Endeavor White Paper 2013: The State of Entrepreneurship in South Africa

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h HEADLINE High-impact entrepreneurs create thriving companies that employ hun- dreds, even thousands of people, and generate millions in wages and revenues. And they have the power to inspire countless others as leading role mod- els. Together, these entrepreneurs hold the key to sustained economic growth in emerging markets. They dream of becoming the next great success story, but having launched in emerging coun- tries, they frequently face considerable barriers to growth. In South Africa, four of these barriers are: • Not being able to access smart capital • Not being able to access a slice of the procurement pie • Inadequate infrastructure • A lack of networks and mentors All four of these barriers are under- pinned by the current structure of the South African economy, which has been shaped by the history of the country. While we have a population of 52 million, the economically active portion of the population is very small. As businesses grew and developed, the existing con- glomerates – some would say, accidents of history – built themselves up to posi- tions of great dominance and power. The introduction of competition legisla- tion will, to some extent, weaken this dominance and create more space for entrepreneurs. But for now, they remain extremely powerful. The new BBBEE Codes of Practice should also go a long way towards creating a platform that is more conducive to the development of high-impact enterprises – particularly in the procurement space. But this will undoubtedly take time. If they are to benefit from the above, entrepreneurs need is to understand the money system, their ability to access the money system and their accountability to the money system. It is currently relatively easy for high-impact entrepre- neurs to access smart capital but they are being held back by a lack of under- standing of the environment in which they operate. It is therefore important for entrepreneurs to define their environ- PANEL 6

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