Fostering entrepreneurship

The study of economic activity and growth has become something of a science. It is therefore instructive to look at two recent reports that shed some light on the picture for female entrepreneurs in South Africa. Although the studies look broadly at entrepreneurship and not necessarily at the sectors in which the Industrial Development Corporation's Women Entrepreneurship Fund is active, they do provide some interesting insights into attitudes and trends.

The reports, called the Global Entrepreneurship Monitor (GEM) 2011 and the GEM 2010 Women's Report, measure, among other factors, the total entrepreneurial activity of various economies. The women's report showed that, between 2002 and 2010, women's perceptions about opportunities in the market increased most substantially and consistently in South Africa and Chile.

This could be attributed in part to the already large proportion of women involved in business or entrepreneurial endeavours in the country, which at 47% is one of the highest. The global measure of female total entrepreneurial activity varies widely from as low as 1.5% and the global average for the so-called efficiency-driven economies, which includes South Africa, is 9.7%. This higher percentage of women's entrepreneurial activity is actually true of the sub-Saharan economies, where women make up close to, or more than, half of entrepreneurs.

"The sub-Saharan African economies generally have higher established business rates for women," states the report. "For the efficiencydriven economies, South Africa and several Latin American/Caribbean economies had relatively more women entrepreneurs than established business owners.

"The most recent GEM report mirrors this assessment and shows that South Africa's women entrepreneurs are up there with the most enterprising counterparts elsewhere in the world. According to this report, an estimated 388-million entrepreneurs globally were actively pursuing starting a new enterprise or involved in running a new business in 2011.

Of this number, 163-million were women in the early stages of entrepreneurship. "GEM surveys conducted before 2010 have shown that men in South Africa are 1.5 to 1.6 times more likely to be involved in early-stage entrepreneurial activity than women are," it states. "However, the 2010 adult population survey indicated a male total entrepreneurial activity rate that was only 1.2 times higher than the female total entrepreneurial activity rate. In 2011, this figure has again increased to 1.6. The male total entrepreneurial activity rate was at 11.3%, as opposed to the female total entrepreneurial activity rate of 6.9%."

South African women entrepreneurs fare quite well compared against international figures. Local participation levels grew almost 44% between 2006 and 2011, although South Africa's were overshadowed by the almost two-thirds  increase in China. Brazilian female entrepreneurs pipped their male counterparts by claiming 53% of early-stage entrepreneurial activity in the latest study. This lag of total entrepreneurial activity is reflected in South Africa's overall entrepreneurship performance, which has been stuttering along for some time now and consistently underperforms against other emerging countries.

Entrepreneurial activity
The 2011 GEM report shows that South Africa's total entrepreneurial activity of 9.1% barely climbed from the previous year's 8.9%, which is far below the average of comparable economies. "This therefore remains a matter of grave concern, and presents an opportunity for closer investigation and debate around the factors that impact on entrepreneurial activityin South Africa," the authors wrote. The report places South Africa 29th on the list of 54 countries surveyed, with a "negligible" increase from 20th position with 6.3% total entrepreneurial activity in 2006, when only 37 countries were surveyed.

The IDC's R1-billion Transformation and Entrepreneurship Scheme announced in 2008 is one of the measures that has been put in place to help drive greater entrepreneurial activity. This money was spread across the Women's Entrepreneurial Fund (R300-million), the Equity Contribution Fund (R150-million) the People with Disabilities Fund (R50-million) and also bolstered the IDC Development Fund for Workers (R250-million) and the IDC Foundation Fund for Communities (R150-million). sustainable economic development opportunities through the funding and promotion of enterprises and industries with a strong job creation element especially in SME and BEE transactions," the IDC's chief executive, Geoffrey Qhena, said at the time.

"The scheme will develop marginalised entrepreneurs – it is also intended to have strong bias towards black women-owned enterprises." The responsibility for overseeing these funds falls to Meryl Mamathuba, head of the IDC's development funds unit. She says the Women's Entrepreneurial Fund plays a critical role in helping business women who don't have the financial resources to kick-start a viable project or to offer a financial contribution of their own. "This is meant to be a higher risk fund, and the funding has been specifically ring-fenced for that purpose," she says of the gamble that start-up funding can be.

"We are committed to creatingsustainable economic development opportunities through the funding and promotion of enterprises and industries with a strong job creation element especially in SME and BEE transactions," the IDC's chief executive, Geoffrey Qhena, said at the time. "The scheme will develop marginalised entrepreneurs – it is also intended to have strong bias towards black women-owned enterprises." The responsibility for overseeing these funds falls to Meryl Mamathuba, head of the IDC's development funds unit.  

She says the Women's Entrepreneurial Fund plays a critical role in helping business women who don't have the financial resources to kick-start a viable project or to offer a financial contribution of their own. "This is meant to be a higher risk fund, and the funding has been specifically ring-fenced for that purpose," she says of the gamble that start-up funding can be. This is considered a sensible measure, because the GEM Report specifically points out that the survival rate of women-owned enterprises is lower than male-owned enterprises in almost all countries and economic levels.

It is almost impossible to draw a connection between this view and the finding that South African women entrepreneurs show higher internationalisation levels than men. Judging by just a few of the case studies referenced in this supplement, South Africa's women have the ability and willingness to play on the global stage. Statistics, studies and surveys can only paint a theoretical picture – it is up to teams such as the Women Entrepreneurial Fund and emerging women entrepreneurs to grab hold of the opportunities presented in the economy at large and in development funds in particular to provide the practical business applications.

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