South Africa lags behind other developing countries in entrepreneurial activity because too few young men believe they have the necessary skills to set up business, says the South African report in the 2003 Global Entrepreneurship Monitor.
The participation of South African women in entrepreneurial activity is similar to that of Mexico, Argentina, India and Brazil. However, low participation by men under the age of 45 has pegged South Africa’s enterprise index at 6,5, which is half the average of other developing countries — 13,1, over the past two years.
“Men between 25 and 44 years in South Africa are on average less than half as likely than their peers in other developing countries to be involved in entrepreneurship,” says the survey, by the University of Cape Town’s Graduate School of Business. “South African men between 18 and 24 years are less than 40% as likely to be entrepreneurs than are their developing country counterparts.”
Lack of confidence seems the key reason: only 35% of men under 45 believe they are capable of starting a business. That is slightly over half the average for other developing countries.
Overall, 28% of South Africans think they have the required skills. But just 23% of Africans believe they have the necessary skills, compared to 44% of whites, coloureds and Indians.
Africans without matric and who do not know an entrepreneur are the least likely to believe they have the required skills.
But Africans in Gauteng are not significantly different from other groups in “opportunity entrepreneurism” — choosing to go into business, rather being forced into it by poverty. People who believe they have the skills to start a business are seven times more likely to do so.
And entrepreneurial activity among young men with such a belief is not significantly different from those in other developing countries.
The survey indicates that skills and confidence, rather than lack of access to finance, is the key reason for low entrepreneurial activity.