Entrepreneurship: The key to financial stability for youth | By: Lethabo Tloubata

Entrepreneurship: The key to financial stability for youth | By: Lethabo Tloubata

IMG_0565 2In 2017, unemployment rates in South Africa are reported at an all-time high, which, coupled with the start of a recession, makes the prospects for young people making a successful living seem impossible. Although corporate South Africa is doing its best to retain its talent at this stage, we need to consider a sustainable way to further develop the economy of the country. The best way thought possible is through the participation of more young people in entrepreneurial activities, however, one may not know what opportunities are there for them in the entrepreneurship space.

With the findings in the GEDI report earlier this year, South Africa was placed second in the continent in Entrepreneurship activity. What this alludes to is that the future is not so bleak.

Let’s take a closer look some of the opportunities that are available for the entrepreneurial at heart.

  1. Skills training for youth in entrepreneurship

Having a natural knack for business is one thing, however, running a successful business requires one to have some knowledge of their customer base, how to recruit and retain the best Talent as well as how to manage financial resources that they may have, amongst other skills. South Africa (and the continent) has seen an increase in programmes that offer basic skills that one may need to run a successful business. These skills-based programmes all have a strong focus on mentorship while running structured programmes that help entrepreneurs take their ideas from one phase to the next.

  1. Funding sources

Banks, angel investors & venture capitalists have been, for a long time, the natural source of funding for ventures. Though these sources are widely and readily available to people who wish to push their ideas to the next stage, it is not easy to get access to them as they often either have hectic requirements to qualify for funding or they may have a specific focus on who they fund, such as tech-based businesses.

Although the above-mentioned are still a great source of funding for entrepreneurs, we have, in the last couple of years seen a growth in crowdfunding sources which enable the entrepreneur to not only get funding from a bigger pool of sources, but to also promote their businesses and share a bit of their story and what influenced their decision to begin their venture. Crowdfunding allows one to request funding from friends, family and anonymous individuals who would identify with the inefficiency that the entrepreneur is hoping to find a solution for.

  1. Further Education & Training

Following the successes that have been seen since the inception of a National Diploma in Small Business Management at some Universities of Technology, more and more universities have included entrepreneurship studies in some form or another in their faculty offerings. These offerings range from either a National Diploma in Entrepreneurship, (which not only gives one the theoretical knowledge behind entrepreneurship but also includes a practical component which enables the student to experience the everyday life of entrepreneurship), to postgraduate diplomas in Entrepreneurship with a similar focus to the National Diploma.

While these are some resources one could use to run a successful entrepreneurial venture, it is important to know that this is not all that is out there. Innovation labs, hubs & other communities are also great resources to help grow your business.

As an entrepreneur, it is very important to explore your environment and see what and who else is there to support the growth of your business. Social network platforms, like Instagram, are being widely used to run online shops. While this does not take away from the traditional eCommerce platforms, it is there to enhance your business.

Here are some links for you to look at when exploring these opportunities that are available to you. You are also encouraged to explore further than this and make the most of the opportunities available to you.

 

 

 

 

Benefits of an Engaged Community | By: Teri Richter

Benefits of an Engaged Community | By: Teri Richter

A key outcome in the Allan Gray Orbis Foundation is the importance of creating a valued community for Allan Gray Beneficiaries. This is applicable to all three streams of the Foundation and is experienced slightly differently in the Scholarship, Fellowship and Association.

The value of communityAGO(16.04.24) 31

The Foundation understands that to achieve greatness individuals must work together and learn from one another. It is with this purpose that the Foundation spends much time and emphasis on the need to create a strong and supportive community in which Allan Gray Beneficiaries can seek guidance, learning, collaboration and inspiration.

Beginning a business venture can be an isolating task. The Foundation aims to encourage collaboration and thought partnership within our beneficiary community through meaningful engagement.

The Allan Gray Orbis Foundation Community

At its core, the Foundation community aims to create a support system to beneficiaries to encourage their success academically, personally and entrepreneurially. The Foundation’s approach to community is facilitated differently in each programme.

Intended benefits

At Scholarship level the Foundation community aims to create a strong support network to ensure that Scholars can flourish in their new school environments and are able to begin challenging their own as well as fellow Scholars thinking. The Foundation ensures that Scholars have personal relationships with Foundation Programme Officers, fellow Scholars and Candidate Fellows as well as teachers from Allan Gray Placement Schools.

Within the Fellowship, the Foundation community aims to remain a space that fosters beneficiary support, yet also begins to extend the network of beneficiaries through linking Fellows from the Alumni programme as well as business mentors. At this level, the community begins to centre around network development and thought partnership. Candidate Fellows are encouraged to challenge each other’s thinking and thereby learn from each other.

At Association level, the Foundation community aims to provide a thinking space for Fellows to test their business ideas, learn from each other’s mistakes and seek opportunities for collaboration.

The image below depicts key outcomes from community engagement for beneficiaries at different stages and demonstrates how the Foundation builds and develop the value beneficiaries extract and contribute over the three programme phases. The initial phases of community building are centred on providing resources, support systems and access to like-minded individuals who inspire each other. This foundation is built on by developing a strong focus on network building and thought partnerships, which culminates in collaboration and business development at Association level.

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Actual benefits

Beneficiaries describe the benefits they experience from their engagement with the Allan Gray Orbis Foundation Community including support, engagement and thought partnership with peers as well as the encouragement and inspiration they get from each other:

“The best thing about the Fellowship was the people and the support. I felt that I had someone who constantly believed in me, and through the Candidate Fellows I was able to get assistance and support that I needed at times.” Year Engage Candidate Fellows, Western Cape, University of Cape Town

“These are the people you can take an idea to and they will give you constructive feedback” 2011 Fellows

AGO(16.04.24) 11You are amongst a pack of really ambitious and emerging entrepreneurs but at the same time finding people in the pack who are at a similar place to you where it’s fine to go into corporate and sharpen your blade and understand how the world works so that you can emerge at the end of it with some understanding of how your impact can be felt in the world.” 2011 Fellows

“What the Foundation has done this year, or something I haven’t realised is that they are providing a network and I never like grasped that until I went to the Jamboree and Candidate Fellows were all talking about how they collaborated with each other”. Grade 11 Scholar, Western Cape

Recommendations for building communities from the Allan Gray Beneficiaries

Over the years, the Allan Gray Scholars, Candidate Fellows and Fellows have contributed valuable suggestions on improving community engagement and enhancing the experience within the community. These suggestions include:

  1. Ensuring diverse engagement across beneficiaries: Beneficiaries note that engagement across year groups and programmes, ensuring that new and more seasoned beneficiaries, as well as younger and older beneficiaries can get to know each other and share experiences and learning, increases the value gained from the community.
  2. Facilitating peer mentorship: Introducing systems where Candidate Fellows can mentor Scholars, Fellows can mentor Candidate Fellows and the like ensures that beneficiaries can learn from each other and form deep and meaningful relationships.
  3. Developing diverse engagement platforms: As physical engagement becomes increasingly challenging particularly among our working beneficiaries, Fellows suggested the introduction of live streamed networking events which connect beneficiaries across cities, provinces and countries.
  4. Building lasting connections through genuine relationships: Fellows suggest that the individuals they have had the strongest connections with are those that they have met in less formal contexts and where relationships have could develop naturally. This leads to the suggestion to facilitate networking through casual social events where the pressure to connect for entrepreneurial gain is not the focus of the event.
  5. Attracting beneficiary attendance through interesting and relevant content: Fellows have noted that they are most likely to attend community events when the topic of the event is applicable to their entrepreneurial ventures.

In the spirit of collaborative achievement, we feel the greatest stride towards successfully reaching the Foundation goal of creating high impact entrepreneurial ventures is as a community. In this pursuit of entrepreneurship, our experience suggests that participating in a community that provides resources, support, knowledge, inspiration and collaborative partners makes the journey not only less isolating but more impactful.

2017 – The Year for South African Entrepreneurship

2017 – The Year for South African Entrepreneurship

Not all opportunities are created equal and some are able to have a disproportionate impact on a country’s future trajectory. In our own nation who would have believed that sporting events such as winning the world cup rugby combined with Madiba’s wearing of the No. 6 jersey could give such impetus to nation building, followed years later by the national pride that emerged from the successful hosting of the Soccer World Cup. Or in the entrepreneurial world, where Colombia’s transformation from a lost country filled with drug lord’s, murder and violence into a thriving, peaceful country, bursting with innovation and enterprise, was confirmed with the hosting of the 2016 Global Entrepreneurship Congress in Medellin.

2017 is such a moment for South Africa, as we host the 2017 Global Entrepreneurship Congress in Johannesburg from 13th to 16th March. It has become the Olympics of Global Entrepreneurship and it will be coming to Africa in less than two months’ time.   The eyes of the global entrepreneurship community will be on South Africa and we can use this as a powerful opportunity to change the perception of our national and continental entrepreneurial potential. If we doubt the impact of these type of events, we can interestingly draw encouragement from the Olympics itself. So what then is the link between the Olympics and entrepreneurship?

The answer is the island of Jamaica and the lesson for the emergence of South Africa’s entrepreneurial potential contained in the sprinting dominance of this small island. This nation’s athletic performance is staggering, as an article in the New York times identifies, “Among the most enigmatic features of Jamaica, an island of only 2.8 million people, is its astonishing supremacy in running. Currently, the world’s fastest man and woman are both Jamaicans. Nineteen of the 26 fastest times ever recorded in 100 meter races were by Jamaicans.” How is this possible.  It can’t be a matter of genetics as many Jamaicans ancestors are from West Africa which has few exceptional sprinters. How can a nation smaller than the city of Cape Town so consistently and comprehensively dominate a global sport?

champs-aerial-jamaicaA major reason is that in Jamaica sprinters are identified early and then very intentionally developed in a supportive culture.  Only in Jamaica is a high school track and field meeting attended by 30,000 people including the superstars such as Usain Bolt and considered by some margin the premier sporting event in the country. Champs, or the Inter-Secondary Schools Sports Association Boys and Gils Athletics Championships is evidence of how passionate and intentional this nation is about running talent – and the final results speak for themselves.

This insight into Jamaica’s success encourages the Foundation, because just as with running, if we are consistently able to identify entrepreneurial talent early and intentionally develop it, supported by a culture that drives such aspiration, we will reap great entrepreneurship results. So let’s make sure that GEC 2017 is an entrepreneurial Champs for this country and the catalyst for an enduring dedication and passion for fostering entrepreneurial spirit.

The Foundation will continue its own effort to consistently support such an entrepreneurial culture with our commitment every year to find the most entrepreneurial young individuals we can find across every last corner of the country and to bring them into an intentional system of now some 800 individuals to develop that ability for as long as it takes to bring home those entrepreneurial gold medals.  The Foundation’s Allan Gray Fellowship campaign opens on Monday 23rd January.

So let’s take hold of the opportunity provided by GEC 2017 and make 2017 a significant year in our entrepreneurial history. That people would record in due course that it was the year that brought us closer to realising the potential for enterprise to be a force for the common good, to be an engine of responsible growth, driving down the levels of unemployment and inequality in this nation.

What would you like to hear about in 2017 on the Foundation blog – let us know in the comments below or you can respond directly to stratcomservices@allangrayorbis.org

How to add R2.5 trillion to the South African economy – why in entrepreneurship quality matters more than quantity.

How to add R2.5 trillion to the South African economy – why in entrepreneurship quality matters more than quantity.

screen-shot-2016-11-29-at-8-32-56-amAs South Africa looks to harness the full economic potential of entrepreneurship, it is easy to fall into the seemingly logical thinking that more is better. We often hear the rallying cry: “We need more entrepreneurs!” But the answer is not as simple as it might appear, because when it comes to entrepreneurship quality matters more than quantity. If it was only about more being better, then the most entrepreneurial country in the world would be Senegal (with nearly 40% of the country involved in entrepreneurship).  Yet it is a country ranked 163rd on the Human Development Index.

Why is there a problem with focusing on quantity? The answer is given by Zoltan Acs, author of the Global Entrepreneurship Index (GEI) and one of the most widely published academics on entrepreneurship in the world, where he states “contrary to popular belief, the most entrepreneurial countries in the world are not those that have the most entrepreneurs. In entrepreneurship, quality matters more than quantity. To be entrepreneurial, a country needs to have the best entrepreneurs, not necessarily the most”

This differentiation between quantity and quantity explains why there are often such contrasting outcomes between two of the most established global measures of entrepreneurship, the GEI Report and the Global Entrepreneurship Monitor (GEM) Report.  In simplified terms GEM is more focused on quantity while GEI focusses on quality.

So it was interesting to note, in the midst of all the entrepreneurial activity recently during Global Entrepreneurship Week, the launch of the 2017 Global Entrepreneurship Index (GEI).  It again highlighted the difference for our understanding of South African entrepreneurship depending on whether we think in terms of quality or quantity.

In the 2017 GEI the picture of South African entrepreneurship is shown in a far more positive light (ranked 55 out of 137 globally) than suggested by the measures contained in the Global Entrepreneurship Monitor (GEM) – a report that suggests South Africa is one of the worst countries on the continent when it comes to entrepreneurship.

In the main GEM measure known as TEA (Total Entrepreneurship Activity rate), South Africa fluctuates between 7% to10% of the adult population involved in entrepreneurship, which is about two thirds of the efficiency driven economy (our country classification) average and about half of the African continent average.  And yet in the GEI report South Africa is placed second in Africa and is in the top 40% of the world’s economies.

These conflicting report outcomes are best explained by understanding the distinction between entrepreneurs that are necessity driven versus those that are opportunity driven.  Necessity driven entrepreneurs are those that pursue entrepreneurship out of necessity – they have no other option in the economy for making money. Opportunity driven entrepreneurs are those that are pursuing an opportunity. These are the entrepreneurs that generate productive economic success, that grow and create jobs. The GEM TEA rate in measuring quantity, captures an increasing proportion of necessity entrepreneurs with higher TEA rate levels. In effect it becomes a measure of self-employment rather than economically productive entrepreneurship.  This is evidenced by the fact that the TEA rate is negatively correlated with economic growth, economic freedom and global competitiveness. In contrast, the GEI focusses on innovative, growth orientated, opportunity entrepreneurs and is positively correlated with these measures – the fruits of pursuing quality rather than quantity.

There is a significant economic implication in better understanding the distinction between quantity and quality.  In the 2017 GEI Report, GEI is plotted against GDP as per the figure below.screen-shot-2016-11-29-at-9-13-49-am

This shows a clear positive relationship between GDP and GEI and a correlation of 0.62. The relationship suggests that improvements to GDP could be effected by changes that improve GEI scores. Specifically, if South Africa were to raise its GEI score by 10% it could add an incredible R2.5 trillion to our economy.  It is time to end the confusion, to focus on entrepreneurial quality, to ignite our best and brightest with entrepreneurial passion and achieve this 10% GEI shift. Now that is a target worthy of pursuit and importantly it would finally move us out from under the shadow of entrepreneurial negativity generated by too much focus on GEM reports.

 

 

The Allan Gray Orbis Foundation contributes to the GEC+  Glocal Entrepreneurship Education

The Allan Gray Orbis Foundation contributes to the GEC+ Glocal Entrepreneurship Education

GEC+-PostThe GEC+ in Daegu, South Korea the City of Hope also referred to as “Colourful Daegu” hosted an international audience of entrepreneurship education experts, practitioners, policy makers and academia. The theme “Glocal” was designed to illustrate the power of collaboration between global and local ecosystems and the focus was to strengthen capacity for entrepreneurship education in all GERN member countries.

 

The GEC+ coincided with the Creative Economy Festival in Seoul where President Park Geun-hye checked in on the progress of the strategy outlined in her 2013 inauguration speech to make the creative economy a key priority for her government. Daegu represents the pinnacle of this strategy in action, deliberately positioning itself as a knowledge economy through active support for convergence between arts, culture, digital and environmental industries. A vibrant city with a rich cultural heritage bustling with innovation and creativity and judging by all the urban construction, also a growing city.

The Allan Gray Orbis Foundation was invited to contribute to the opening panel “Entrepreneurship Education” where our CEO, Anthony Farr joined Anders Rasmussen, representing the Danish Foundation – Young Enterprise and  Phil Yun-Sock Lee from the Korea Entrepreneurship Foundation. This panel, under the moderation of Prof Byunjoon Yoo from Seoul National University, focused on the importance of entrepreneurship education as a key component for future economic growth and development. The participants looked at entrepreneurship education beyond the realms of just starting and running a business and explored how an entrepreneurial approach to solving problems is useful for socio-economic advancement. The panel advanced the idea that the cultivation of an entrepreneurial mindset as a learning discipline installed in education has the potential to reach a much wider audience. When this happen the impact can be profound, as we’ve come to witness in the story of Israel’s economic miracle, Startup Nation. The Foundation was able to share our learning from a decade of cultivating entrepreneurship, explore what makes us successful and shine the spotlight on the achievements of our Fellows.

Our participation extended beyond the opening panel with a Round Table discussion on “Measuring the Impact of Entrepreneurship Education”, moderated by our CEO. Here I was afforded the opportunity to join an esteemed panel which included the Secretary General of the Korea Entrepreneurship Foundation, Gi-Hyun Kum, Anders Rasmussen and Prof Johannes Lindner who leads the Initiative for Teaching Entrepreneurship in Austria. Mr Kum pointed out that entrepreneurship will be installed as a compulsory subject in the Korean school curriculum in 2018 and measuring impact is an important consideration. Defining impact for the Foundation was relatively easy to articulate as our long term goals clearly capture the impact we want to achieve, a R1bn company every two years, 50 000 meaningful jobs by 2030, and 500 enterprises. These goals offer direct evidence of the economic impact we want to achieve and also serve as a guideline for how we track progress and evaluate our success.

The GEC+ also exposed us to a rich learning environment with many examples of best practice in entrepreneurship education as well as ecosystem development. It was very satisfying to see that experiential learning and gamification are well entrenched in entrepreneurship education methods of many other countries. Similarly, the key message from most entrepreneurship ecosystem practitioners was that collaboration between government, private sector and academia is essential to build sustainability and scale. In addition to this, most presenters and contributors stressed the significance of “glocal”, local relevance and global reach. Local relevance takes advantage of local human, environmental and economic capital while global relationships focus on markets and skills transfer that will contribute to the growth of the local ecosystem. One point that stood out is the requirement for patience especially when it comes to building relationships with policy makers, getting government support and private sector buy-in. This resonates very well with our long term focus as a Foundation and encourage us to see things through despite temporary setbacks and to be relentless in pursuit of our long term goals.

We left Daegu on a very high note, our presence on this stage serving as acknowledgement that our work is admired and respected by those who pursue the same goals that we do when it comes to cultivating entrepreneurship. The GERN community is excited to support our deep dive into entrepreneurship mindset and there is significant evidence that our programme interventions are not far from what is happening on the frontier of entrepreneurship education.

 

Challenges for Female Entrepreneurs  (Part I) by Margie Worthington-Smith

Challenges for Female Entrepreneurs (Part I) by Margie Worthington-Smith

The fact that we still make a distinction between entrepreneurs and female entrepreneurs is a striking sign of how little progress the world has made. If the world were a truly equal place there would be no reason to make such a distinction.  Some of the factors that conspire to make us perpetuate such inequality are obvious but there are also not-so-obvious ones.

To start, let’s look to the outliers – those women who have been able to  “lean in” and be accepted on merit as successful.  Sheryl Sandberg, COO of Facebook had this to say about equality:

“A truly equal world would be one where women ran half our countries and companies and men ran half our homes. I believe that this would be a better world. The laws of economics and many studies of diversity tell us that if we tapped the entire pool of human resources and talent, our collective performance would improve.

Legendary investor Warren Buffett has stated generously that one of the reasons for his great success was that he was competing with only half of the population. The Warren Buffetts of my generation are still largely enjoying this advantage.

When more people get in the race, more records will be broken. And the achievements will extend beyond those individuals to benefit us all … Conditions for all women will improve when there are more women in leadership roles giving strong and powerful voice to their needs and concerns.”

The most obvious factor

Let us now name the most obvious difference between men and women.  Women are equipped to give birth.  Many do and when they do they take on a role that is totally consuming both physically and emotionally over a long period of time.  While men naturally have a role to play in this dynamic it is a fact that this additional responsibility minimally if not rarely influences their work commitments. In contrast, it requires of women to either exit the workplace race (briefly or forever) or participate in it with an additional facet not required by men.

There are many delightful anecdotes by working women of the challenges that they face in the juggling act of home and work.  The practical reality is that many women exit the race because the energy required is overwhelming.  The workplace is not accommodating of mothers and to try to take on leadership responsibilities while rearing children requires compromise one way or the other.  Those women who are able to get to a position of leadership are positioned in the public eye (and more importantly other female eyes) as role models.  Without these role models other women cannot see the possibilities.  However, this leadership very often comes at a cost and certainly takes courage and resilience.

Factors specific to South Africa

How does South Africa match up to the rest of the world in terms of the courage of our women entrepreneurs and what are the factors that are holding us back?

One only has to have scant knowledge of South Africa’s history to know that small a country as we are, we have for a long time punched way above our weight. We have an enviable infrastructure and have unlocked remarkable natural resources making us a serious player in many (particularly mineral and agricultural) exports.

However, a review of that same history will also show that what could be perceived as a major threat – but which is in fact a major opportunity – is the fact that the potential of our human resources remain largely untapped.  The most exciting opportunity created by the miracle of 1994 was the possibility of unlocking this huge unutilised resource – which, combined with the already unlocked natural resources, would put us way up there on many economic and other rankings.

Depressingly, 22 years after political freedom, we remain possibly worse off on this measure than ever before.

A glance at the diagram below shows the glaring deficiencies in South Africa’s human development when we are compared to the rest of the world.  Not surprisingly (due to a disastrously poor education system) startup skills are way below the world average.

Human capital development (as mentioned already) shows up as devastatingly poor and, not surprisingly given the poor previous two factors, the appetite to risk capital on such low level human capital and poor skills is negligible.

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Seen through a more positive lens, South Africa can still unlock its human potential and be an even greater entrepreneurial player.

Courageous Women

Nevertheless, in the three decades of working in the development sector, specifically in job creation and entrepreneurship development, time and again we have found that it is the women who seize the opportunities for skills development.  They are driven by the responsibility to provide for their children and they are the ones who show the grit and determination to succeed.  The South African Institute for Entrepreneurship (SAIE), which has been training and supporting emerging entrepreneurs for 21 years, works primarily with female entrepreneurs.  This year, of the 18 agricultural cooperatives that were assessed and selected for the training, 88% of members were women.  In addition, SAIE ran a SETA-funded New Ventures Creation course in 2016 where 83% of the participants were women.

The Female Entrepreneurial Index (FEI)[1] ranks South Africa at no. 36 in the world ahead of Montenegro and following Uruguay (out of 77 participating nations) with a Global Entrepreneurship Index (GEI)[2] score of 44.2 (the highest being the USA at 82.9 and the lowest being Pakistan at 15.2).

Critical bottlenecks

In examining what the enablers and barriers are to women entrepreneurs – certainly the inequalities of the world and the fact of motherhood are key elements.  However, there are other critical bottlenecks too.  In order for the sweet spot of entrepreneurship to be attained there needs to be an even balance between the abilities and aspirations of the woman and the attitudes of society.

There have been recent studies done that measure the state of entrepreneurship in South Africa.  Besides the annual Global Entrepreneurship Monitor (GEM), the GEI and the FEI as previously mentioned also do the same.  However, the two latter studies include research on three pillars namely Attitude (societies’ attitudes towards entrepreneurship), Ability (entrepreneurs’ characteristics) and Aspirations (quality aspects of startups and new businesses) to identify how well entrepreneurs are faring.

The 2016 GEI information on South Africa’s entrepreneurial status shows that it is strong on product innovation (the aspiration pillar), competition (the ability pillar) and on process innovation (also the aspiration pillar).  Added to that, the FEI indicates that women in South Africa fare well in terms of equal rights, technology absorption and innovation.

For the GEI, the bottlenecks in South Africa are startup skills (attitudes), our human capital (abilities) and our technology absorption (also abilities).  FEI’s research shows that bottlenecks in South Africa for women are technology sector business, internet and networks, a lack of highly educated owners and poor research and development expenditure.

You will notice that although South Africa is rated low by the GEI on technology absorption, the FEI has found that technology absorption for women entrepreneurs is an enabling (institutional) factor.  This paradox would be interesting to unpack in a further, more comprehensive analysis.

So the key positive takeaways from this research are that the country as a whole appears to be relatively strong in its ability to produce new products more cheaply or to adopt or imitate existing products.  It also has proven to be able to create new technology or perhaps apply the latest technology while maintaining its market uniqueness.  Through its sound constitution South Africa has created an environment where women’s equal rights are good with a parity of laws around capacity, property and employment.  The research also found female ICT role models in senior positions and in senior government.  There is a good firm-level technology absorptions capability in the country, which has been found to be one of the strengths of women entrepreneurs.

On the downside, however, the most damning findings confirm what we know and are painfully aware of: the fact that our education system has failed us.  The wonderful opportunity we had 22 years ago to renew and rejuvenate has not been realised. Poor management, vision and will have resulted in massive unemployment, poor skills and as yet still unlocked human potential.

In Part II of this discussion we will look at how a lack of education, specifically startup skills, influence female entrepreneurs.

 

The Next Economy

The Next Economy

“To be truly radical is to make hope possible, rather than despair convincing.” – Raymond Williams

Angela Coetzee, Strategy Communications Manager at the Allan Gray Orbis Foundation, storyteller and passionate believer in social transformation, recently attended the International Architectual Biennale Rotterdam (IABR 2016) through the Stellenbosch University Sustainability Institute Changemaker Programme. She shares some of her reflections emerging from this on the possibilities of the next economy.

We live in a world that is quickly changing, becoming more complex and overrun with challenges. This new world requires a new way of approaching and thinking about challenges. The Allan Gray Orbis Foundation believes that an entrepreneurial mindset can equip us to flourish in this new world.

It is predicted that by 2050 80% of the globe would have urbanised with 90% of wealth created in cities. As a result, an understanding of cities, the challenges and opportunities they present, is vital to cultivating responsible entrepreneurs. The sheer size and density of cities in the future calls into question a range of human and natural systems such as access to water and food, living and work spaces, places of learning and access to opportunity.

The IABR 2016, themed ‘The Next Economy’, connected designers, academics, and thinkers with decision makers, politicians, the private sector and the public with the realities of global cities. It presented more than 60 projects. Together, these projects show a range of possible futures; new housing and working locations, new clean energy systems, new models for area development, and new forms of collaboration, health care, and solidarity. ‘The Next Economy’ investigated the relationship between spatial design and the future development of the economy. The projects exhibited revealed how ordinary people, individuals and communities, are dealing with the social, political and economic challenges that the city presents.

There was an important African presence, celebrating projects of design in reality. The following projects stood out:

africa_ishack2_megan_kingiShack: The iShack Project, based in Ekanini, Stellenbosch, is using solar electricity to demonstrate how green technologies can be used appropriately to incrementally upgrade informal settlements and slums whilst build local enterprising capacity and resilience within a community. Enkanini is an informal settlement of about 6,000 people on the outskirts of Stellenbosch, Western Cape. This community is typical of many similar settlements around South Africa where hundreds of shacks are built in close proximity, with little or no access to clean and safe forms of energy, water or sanitation. The iShack solution did not come from outside of the community, but from within.

28261287Zabaleen: There are 70 000 Zabaleens as Cairo’s informal waste collectors. The word Zabaleen literally means ‘garbage people’. Over the years the Zabaleens have developed an intricate cycle in which about two-thirds of the 15 000 tons of garbage generated daily by Cairo’s 17 million inhabitants is salvaged and recycled. Their relationship with authorities has been tense and under former President Hosni Mubarak, the state contracted international firms to collect waste. This 10-year experiment in privatisation, however, proved inefficient and only served to further marginalize the Zabaleen. Lately, the Zabaleen have begun to organise themselves into formal businesses and the government have started to acknowledge the failure of privatization. The government is starting to formally employ the Zabaleen as waste collectors. This is a great example of how informal and formal economies can integrate in a productive way.

TEVOturtlePeopleSuame Magazine: This is an enormous industrial initiative within Kimasi, Ghana’s second city. It epotimises the ingenuity and resourcefulness of the informal sector. Cargo ships bring thousands of old European cars to Ghana every week, and this is where they are transformed and made fit for Africa’s chaotic cities and potholed roads. The cars and trucks from across West Africa are serviced and repaired in massive agglomeration of shops, factories and open air workshops. Suame Magazine has become an industrial ecosystem of small scale artisanal manufacturing where large volumes of material are being repurposed and recycled.

afrilabsAfrilabs: This is an umbrella organization serving 40 tech hubs that have thrived in 20 different countries across the continent, with an estimated 200 tech hubs in Africa. These hubs are emerging as networks for young African IT workers, commercial startups, entrepreneurs, social investors and innovators to connect, share knowledge and collectively build an African tech ‘ecosystem’. An important catalyst for this movement was initiated by a group of bloggers and programmers in Nairobi in the aftermath of the 2008 electoral crisis, when they created the open source crisis mapping platform, Ushahidi. Afrilabs was established to support the further development of the promising ‘innovation infrastructure’ that is fast spreading across the continent.

These are a few stories that map a new, different story of our present and what can and should be expected in the future. Ordinary people and communities, dealing with the realities of their world and thinking entrepreneurially create ‘The Next Economy’.

An inspired academic and thinker, Vanessa Von Der Heyde shared this insight after her time at the IABR 2016: “The future is ours to imagine and ours to create! Now the real work begins of figuring out what our own roles are in proactively working towards the next, socially inclusive, environmentally beneficial economy”.

 

 

 

(Re-)Designing for Impact

(Re-)Designing for Impact

What elements of design shape our lives? Design is often seen as the mere beautification of the world, but there are in fact five elements of design that determine the functioning of the world we live in:

  • Spatial Design
  • Systems Design
  • Product Design
  • Service Design
  • Communication Design

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Design is a forward looking exercise where we ask – what might be? Design therefore forms part of every element of our lives. How do we then impact the world through entrepreneurial, responsible design? And how can this be done in a way that will bring transformation, justice, dignity, equity and sustainability to various spheres in our country?

A relatively new field of study, biomimicry is starting to answer these questions. Biomimicry can be described as a whole new consciousness, a multidisciplinary approach to design, problem solving and most importantly to adding value.  Biomimicry means to copy life. Contrary to popular belief, it does not only copy the elements of nature, but it turns to the elements of nature to design for function and purpose. This means that we need to reframe our questions. Instead of asking for example ‘how do we build a dam’, we should be asking ‘how do we capture water?’. And why is it that palm trees survive a Tsunami and yet houses are left in a pile of rubble?

Those in the field of biomimicry will say that nothing we create is new, since nature has already found a solution to it. How we apply the learning, the design – that is new.  The deep principles of design that nature provides are the following:

  • Adapt to changing conditions
  • Be locally attuned and responsive
  • Evolve to survive
  • Use life friendly chemistry
  • Be resource efficient
  • Integrate development with growth

The Foundation believes that entrepreneurial mindset can change and impact our context – socially, politically and economically. This is a mindset that can reshape and redesign the world that we live in. We therefore cultivate entrepreneurs by exposing them to a way of thinking which could lead to them potentially redesigning their spaces, systems, products or services. It is this type of questioning that has led to the reimagination of the system of transport (Uber), living (AirBnB), information sharing (Twitter), and most significantly political life (Apartheid).

Challenges we face in the 21st Century require us to rethink the world. We moved from two billion people in 1927 to seven billion in 2011. This alone has a wave of implications to the way we work and live.  According to Frost and Sullivan the top 10 mega trends to watch for in 2025 are as follow. These require design and us applying an entrepreneurial mindset so that we shape a world which honours our children and our future:

  • Urbanization: Mega Cities, Mega Regions, Mega Corridors, Smart Cities
  • Electric-Mobility
  • Social Trends: Geo Socialization, Generation-Y and Reverse Brain Drain
  • SPACE JAM: Congested Satellite Orbits
  • World War 3: Cyber Warfare
  • RoboSlaves
  • Virtual World: Fluid Interfaces and Haptic Technology (The Science of Touch)
  • Innovating to Zero! : Zero Emission Technologies
  • Emerging Transportation Corridors
  • Health, Wellness and Well-Being

If you are working in the field of design or in any of the trends listed above, please share how you have applied design to recreate the life in which we live.

For more on biomimicry, go to Biomimicry South Africa at http://biomimicrysa.co.za

 

 

Opportunities in the local entrepreneurship ecosystem

Opportunities in the local entrepreneurship ecosystem

The generic definition for opportunity references time or a set of circumstances that make it possible to do something. How opportunity is defined is perhaps not as important as what it means, especially for entrepreneurs and even more so in the current economic environment where South Africa’s growth is expected to reached a snail-pace of 0.7% for 2016 with expectations of an acceleration to 1.8% in 2017. The importance then is to focus on what can be done under the current circumstances to take advantage of opportunities to create value and perhaps push the growth rate for 2017 further north of 1.8%. If this is to happen we must take a bet on entrepreneurs for the creation of new industries, new jobs and additional value. This then will evoke an immediate question, where are these opportunities given the dire economic outlook.

My suggestion to bet on entrepreneurs in this trying time is grounded in the way entrepreneurship is defined by Timmons and Spinelli in New venture creation in the 21st century, the prescribed text for many MBA programmes. The definition, “entrepreneurship is a way of thinking, reasoning and acting that is opportunity obsessed, holistic in its approach and leadership balance for the purpose of value creation and capture” puts the obsession with opportunity as a key driver to discover, create and capture value. My optimism for entrepreneurs to step up in this challenging economic environment is grounded in this fact that opportunities for value creation are all around us irrespective of the trend of the economic cycle. This optimism is also fuelled by the fact that we are confronted with many problems and the bigger the problem, the better the opportunity for value extraction and the longevity of a robust business model. In South Africa we’ve got a plethora of problems ranging from basic services such as water and sanitation to general expected norms such as universal internet access. Globally there are 2.4bn people without access to sanitation while 600 million do not have access to clean water and One.org estimates that this is a US$32bn opportunity given that every US$1 investment in water and sanitation produce US$4 of economic benefit. In South Africa we enjoy universal access for water in urban areas, but you do not need to drive too far to observe that sanitation still presents a large opportunity. Internet access presents a similar opportunity with a current penetration rate of 61% by 33.6 million users as reported by Internet World Stats. The internet economy’s contribution to GDP and impact on GDP per capita is well covered in many global studies and reports with clear evidence of opportunity for value creation if one considers that ICT services grew by 30% per year from 2001 – 2013 as reported by the OECD in their 2015 Digital Economy Outlook.  More recently the arrival of ransomware introduced new opportunities in the internet security space with Gartner forecasting US$434bn in spending for 2017 and US$547bn in 2018.

Capturing value from an opportunity then requires a significant focus on getting your timing right. In 2008, Barack Obama got his timing right and took advantage of an opportunity to run for the White House with a political campaign that created youth engagement for first time voters, scientifically crafted social media tactics and good old fashioned knock-on-doors community mobilisation. In the late 1990’s the Levy brothers spotted the opportunity in the prepaid market  that was a result of the rapid growth of mobile subscriber penetration and launched what is today Blue Label Telecoms. One can argue that most of the listings on the JSE post democracy is a result of entrepreneurs who saw opportunity in the new South Africa and they leaped at it with an obsession to create and capture value.

Opportunities in the local ecosystem then are all located where there are problems to be solved and there are problems all around us. In Johannesburg for example we can do with traffic lights that are functional in the rain and if this is perhaps too trivial there are many others, such as affordable urban transport, affordable urban housing, affordable quality education. Sparks schools introduced a very compelling value proposition to the problem of quality affordable education and addressed it with a business model that has allowed it to roll out seven schools in Gauteng since launch in 2013 and facilitate growth into the Western Cape this year.

Our local ecosystem is well geared to support opportunity obsessed individuals who are driven for the purpose of value creation. Apart from the fact that we are faced with many problems that need innovative solutions, access to finance is not that big a constraint anymore if we look at the recent trends in private equity finance and all the additional funding made available through government programmes in support of the Black Industrialist. An entrepreneurial mindset is therefore most fitting to take advantage of opportunities presenting itself despite the current economic climate. As my daughter was reminding me quoting her teacher, “don’t say you can’t before you discover that you can” and discovering opportunities in the current economic environment will require a “can do” attitude.

 

 

 

From Crime to Creativity – Medellin, hosts the 2016 Global Entrepreneurship Congress

From Crime to Creativity – Medellin, hosts the 2016 Global Entrepreneurship Congress

Starting from a small initiative in the United Kingdom in 2007 to promote entrepreneurship through the idea of an entrepreneurship week, that seed has grown into a global movement touching 160 countries across the world, consolidated into a single global entrepreneurship ecosystem known as Global Entrepreneurship Network (“GEN”) with a wide variety of offerings in the areas of support, compete, understand and connect. In each of these fields, GEN is able to harness its global reach to create unique scale and insight for the purpose of accelerating the development of entrepreneurship across the globe.

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The flagship connect event of the year is the Global Entrepreneurship Congress (“GEC”) which on an annual basis gathers key thought leaders, researchers, entrepreneurs and practitioners in one place to move the entrepreneurial agenda forward.  From the 14th to 17th March, the 2016 Congress was hosted at Medellin, Colombia with a total of 6,500 people in attendance. In our capacity as a founding member of the Global Entrepreneurship Research Network (“GERN”) and a member of the Local Organising Committee of the Johannesburg 2017 GEC, the Foundation was there to contribute and pick up on the latest thoughts and developments in the entrepreneurial field.

Fredell Jacobs, participating in the annual GERN meeting
Fredell Jacobs, participating in the annual GERN meeting

But first we must start with Medellin. How did the previous murder capital of the world get to host a Global Entrepreneurship Congress? It has been termed the “Medellin Miracle”.  Through a focus on social transformation, “the point was to bring together a fragmented society and show respect for the most humble,” says Sergio Fajardo, the city’s mayor in 2004-07, and a collaborative approach between business, the municipality, NGOs, unions, universities and even gang members a new future for the city was mapped, resulting in Medellin beating out New York City and Tel Aviv to be announced the most Innovative City in the world in a 2013 global competition, before then going on to win the bid for the “world cup of entrepreneurship” to host the 2016 GEC.  It is a remarkable story of hope and inspiration for all those that believe change is possible. No wonder the city is known by locals as “The city of the Eternal Spring.”

In addition to the power of Medellin’s story the GEC did not disappoint with its gathering of some of the best minds in the entrepreneurial world. Here are five takeaways from the 2016 GEC:

  • Trust is the new differentiator

The opening key note of the congress introduced a new paradigm as to how enterprise should be understood, moving from a simple consumer economy to a relationship economy where trust is the driver. In this new world, “the business of next”, the theme of the congress, values such a generosity and transparency replace scarcity and secrecy.

  • Relationships before transactions

As part of this reimaging the business of next, the importance of relationships comes to the fore. As we move from a transactional understanding to a transformational one, this cannot be achieved without authentic relationships.  It is fascinating to witness how softer issues and values are becoming increasingly central to the future of enterprise. It confirms our confidence at the Foundation in the importance of values driven business including our investment in the Allan Gray Centre for Values Based Leadership.

  • The audience of one

One of the highlights of the congress was a talk by Bill Aulet of MIT on “What’s next in Entrepreneurship and Entrepreneurial Mindset.”  A key insight was the observation, “In entrepreneurship specificity wins, generality does not win – that is consulting!” As we understand more about the process of entrepreneurship it inevitably becomes more specific and we need to apply this principle to our development of entrepreneurs.  Aulet uses different “personas” which follow different development paths to acknowledge the uniqueness of each individual pursing their entrepreneurial journey.

A treasure chest of entrepreneurship development materials are available at Entrepreneurship Educators Forum

  • Innovation hides in strange places

Innovation does not always come from the places that we would most expect.  One fact that emerged is that the average age of high impact businesses is 17 years old.  Not quite the fast emerging technology companies we would have predicted.  Another entrepreneurship development programme, which describes itself as the “non accelerator” doesn’t look for high potential, only for coachability in participants.  It also uses no external coaches and takes no equity in the business, yet their alumni of 400 have generated revenues in excess of $1bn over the last four years. We need to be careful in our implicit assumptions about how innovation is expected to work, else we might be denying ourselves important opportunities for unexpected breakthroughs.

  • Data is king

There is a tidal wave of data coming our way around entrepreneurship.  Whether it be a study of 100’s of accelerators or the intention to map the entrepreneurial ecosystem of 100 cities, or efforts to standardise government data collection, we will soon have no place to hide in terms of assessing what works and doesn’t work in the field of entrepreneurship. This is the next frontier for entrepreneurship and it is to be celebrated.

Finally, for South Africa, the best news is that this festival of entrepreneurial learning and partnership is coming to Africa next year for the first time ever, when Johannesburg hosts the 2017 Global Entrepreneurship Congress in March 2017.  We look forward to seeing you there as we build on the momentum of Medellin to showcase another part of the world capable of miracles of economic transformation.