SA’s education system killing off entrepreneurship
Report reveals South Africans’ ‘entrepreneurial intention’ lags way behind African peers
For a country that has produced companies such as Bidvest, African Rainbow Minerals and Discovery, it’s hard to imagine entrepreneurship in SA is falling behind its African counterparts.
Yet this seems to be the case. The latest South African Global Entrepreneurship Monitor (GEM) report found that only 10.1% of South Africans of working age intend starting their own business in the next three years, compared to 41.6% in the other African countries that were surveyed.
Even more disconcerting is that this rate of "entrepreneurial intention" has been declining in SA over the past few years. In 2013 it stood at 15.4%, while in 2010, it was 19.6%.
This is a deeply troubling statistic in a country that desperately needs a vibrant small business sector to reignite its economy. Research in many other developing countries has shown that small and medium-sized enterprises can have a significant effect on reducing unemployment and driving growth.
But in SA, a declining number of people believe they are capable of becoming entrepreneurs. In 2015, the GEM found that 45.4% of working-age adults believed they had the knowledge and skill to start their own firms. In 2016, that fell to 37.9%. In the other African economies surveyed, it is 58.6%.
There may be several reasons for this, but there is no question that one of the most important is education. Experts interviewed for the GEM survey over the past 15 years have consistently rated education and training as one of the three most significant factors constraining entrepreneurship in SA.
One of the broad criticisms of SA’s schooling system is that it is failing to prepare pupils for meaningful participation in the economy. Although entrepreneurship is meant to be a part of the secondary school curriculum, it is taught neither widely nor effectively.
This remains a missed opportunity as there is evidence that if entrepreneurship training were offered effectively at schools, school leavers would be far better prepared for the transition into the labour market. They would also feel more confident about identifying business opportunities and starting their own companies.
SA will never tackle its youth unemployment of more than 65% by hoping enough jobs will be created by companies that already exist. A number of these youths need to be given the means to start their own businesses and become self-sufficient.
However, the problems in primary and secondary school education go far beyond just the quality of entrepreneurship training. The majority of the youth will not access higher education and are therefore dependent on whatever skills and knowledge they acquire during their school years.
The system is so dysfunctional that many school leavers are untrainable.
As one expert contributor to the GEM study noted: "The main outcome of outcomes-based education has been to create a new lost generation of young people who are not simply unemployed, but unemployable.
"Boosting self-esteem at the expense of, rather than in tandem with, the development of a strong foundation of transferable skills is no preparation for the economic realities of the South African workplace."
The latest version of the Global Competitiveness Report ranks SA’s inadequately educated workforce as the third most problematic factor for doing business in the country
The products of this system are ill-equipped to start and grow a business. They are not given the foundation they need to play a meaningful role in the economy.
Informal training provided by nongovernmental organisations or social enterprise initiatives might go some way towards filling this gap, but only reform of the entire school system can create a broad and lasting solution.
At a higher education level, entrepreneurial training also remains insufficient.
The GEM survey found the quality of preparation for starting up and growing new companies provided by colleges and universities has declined from 2016 and is now below the average of the other African countries surveyed.
SA needs to take heed of these findings and those of the Global Competitiveness Report (compiled by the World Economic Forum) that point to how poor education levels are impeding the country’s economic development.
The latest version of the Global Competitiveness Report ranks SA’s inadequately educated workforce as the third most problematic factor for doing business in the country.
In the context of a changing world that is entering the fourth industrial revolution, this is critical. At every level of schooling, the education system needs to teach competencies that are relevant to the modern economy.
Even lower-skilled jobs increasingly require people to be able to work in a complex, digital environment for which we should be preparing school leavers.
Change is happening so quickly we don’t even know what jobs or business opportunities will exist in 10 or 20 years. The education system therefore needs to equip young people with skills and knowledge that will allow them to be flexible, adapt to new demands and take advantage of the opportunities that will arise for disruption across all kinds of industries.
That means preparing them to think critically, solve problems and take advantage of new technologies. It means greater use of information and communication technologies as teaching tools and as a central part of the curriculum.
Most important, it means encouraging entrepreneurial thinking that sees the challenges facing society and the economy and the opportunities that exist in solving them.
• Herrington is executive director of the Global Entrepreneurship Monitor and co-author of the SA report.