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 Everyone has a role to play in stimulating entrepreneurship

 

 Very often, any discussion about stimulating entrepreneurship devolves into a litany of things the government should be doing, but in reality there is very little that government can do on its own to persuade more South Africans to start their own businesses, and to support them to grow and prosper, says Byron Jeacocks, Business Partners Limited regional general manager.

Entrepreneurship is everyone’s concern – parents, teachers, accountants, big business, corporate managers, even workers and unions all have a clear interest in ensuring that South Africa’s entrepreneurs deliver on their much vaunted promise of creating jobs and wealth, improving products and services, driving economic growth and finding solutions to society’s needs.

Any overall plan to encourage entrepreneurship, if it is to work, has to be highly integrated with business, labour and civil society. Even the main role of government when it comes to entrepreneurship, namely creating an environment in which businesses can thrive, cannot be done without big business and labour playing their part, says Jeacocks.

A crucial tenet of entrepreneurship stimulus is providing equitable access to markets. Government’s part – ensuring fair competition while avoiding over-regulation – will do little if big business does not open up its supply chains to entrepreneurs. Rather than beating their suppliers to death on price, a developmental, supportive approach by corporations leads to robust, thriving supply chains that benefit everyone.

Organised labour too has a crucial role to play in access to markets for entrepreneurs by embracing subcontracting and outsourcing by large corporations as job creation opportunities rather than blocking it in its fight against the casualisation of labour, of-course within the ambit of the relevant labour regulations.

Labour also has an obvious role to play in another crucial part of any plan to stimulate entrepreneurship, namely developing a more flexible labour market, says Jeacocks. For example, with a few simple tweaks, government can restore the fairness and balance of South Africa’s labour tribunal system by requiring that testimony before the Commission for Conciliation, Mediation and Arbitration be done under oath. This will lead to a dramatic fall in false and frivolous cases brought against entrepreneurs. To its surprise, organised labour will find its membership increasing as entrepreneurs become less hesitant to employ more workers.

A third prong of stimulating entrepreneurship in South Africa is the launch of a mentorship movement which can transfer the skills, insights and wisdom of South Africa’s business elites, many of them retired, to the country’s emerging entrepreneurs. Government can provide the platform for such an initiative inside the South African Revenue Services (SARS), which is where the most intimate connection between government and entrepreneurs takes place.

Such a stone can kill several birds at once, says Jeacocks. Start-up businesses get free advice on the all-important task of setting up a proper accounting system. This will strengthen thousands of businesses that otherwise splutter along without proper management information. It will improve decision-making by entrepreneurs and decrease the start-up failure rate. SARS not only benefits from being seen as a place of support instead of punishment, but also from the much wider tax base that it will create.

Again, government cannot create such a movement on its own. Without major buy-in from the business sector, such an initiative will remain just another unsustainable low-key experiment.

A full-scale mentorship movement for South Africa’s entrepreneurs can extend to the educational challenge, which is a major brake on entrepreneurship. Not only is the new generation of entrepreneurs handicapped by their own inferior education, but the low levels of functional literacy and numeracy in the labour market requires almost impossible levels of on-the-job training by business owners.

Government obviously has a central role to play in solving the education challenge, but every educated South African will have to contribute through volunteer teaching and school support, says Jeacocks.

A one-stop support centre inside SARS can also help solve an enduring problem with the many government investment and business incentive schemes. A severe lack of information about and access to the schemes has led to an industry of middle-man consultants who skim off as much as 20% of the grant money just for helping businesses to apply.

There is no doubt that corruption seriously undermines entrepreneurship, says Jeacocks. It erodes trust in the entire economic system and exponentially increases the cost of doing business. While corruption is usually framed as a government issue, and while a strong commitment by government to clean administration is essential for the fight against corruption, business, labour and civic society has an indispensable role to play by not participating in it and practicing a culture of uncompromising vigilance against it.

Finally, says Jeacocks, entrepreneurship won’t thrive in a place where its heroes are not acknowledged and its value is not recognised. Although entrepreneurship as the pursuit of profit is an end in itself, it can be a delicate flame, especially in a place where the fire has not quite caught on yet. The celebration of entrepreneurship by all South Africans, including parents, worker, teachers, professionals and community leaders, provides the oxygen that it needs to grow.

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