A development plan for emerging entrepreneurs in South Africa

Abstract

Since the Apartheid era, the South African economy has been a mix of two separate and distinct economies. The first world economy consisting mostly of white owned and formal businesses on one hand and the third world economy consisting of mostly black owned and informal businesses. Economic activities of emerging entrepreneurs have been restricted to mostly the black townships and rural areas, whereas, first world entrepreneurs have been actively involved in the mainstream economic activities. The separation between the two economies has resulted in a situation whereby there is a wide gap in entrepreneurial and technical skills and knowledge between emerging and first world entrepreneurs. The result of this imbalance in skills and knowledge has been a situation in which a minority of the population has been in control of more than 80 % of the wealth of the country. Upon gaining independence in 19994, the new South African Government embarked on the Reconstruction and Development Program (RDP) to redress the imbalances of the past. More recently the government has adopted the Growth Employment and Redistribution (GEAR) macro economic strategy to grow the economy, create employment and redistribute wealth. To accelerate the implementation of the macro economic strategy, the government has passed a number of Acts namely: The National Small Business Promotion Act (102/1996), Skills Development Act (97/1998), Affirmative Procurement Act (5/2000), Mineral and Petroleum Resources Act (28/2002), in an effort to redress the imbalances of the past and most recently the Mining Charter (2003), Petroleum Charter (2003), Financial services Charter (2003), and the Information Communications Technology (ICT) Charter (2004), all efforts of the private sector to redress past imbalances The small business has been seen as a vehicle to create employment, promote economic growth and redistribute wealth; as such the promotion of entrepreneurship has been identified as a critical aspect of GEAR. Irrespective of all the legislation and programs in place, the rating of South Africa in terms of entrepreneurship as evidenced by the findings of the Global Entrepreneurial Monitor reports (GEM, 2001; GEM, 2002) is below average. The wide gap in skills and knowledge between emerging and first world entrepreneurs in South Africa is a contributing factor to the poor rating of the country in terms of entrepreneurship. The gap in skills and knowledge between emerging and first world entrepreneurs is expected to become even wider as the new knowledge economy unfolds, if corrective measures are not taken by the government or private sector. In order to improve South Africa's rating in terms of entrepreneurship, the government and private sector need to put programs in place to minimize the skills and knowledge gap between emerging and first world entrepreneurs. The changes in the economic and political systems of South Africa from apartheid to free enterprise and most recently from industrial to knowledge economy have contributed to the widening gap in skills and knowledge of the two camps of entrepreneurs. The objective of this study is to come up with a development plan to minimize the gap in skills between emerging and first world entrepreneurs. The study proposes the need for a holistic approach to solving the problem rather than a piece meal approach. The study proposes the need to clearly identify the factors responsible for the low level of skills and knowledge amongst emerging entrepreneurs, before any meaningful action can be taken to address the situation. In terms of possible interventions the study proposes the application of lewin's model of managing change, the principles of breakthrough thinking and the peak performance enhancement model of Coetsee (2002:140).