s 17.3 % – entrepreneurship levels, as measured by the number of individuals who are engaged in starting or have just started a new business, are now at their highest since 2002.
Dr Mike Herrington, executive director of the GEM international operations and co-author of the GEM South African report, says that this is significant because entrepreneurial activity is understood to be a necessary condition of healthy societies, specifically as it contributes to economic growth and job creation, which in South Africa is a key concern.
The GEM study provides very clear guidelines as to what needs to be done to support entrepreneurs and boost job creation. Its recommendations include investing in changing attitudes and perceptions towards entrepreneurship, which are still poor in this country, fixing the education and health systems and cleaning up crime and corruption. “These elements are the potholes in South Africa’s road to economic success. And unless government takes the time to fill them in, very little will change and even the fanciest of policies to support entrepreneurs will founder,” cautions Dr Herrington.
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