SA’s economy dependent on entrepreneurs

The South African entrepreneurial sector is waning and as a result employment growth will suffer, the latest Adcorp employment index suggests.

The latest index for February indicated a marginal annualised increase of 1.5% in overall employment, equating to 24 000 new jobs in the economy.

Although jobs are still being created according to these figures, they showed an overall slowdown from the 80 000 jobs created in January.

The report also stated entrepreneurship was on the decline.

In 2001 250 000 people were actively involved in setting up their own small business enterprise. This figure dropped to 58 000 in 2011, equating to a massive 76% slowdown in small business creation.

If a small business employs 12 people on average, the pullback in entrepreneurial activity over the past five years equates to a massive 2.3-million possible job opportunities lost.

Although the decline could be connected to the 2008 global financial downturn and resultant recession the following year, the figures indicated a worrying trend.

Sixty-eight percent of South Africa’s workforce are at businesses who employ fewer than 50 people, and those employment prospects could wane if the current tendency continues.

“The real employment in our economy is happening right under our noses in the small and micro business sectors and we need to capitalise on that,” Dawie Roodt, chief economist at the Efficient Group told the Mail & Guardian.

Roodt said South Africa’s economy needed to inspire entrepreneurship.

“If we could create an environment which is not only more friendly to small business, but also actively encourages this sector, we’d immediately be better placed to create jobs,” Roodt added.

Kevin Lings, chief economist at Stanlib, said government needed to do more in supporting the “fundamentals of entrepreneurship”.

“South Africa needs a practical approach to facilitating entrepreneurship, nothing fancy. There is major scope to turn informal operations into slightly larger enterprises that will create more jobs,” Lings said.

Easier access to finance as well as improved logistic assistance are two simple measures Lings said would go a long way in supporting and developing budding entrepreneurs.

“It may well cost government money in the short term as small businesses tend to fail from time to time, but in the long run it is a risk worth taking. We can’t just rely on big business expanding and creating jobs,” Lings added.

But the need for the nurturing of small business development has been disputed in certain quarters.

Congress of South African Trade Unions spokesperson Patrick Craven said small business is not the only sector than can be relied on to create employment.

“We are always very sceptical about what businesses like Adcorp say about unemployment as they benefit in part from the current system. Nonetheless, we agree small businesses are important but they must work in conjunction with government initiatives and the big business sector in fighting unemployment,” he told the M&G.


De Klerk now admits apartheid was a crime against humanity

Apartheid’s last president walks back comments that definition was a Soviet plot

February 11 1990: Mandela’s media conquest

Nelson Mandela’s release from prison was also South Africa’s first ‘media event’. And, despite the NP’s, and the SABC’s, attempt to control the narrative, the force of Madiba’s personality meant that he emerged as a celebrity

Eastern Cape MEC orders graft investigation after two workers killed...

The killing of two council workers at the Amathole district municipality appears to be linked to tender fraud and corruption

Strike-off case pulls in judge

Judge Mushtak Parker is implicated in an application to strike off his former partners. He is also involved in the fight between the Western Cape high court’s judge president and his deputy

Press Releases

Response to the report of the independent assessors

VUT welcomes the publishing of the report of the independent assessors to investigate concerns of poor governance, leadership, management, corruption and fraud at the university.

NWU student receives international award

Carol-Mari Schulz received the Bachelor of Health Sciences in Occupational Hygiene Top Achiever Award.

Academic programme resumes at all campuses

Lectures, practicals, seminars and tutorials will all resume today as per specific academic timetables.

Strategic social investments are a catalyst for social progress

Barloworld Mbewu enables beneficiaries to move away from dependence on grant funding

We all have a part to play to make South Africa work

Powering societal progress demands partnerships between all stakeholders

So you want to be a social entrepreneur?

Do the research first; it will save money and time later

Social entrepreneurship means business

Enterprises with a cause at their core might be exactly what our economy desperately needs

Looking inwards

Businesses are finding tangible ways to give back – but only because consumers demand it