South Africa has been named one of sub-Saharan Africa’s entrepreneurial frontrunners, after a global report placed the country in second place, after African counterpart Botswana.
According to the Entrepreneurial Ecosystem of South Africa: A Strategy for Global Leadership Report, researched and produced by the Global Entrepreneurship and Development Institute (GEDI) – a research organisation that studies entrepreneurship and economic development – with support from SEA Africa (local organisers of the Global Entrepreneurship Congress), South Africa’s entrepreneurs continue to make good strides with entrepreneurial activity.
The report was commissioned by the Allan Gray Orbis Foundation and the South African Breweries (SAB) Foundation. These two leading local foundations, which are committed to developing entrepreneurship in South Africa, commissioned the report in order to better understand the role that entrepreneurship is playing in the country.
The intention was also to benchmark South Africa globally, celebrate achievements and strengths, and to assess areas for improvement so as to know how best to guide resources and policy in the coming years.
The report states that entrepreneurs in South Africa have overcome structural factors, including the country’s slow GDP growth rate and the number of large firms dominating the business market to produce some of the most successful enterprises on the continent.
The country is poised to achieve further growth in years to come through entrepreneurship and indicates that South Africa is on par with other middle income countries around the world when it comes to entrepreneurship, and provides the institutional support necessary for high-growth businesses to start-up and thrive.
South Africa was ranked 55 out of the 137 countries surveyed globally. The ranking places Botswana in first place from Africa, followed by South Africa, Namibia, Gabon and Ghana.
“The report confirms South Africa’s position as an entrepreneurial leader on the continent and provides an insightful road map for us to focus in on those areas that will provide the greatest leverage for accelerating our entrepreneurial ecosystem even further,” says Anthony Farr, CEO Allan Gray Orbis Foundation.
“We work with approximately 80 new entrepreneurs every year and have positive experiences of innovation and growth, along with a well-developed (if a little fragmented) entrepreneurship ecosystem. We have struggled to reconcile this with some misconceptions regarding South Africa’s lack of entrepreneurship and our perceived poor performance against other countries. Along with Allan Gray Orbis Foundation, we wanted to give an alternative view. We are pleased with the results, which show that South Africans can congratulate themselves and be proud of what has been achieved in the entrepreneurial space, while still being realistic about what needs to improve in order to drive economic growth and job creation,” says SAB Foundation Director, Bridgit Evans.
The findings highlight South Africa’s positive performance in entrepreneurial aspirations, innovation, high growth, internationalisation and risk capital, all considered important elements to achieve economic growth in the country. It further states that SA provides better conditions for entrepreneurship when compared to 20 other countries with a higher per capita GDP, including Russia, Mexico, Brazil and China.
The GEDI report covered 28 countries in the Africa region, which amounted to 54 percent in total. The report demonstrates the country’s position globally when it comes to new businesses, competitor position, new businesses offering new products and new businesses using new technology, and ranked the country in the top 25 percent of countries surveyed globally in these areas. But stumbling blocks exists, and factors such as finance, skills, access to local and international markets, education and the right network need to be addressed to ensure that South African entrepreneurs are able to grow and thrive.
The report suggests that South Africa needs better, innovative and growth-orientated entrepreneurs who are motivated to grow and prosper within the South African environment and through constant engagement with the global economy.
“Top actions that could strengthen the entrepreneurial ecosystem include helping more entrepreneurs get the skills they need, expand access to banking, particularly mobile banking and accelerating technology absorption, with a focus on digital technology,” the report says.