Growing entrepreneurs

Professor Narend Baijnath, chief executive of the Council on Higher Education. (Photos: VUT)

Professor Narend Baijnath, chief executive of the Council on Higher Education. (Photos: VUT)

To effectively foster entrepreneurship requires more than teaching students how to become entrepreneur the focus should be on creating an entrepreneurial culture that starts much earlier than at higher education level. 

This sentiment emerged during a panel discussion last week at the second national Higher Education Summit themed: Transforming Higher Education for a Transformed South Africa in a 21st Century World. 

Professor Narend Baijnath, chief executive of the Council on Higher Education (CHE), speaking on “Entrepreneurship for Development: Cultivating, Enabling and Sustaining Conditions”, agreed with the panel, but noted that it was still key to create an entrepreneurial culture in higher education institutions.

He said that even though considerable progress had been made with transformation, much remained to be done: “The difficult geopolitical and economic landscape presents new challenges, often disrupting our fundamental assumptions, premises and goals for development. There is still a skewed legacy that needs to be addressed with greater economic growth to establish a more inclusive society.” 

Decelerated economic growth over the past couple of years, slowing to just 1.5% in 2014, rendered growth as a redistributive strategy all but ineffectual, he said. Coupled with the World Bank’s 2015 figures showing that the top decile of South Africa’s population account for 58% of the country’s income, while the bottom decile accounted for only 0.5%, and the bottom half less than 8%, economic growth was even more aggravated. 

“The lowered International Monetary Fund’s (IMF’s) economic growth forecast for South Africa of 0.4 percentage points to 2.3% for 2015, suggests that a sustainability of the country’s economy is under severe pressure,” said Baijnath.

What is the answer to this gloomy forecast and how can higher education institutions avert the growth crisis? 

Entrepreneurship and social innovation, he said, were vital to unlock growth and promote economic inclusion. “The importance of promoting and sustaining entrepreneurship is an integral part of the National Development Plan’s aims to bring about faster economic growth and job creation in order to achieve prosperity and equity. It emphasises the close link between capabilities, opportunities and employment and their impact on social and living conditions.”

He noted that work on addressing the looming crisis had already begun, saying that the National Planning Commission had already started making numerous policy and structural developments. “For example, there is the department of trade and industry’s Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises (2008) in order to promote entrepreneurship, build capacity as well as to foster entrepreneurial thinking starting at the educational level.” 

Baijnath also feared that our Post-Secondary Education and Training system was largely preoccupied with producing graduates who would be looking for jobs rather than creating jobs. He said it was also sad to see that the percentage of South Africans involved in entrepreneurial activity had dropped by 34% since 2013 and that the country performed below other ??similar, efficiency-driven economies in Brics (Brazil, Russia, India, China and South Africa) — according to the Global Entrepreneur Monitor (GEM) Country Report (2014) — where the average early-stage entrepreneurial activity rate increased by 14% over the last three years.

He said: “The GEM report attributed this to a low level of overall education and training, social factors that do not promote entrepreneurship as a career path of choice, lack of access to finance, lack of sector-specific expertise and a difficult regulatory environment in South Africa.

“What is required is a fundamental change in how we as South Africans perceive, think of, and behave in terms of entrepreneurship, its functions and how it relates to the economy.”

In a nutshell, he explained that although traditional entrepreneurship empowered and promoted growth, a more innovative approach and finding new methods of establishing socioeconomic value was required.

“Entrepreneurship is one of the cornerstones of a competitive, modern, knowledge-based economy,” he continued.

He said he believed that this should drive universities, policymakers and government departments to work together to identify and foster the conditions that urged people to start new businesses. “It should impel us to remove barriers to entry for new SMMEs and to distill the elements of a healthy entrepreneurial ecosystem so that they become the cornerstones of policy, programmes, funding, and human development and create an enabling environment.”

Creating a strong, supportive and sustainable entrepreneurial ecosystem for innovative entrepreneurship, he said, required a multi-pronged approach central to which must be partnerships and co-operation between government, business and higher education institutions.

The role of higher education

Higher education, especially Universities of Technology (UOTs), according to Baijnath, was regarded as the custodian of knowledge in society and played a vital role in economic development. 

“There has been an increasing recognition of the role of higher education in fostering development and playing a crucial role in the context of the knowledge economy and the establishment of entrepreneurship universities. Central to this concept is the production of applied and basic research, often in a partnership with industry or communities, and the transfer of new knowledge to communities or to business for commercial purposes,” he said.

UOTs, he said, must saturate entrepreneurship throughout — from strategic thinking and actions through to the curriculum, and to how teaching and learning are conceived, in order to become entrepreneurial. “Graduates from these universities will stand out for their entrepreneurial skills, their development-orientated values, aliveness to opportunities and solutions, and their innovativeness.” 

There are many possible roles that universities can play, according to Baijnath, such as playing a catalytic role by creating awareness of entrepreneurship as a career option and being job creators instead of job seekers. Another role, according to him is that of knowledge production. “The creation of a strong knowledge base for entrepreneurship through research, programme development and the dissemination of information is another role universities can play.

Fostering?a?culture?of entrepreneurship

“Developing entrepreneurs is often focused on the provision of opportunities and facilities rather than the inspiration and motivation that is necessary for individuals to move from ideas to action. Creating widespread awareness among staff and students of the importance of developing a range of entrepreneurial abilities and skills is a therefore a critical culture-change imperative,” said Baijnath.

To develop an entrepreneurial culture in an institution, strong leadership and good governance are crucial factors to consider, and entrepreneurship should be embedded in the strategy and not simply be included in its mission statement. “It needs to find demonstrable expression in action,” he said. 

“The development of an ‘entrepreneurial university’ follows from generating entrepreneurial competencies, strengthening co-operation between various stakeholders, and recognising the role of the university in driving regional, social and community development. 

“Collaboration with external agencies and stakeholders is a vital component of creating an entrepreneurial culture,” he explained. “Synergistic partnerships between industry, community, higher education institutions (HEIs) and government need to be enabled in order to draw on and leverage each partner’s expertise and strength.”

For Baijnath it is important that these partnerships develop, evolve and grow in an encouraging policy environment, and he urged HEIs to put systems in place that allow for the cross-fertilisation of knowledge and ideas, and that support a flow of people and knowledge in both directions. 

Entrepreneurship education

“The education of innovative entrepreneurs should be designed in a way that avoids reliance on the replication of out-of-the-box, standardised, traditional business perspectives.” Baijnath said this impedes the development of creative thinking and behaviour necessary for innovation. “Exposure to relevant, intentionally-designed curricula is vital for the teaching and learning of innovative entrepreneurial skills. There should be a shift from transmission models of teaching (‘learning about’) to experiential learning.”

He also said that quality partnerships are vital, in which Work Integrated Learning could play an important role in helping students to plan, initiate and navigate challenging careers where conceptual, adaptive, personal, technical and vocational skills are needed. 

“If our aspirations are persistent and if we marshal our collective efforts in the ways that are clearly possible, we will design effective entrepreneurship programmes which empower students to create their own futures; generate their own wealth; construct their own sense of pride and self-worth; and most importantly, become job ‘creators’ instead of job seekers. They will become empowered to transform business, markets, communities and our economy,” he concluded.