Entrepreneurs: A new mind-set needed
While there are fears that employment equity provisions may be stifling the emergence of black entrepreneurs, schools are also battling to teach business-startup skills
Amiena Hartley (31) runs two hair salons. But eight years ago, after completing a six-month entrepreneurship programme, she wasn’t sure what she wanted to do.
"I had no experience in hair. I wasn’t even sure I wanted to be a hairdresser," she says.
Instead of starting a business right after graduating from the Raymond Ackerman Academy of Entrepreneurial Development in Cape Town, she opted to first gain experience in the sector while doing a three-year hair-care course.
In 2015, after undergoing a year-long incubation programme run by the academy, she used her own funds to buy a salon where she had been working and formed her Hair Corp brand. Last year she tapped a R50,000 grant from the National Youth Development Agency to buy a second salon.
Hartley is one of relatively few young people who have ventured into business in SA. The 2015/2016 Global Entrepreneurship Monitor report for SA shows 10.9% of adults aged 25-34 (and 6.3% of those aged 18-24) were involved in starting a business in 2015, against the Africa average of 15% and 24%.
Only between 10% and 20% of young people who attend entrepreneurship programmes now run a business. Of the 296 graduates who have passed through the Allan Gray Orbis Foundation’s bursary programme since its inception in 2005, just 44 (15%) have become entrepreneurs.
Fredell Jacobs, head of impact assurance at the foundation, says for some participants the social circumstances that sometimes come with family obligations, and the risk of no income if the business fails to take off, can act as disincentives.
Employment equity and the resulting growth in demand for black talent at corporates also play a role in why so few of the participants — many of whom are black — start a business.
But he says the foundation takes a long-term approach. Young people are encouraged to get work experience and build up capital and contacts before venturing into business. The cultivation of an entrepreneurial mind-set is the key.
At Cape Town-based Tsiba college, which runs a three-year entrepreneurship programme, only about 10% of the 1,000 young graduates since the programme began in 2005 are today running businesses.
While the R55,000/year tuition cost for each student is largely covered by donor funding, Tsiba head of international partnerships Peter Kraan says donors don’t see this as wasted money.
Raymond Ackerman Academy director Elli Yannikaris believes the need to build confidence in one’s ability to launch an enterprise is key to understanding why just 18% of the 550 alumni who have passed through the academy’s six-month programme since 2005 have started a business.
Efforts to get more learners at schools interested in entrepreneurship have not proved easy.
The Small Enterprise Development Agency (Seda) has run a schools entrepreneurship programme and competition with the department of basic education since 2006.
Since 2011 a total of 295 teachers and 21,143 learners from 180 schools have passed through the programme.
Seda spokesman Boy Ndala says, however, that teachers often view the programme as additional work.
Seda is also seeking to help graduates start their own businesses through an 18-month programme at selected technical and vocational education and training colleges. The programme involves four rapid incubators and theoretical training through 10 centres for entrepreneurship.
More than 800 graduates have been assisted and the agency has helped to set up more than 40 businesses, creating 80-plus jobs. Ndala says it is too early to assess the impact of the programme: the incubators were launched only last year.
Changing mind-sets is not easy, says Primestars Marketing MD Martin Sweet. Four years ago he initiated the "Step Up 2 a Start Up" programme.
The initiative uses cinemas and a competition to get disadvantaged youth interested in addressing problems in their communities.
Last year 16,000 learners from grades nine to 12 (in more than 300 schools) took part, while 500 went on to enter the business idea competition where there was R1.6m in prize money.
Sweet says the programme, using R4m raised last year from sponsors, has helped make learners curious and adept at problem-solving. However, he adds that it’s difficult to create an entrepreneurial culture where none exists.