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Motivational Factors Affecting Informal Women Entrepreneurs

Associate Professor within the Leadership and Organisational Behaviour Academic Area at Unisa’s Graduate School of Business Leadership (SBL), Professor Sanchen Henning in partnership with MBL student, Kariba Akoob, discuss the motivational factors that affect women entrepreneurs in rural areas of the North-West Province.

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The emergence of a growing community of women entrepreneurs has been a significant economic and social development across the globe.  In South Africa, government has prioritised entrepreneurship and the advancement of small, medium and micro-sized Enterprises (SMMEs) as the catalyst to achieving economic growth and development.

According to a report by SEDA 80% of women entrepreneurs are involved in the informal sector compared to 65 per cent of their male counterparts.  Although this represents a significant percentage, there is limited literature available on female entrepreneurs in the informal sector in South Africa.

In rural settings, where there is a strongly pronounced patriarchal African society, a woman is not expected to make economic decisions such as starting a business and requesting resources and goods to make it work but to rather tend to home responsibilities.  Within this social structure, the achievement, motivation and self-assurance of female entrepreneurs can be negatively affected.

To understand the motivational factors that drive women entrepreneurs in rural settings, a study was conducted in 2017 aimed at women entrepreneurs in the Mahikeng area in the North-West province.  The study sought to understand what drives these women in starting up informal enterprises, the barriers they experience and their developmental business needs.

The North-West Province where Mahikeng is situated, recorded the largest annual decrease in the official unemployment rate amongst the nine provinces in South Africa, from 26.8% to 25.2% according to a Stats SA report. Despite this fact, the province has a labour force participation rate of 2.3%.  The majority of households are headed by women as men are mostly migrant labourers on mines. They live with fewer resources, fewer rights and fewer opportunities because of factors such as domestic violence, the lack of education and gender discrimination.

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

Research has indicated that there is a significant intersection between being a woman, working in the informal sector and being poor.  A higher percentage of people in the informal sector relative to the formal sector are poor. Informal economic activities are unrecorded but are estimated at a value of 28% of South Africa’s total gross domestic product (GDP). That is R160 billion, which makes its value 2.5 times as large as the contribution of the entire agricultural sector, or 70% of the contribution of the mining sector to GDP.

The study on Mahikeng’s informal women entrepreneurs discovered that there were three key underlying motivational factors that drove them to becoming entrepreneurs.  These were destitute conditions, an entrepreneurial spirit and a passion for their products.

Destitute conditions

A key driver cited by 83% of respondents for starting an informal business was to move away from ‘destitute conditions’.  Destitute conditions are associated with factors such as having an insufficient family income and the difficulties in finding a job.  These factors can be defined as ‘push’ factors and extrinsically motivated as women aspire to escape and move away from their unfortunate circumstances such as poverty and dependence on their male partners.

An entrepreneurial spirit

However, the need to transcend impoverished conditions and the need for self-determination were almost equally strong amongst the participants.

Self-determination can be linked to the entrepreneurial spirit which is described in terms of self-fulfilment, the need for independence and the need for a challenge.  These are ‘pull’ factors as women aspire towards certain ambitions, which are intrinsically motivated.  As high as 78% of the Mahikeng women entrepreneur respondents shared a passion for business and a high entrepreneurial flair.

The research pointed strongly to the fact that an entrepreneurial spirit mixed with the right amount of skills training could enhance the performance of informal female entrepreneurs. If fully developed, it could lead these women entrepreneurs to move out of survival mode into profit maximisation.

Passion for product

Mahikeng’s women entrepreneurs displayed a keen sense of confidence in their product, or the eagerness to develop a sideline interest into a profit-making venture.  This factor is also perceived as a ‘pull’ factor which is intrinsically motivated, and 43% of respondents listed this factor as the third most important reason for starting a business.

Related: 13 Female Entrepreneurs Rising To The Top In SA

Barriers to success

Women within the informal sector are less educated and have fewer marketable skills with most of the respondents not having a secondary qualification.  Although the South African government has established many pro-women support structures over the last two decades to provide a variety of support to emerging entrepreneurs, the need for gender-specific and informal sector–specific training and development still exists. In terms of their training and development needs, 91% of the women interviewed indicated that they had never been exposed to any training programmes by government or a private organisation.

Lack of business and financial skills was ranked as the biggest obstacle to a successful business followed by the lack of a business network, which is necessary in maintaining and expanding an informal enterprise.

It is important that both the public and the private sectors acknowledge the importance of the informal business sector in South Africa. With a labour force participation rate of 2.3% the rural villages in the Mahikeng district in North-West do not paint a picture of growth and prosperity.

Informal women entrepreneurs are firstly propelled by the need to survive; in other words, the women do business to escape poverty. As an extrinsic motivation, it pushes them towards creating security for their family and not towards profit maximisation. They are driven to entrepreneurship out of necessity or destitution. Their entrepreneurial activities are viewed as a safety net that provides employment and income-earning opportunities for those excluded from formal sector employment. Many women engaged in the informal sector would in its absence be unemployed and unable to access alternate forms of income.

Competence is a necessary skill and an enabler of a self-efficacy; that is, the belief that one are the master of one’s own destiny. Building on strengths is more effective than trying to improve weaknesses.  However, self-efficacy behaviour without the necessary support will take informal women entrepreneurs only so far.  Access to basic infrastructure, training, funding and business networks will enable self-efficacy behaviour of women entrepreneurs in the Mahikeng district to move themselves and their communities from poverty to prosperity.

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Bonang Matheba Announced As 2018 AWIEF Awards MC

AWIEF has announced multi –award winning radio host, TV presenter and style icon, Bonang Matheba as the 2018 AWIEF Awards MC and host.

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Bonang Matheba, affectionately referred to by fans as Queen B, has firmly positioned herself as Africa’s most sought after entertainment personality and SA’s number one social media darling.

With just three weeks from recognising, honouring and celebrating women entrepreneurs and business-owners in Africa for their innovation, excellence and contribution towards economic growth and social development, AWIEF has also announced songstress, BUCIE as the music entertainer for the night.

40 Finalists out of more than 1350 nominations were revealed for the AWIEF Awards last month. Winners will be announced at The Westin Hotel in a five-star gala dinner on 9th November 2018.

Tickets to the awards evening are selling fast. To secure your seat, please click here.

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Things Schools Need To Stop Doing To Grow Entrepreneurs

Here are 8 things that would make a significant impact on generating enterprising behaviour.

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It is no secret that the current structure of the education system was designed in an entirely different age to achieve economic outcomes that are no longer viable due, in large, to the rapid innovation and adoption of technology.

But if we are to hope to help President Ramaphosa implement his vision for entrepreneurship as stated in the SONA 2018 address as, “The establishment through the CEOs Initiative of a small business fund – which currently stands at R1.5-billion – is an outstanding example of the role that the private sector can play. Government is finalising a small business and innovation fund targeted at start-ups,” we need to change how and what schools are teaching for this to be realised on a large scale.

Here are 8 things that would make a significant impact on generating enterprising behaviour:

1. Stop teaching kids using one or two teaching methods

Typically, teachers have defaulted to talking, reading and some visual aids to impact knowledge to learners and those children that don’t learn using these primary methods are at a disadvantaged and are often labelled as challenged. There are at least 6 different ways in which people learn, and entrepreneurs often fall into the lesser known ones. By blending methodologies that include interpersonal, kinaesthetic and intrapersonal with the more traditional ones, entrepreneurs will learn more effectively.

2. Stop Rewarding Conformity

Maybe it comes from a fear of anarchy or lawlessness, but the stringent rules that exist in schools punish children for exhibiting individualism and reward children for staying in line. Quite literally. This unwavering adherence to the rules without question, breeds thinkers of the same calibre and releases into the world children that cannot function without set structures that they must conform to when they actually need to be creatively problem solving in order to make a mark for themselves.

Related: Spark Schools: Adapting At The Speed Of Scale

3. Stop Measuring Memory

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How well a child can retain the dates, figures, theories or equations does not indicate the measure of a child’s intelligence. It only indicates how well their memory works and how adept the learner is at recalling what they have read or been taught. Remembering, according to Bloom’s Taxonomy, is a lower order thinking skill. Instead, let’s measure critical thinking, interrogation of ideas, application of thinking across contexts.

4. Stop Being a Teacher

When the world relied on a central person as the curator of knowledge, the world needed teachers. They were idolised and hailed as a custodian of growth and development due to the fact that they knew more about their subject than anyone else in society.

Today, the internet is the purveyor of information, a teacher if you will, and children no longer need to be taught the information but what to do with it. So long as children can read, the job of person at the front of the class is to educate not to teach.

5. Stop Running a Factory

From the uniforms to the desks to the bell that signals the start and end of lessons and the allotted amount of time dedicated to eating and going to the bathroom, schools are churning out citizens primed for factory work. The production line mentality has been conditioned into our children so much so that with the entry of technological automation and the removal of the human element in these mundane, routine tasks, we make them immediately redundant to the world.

6. Stop Labelling Every Disruptive Child as ADHD/ADD

As an educator myself and now an entrepreneur, I recognise the exhausting and relentless burden that our school-based teachers bare. They are weighed down with administration and parental expectations all whilst trying to navigate an education system that is increasingly deficient. Any child that does not learn in the usual manners and requires more attention or additional stimulation by non-traditional teaching methods.

If, as a country, we are dedicated to changing the current economic outlook not just for ourselves but for those that will inherit this legacy then the systems that shape our thinking must be changed too. Entrepreneurial thinking and action is discouraged and punished in our current education system and only once children leave behind the 12 years spent at school can they begin to unlearn this way of mental conditioning and become active citizens.

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Chivas Venture Calling On South African Start-ups To Win A Share Of $1 million

South African applications for the Chivas Venture 2019 Now Open!

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Today Chivas Regal announced the launch of the Chivas Venture 2019 – a global competition that gives away $1 million in no-strings funding every year to the hottest social start-ups from around the world.

The Chivas Venture provides a global platform for innovative enterprises that are using business to solve an array of social and environmental issues – and today marks the opening of the South African applications. 

Since the competition’s launch in 2014, Chivas Venture-supported enterprises have enriched the lives of more than 1 million people in over 40 countries, across six continents.

Just as Chivas blends together whiskies to create award-winning Scotch, the Chivas Venture champions entrepreneurs who blend profit and purpose. Chivas’ belief in blending ambition with generosity, and in using success to enrich the lives of others, was instilled in the 19th century by founding brothers James and John Chivas. Today that philosophy is kept alive not only through award-winning Scotch, but also through initiatives including the Chivas Venture.

Richard Black, Global Marketing Director for Chivas, said:

“At Chivas we believe that blended is better – in life, business and Scotch – and the 100 finalists we have supported to date have proved this, finding the right blend of profit and purpose in their ventures. Since taking part, finalists have reported saving 8 million trees from deforestation, providing 24 million litres of safe drinking water to those in need, and funding 75,000 days of education for women and girls – and that’s just a few examples. The Chivas Venture is continuing to have a global impact and we are proud to be investing another $1 million for 2019.”   

Related: Venture Capital 101: The Ultimate Guide To The Term Sheet

Applicants in each participating country will compete in local heats, with the South African winner flying to the United Kingdom to take part in an exclusive Accelerator Programme. Hosted by The Conduit – a new London establishment that serves as a home for a diverse community of people who are passionate about social change – the intensive training programme will give the global finalists the chance to hone their business and pitching skills.  

Following the Accelerator Programme, the allocation of the first $100,000 of the fund will be put into the hands of the public with three weeks of online voting. The Chivas Venture 2019 will then culminate in a series of high-stake pitches at the Global Final in Europe, where the finalists will battle it out for the remainder of the $1 million fund.

Radley Connor, Marketing Manager for Chivas Regal SA says, “The Chivas Venture is an amazing platform for South African social entrepreneurs to attract investment and gain global exposure. The competition rewards and celebrates individuals whose purpose is to make a positive difference to society. If you have a great idea, that meets the requirements, we encourage you to enter.”

In 2017, innovative South African water company I-Drop water placed third in the global finals, walking away with close to R1 million in funding. Since winning, founder James Steere has received interest from investors globally.

Clement Mokoenene is the 2018 South African winner and the creator of the Vehicle Harvest Energy System (VEHS). His business is able to generate electricity at a much lower, affordable cost than coal-fired power stations which South Africa currently relies on. The system works by installing an overlay on the existing road to extract the pressure and transferring it to the side of the road, similar to a wind turbine. Mokoenene says a 1km highway stretch could generate enough energy to supply the entire South Africa.

To apply for the Chivas Venture 2019 and find out more about why blending profit and purpose is better, visit the Chivas Venture website.

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