Innovation Growth Lab 2017 Annual Conference | By Teri Richter

Innovation Growth Lab 2017 Annual Conference | By Teri Richter

Pictures from: link https://storify.com/nesta_uk/igl2017
Photo Credit: https://storify.com/nesta_uk/igl2017

Working in a robot economy, evidence based innovation and overcoming policy barrier in entrepreneurship

On the 13th and 14th June 2017, the Annual Innovation Growth Lab conference was held in Barcelona Spain hosted by Nesta in partnership with the Ewing Marion Kauffman Foundation, the World Bank Group, COTEC Fundación para la Innovación, La Caixa Foundation and the Inter-American Development Bank. The Allan Gray Orbis Foundation was represented at the event which brought together around 250 individuals from policy makers, to practitioners and researchers from over 30 countries all passionate about working towards increasing innovation, supporting high growth entrepreneurship and accelerating business growth.

The key aim of the IGL2017 conference included:[1]

  • Learning about the next generation of innovation and entrepreneurship policies.
  • Engaging in wide-ranging discussions on crucial policy challenges including automation, inclusive economic growth, directing public innovation funding, and smart regulation to support innovation.
  • Improving organisation’s capability to design policies that deliver measurable impact, using different tools such as randomised controlled trials and big data.
  • Meeting a global community of peers to learn from and share experiences with.

The IGL conference created a platform for engaging discussions and creative ideas on how to encourage and develop innovation and entrepreneurial opportunities and growth, practical engagement between policy makers and practitioners and academics sharing their experiences and learnings of completed, as well as ongoing randomised controlled trials in the entrepreneurial development space. Each session provided useful take-aways:

Key take-aways from the IGL Main conference

The conference investigated the future of work in a robot economy, specifically suggesting ways in which policy experiments can aid in better understanding the potential impact of job loss compared to the value creation of these entrepreneurial innovations. A central theme to the future of work discussions centred around the need for a creative and growth orientated mindset, which will influence the skills and experience in the future economy. The most important mindset was proposed to be the mindset to learn. This notion links strongly to research being conducted at the Foundation around entrepreneurial mindset and the need to identify opportunities and act on these in a rapidly changing environment.

Key take-aways from the IGL Policy and Practice Learning Lab

The working sessions allowed for engagement between policy makers and programme implementers to share their experiences of challenges in innovation and growth and propose solutions to address barriers facing entrepreneurs. The emphasis on the need for implementing organisations to represent and become more heavily involved in advocacy and policy discussions was of key importance.

Key take-aways from the IGL Research Meeting

The research meeting emphasised not only the importance of experimentation and using experimental research designs such as randomised control trails, however also gave an opportunity to engage directly with researchers currently implementing these trials on entrepreneurial design interventions. These engagements allowed the opportunity to share research ideas as well as future collaborations and best practices.

Overall, the conference allowed for great discussions and sharing of ideas and learning, which emphasised that research is at the heart of entrepreneurial and policy development. Reporting solely on the amount of funding allocated and spent fails to understand the impact of interventions, delivery of results and generation of economic growth. Talking specifically about failure is useful to building the entrepreneurial development sector and can be more valuable than surface level successes. Innovation requires evidence.

To best assist entrepreneurs in their start up and growth, the sector needs to identify key policies that are barriers to entrepreneurs and advocate to remove these. It is important to note that simply developing and upskilling entrepreneurs is not sufficient to aid their growth and development.

Learnings for the Foundation

The strongest messages from the IGL conference that directly relate to entrepreneurial development organisations and apply to the Foundation centred around the need to strengthen empirical research and evaluation practices and sharing organisational and sector-wide learnings, as well as contributing to identifying and addressing policy barriers and gaps that impede entrepreneurial growth.

[1] http://www.nesta.org.uk/event/innovation-growth-lab-global-conference-2017

Loans need a rethink to ensure inclusion | By Kevin Rodrigues and Co-Pierre Georg

Loans need a rethink to ensure inclusion | By Kevin Rodrigues and Co-Pierre Georg

Borrowing sorrow: SA has a poor savings culture, with only 33% of adults having any form of money stashed away. Statistics show that hire-purchase, credit-card and store-card debt are the biggest culprits when it comes to lower-income earners becoming debt-stressed. Picture: DAILY DISPATCH
Borrowing sorrow: SA has a poor savings culture, with only 33% of adults having any form of money stashed away. Statistics show that hire-purchase, credit-card and store-card debt are the biggest culprits when it comes to lower-income earners becoming debt-stressed. Picture: DAILY DISPATCH

High-profile development organisations around the world such as the Bill and Melinda Gates Foundation are recognising the transformative power financial inclusion can have on the lives of people at the base of the pyramid.

These organisations are investing heavily in developing insights through organisations that promote effective policy, such as the Consultative Group to Assist the Poor. Regulation that promotes financial inclusion can benefit greatly from the latest findings and other case studies globally.

According to the latest Finscope survey on financial inclusion, only 33% of South African adults have any form of savings, either at home or with formal or informal institutions. This is far below the next lowest Southern African Development Community member state, Malawi, which has a consumer savings rate of 43%. There is much work to be done to promote saving in SA, especially for those at the base of the pyramid.

For those in this band, the ideal savings product should be easily and affordably accessible, transparent, easily understood and incorporate commitment devices, such as peer pressure. It should also not require restrictive documentation.

SA’s Financial Intelligence Centre Act (Fica), especially its documentation requirements, limits the ability of formal providers to serve these people through market viable products.

Fica’s exemption 17 contains a provision for banking institutions to require only an identity document to open accounts with a balance limit of R25,000, among other limitations.

This exemption should be expanded to include investment institutions, for example unit trust managers, to open the investment market to people who cannot produce a proof of residence and for whom it would be too expensive to procure a proof of residence.

This would make this market more attractive to investment service providers who could then begin to optimise their products for the poor.

The savings culture has adverse, long-term implications for the population. National Treasury estimates that only 6% of South Africans will be able to maintain their standard of living at retirement.

This is likely to exacerbate the savings predicament as younger generations will need to support older generations as they reach retirement age.

Access to retirement funds in SA tips above 10% only in the upper-income quartile. This is largely due to the scale challenges small, medium and micro enterprise (SMME) employers face with providing access to such benefits for employees.

The government should attempt to replicate the success of the UK’s mandatory auto-enrolment retirement fund, the National Employment Savings Trust. It provides an affordable national retirement fund option to which all SMMEs must subscribe their employees if they do not already have an alternative.

This retirement plan would have an option for employees to opt out of the service. Default provisions like this have been shown by Richard H Thaler, professor of behavioural science and economics at the University of Chicago, to promote positive savings behaviour.

This system provides latitude to employees to refuse the benefit should they be unable to afford the contribution.

A compulsory state pension fund has been a priority for SA’s Treasury for several years and is under discussion with key stakeholders, having been tabled at the National Economic and Development Labour Council in November 2016.

Despite the slow improvement in the South African savings landscape, access to consumer credit has grown rapidly, driven by microfinance institutions, salary-based lenders and alternative banks.

These lenders provide credit to consumers at exorbitant premiums and are highly successful. In contrast, and despite notable successes and progress, government development finance initiatives such as the Industrial Development Corporation struggle to reach scale and have high surplus balances.

The government could consider the example set by the Thailand Village Funds initiative, which deployed R400,000 per community to settlements across the country. This was used for loan funds administered by community leaders who have flexibility to set interest rates and repayment terms. This initiative has proven effective in Thailand, with 70% of participants reporting improved quality of life and 92.6% of participants repaying in full and on time in 2010.

The Centre for Financial Regulation and Inclusion’s research has found that community-run finance initiatives prove more effective than external initiatives as there is less information asymmetry between community members and better tailoring of loan terms.

Much can be done to alter the microfinance landscape in SA to promote responsible lending.

Aside from the progress of the National Credit Act and interest regulations, South African regulators should consider the example of Bharat Financial Inclusion, an Indian microfinance corporation, when regulating the way these institutions incentivise employees.

Dedicated to responsible lending, Bharat tries to ensure the incentives of the poor and their loan officers are aligned by not basing their loan officers’ salaries on their loan portfolios.

Mashonisas — or credit providers — tend to get a lot of negative attention for their lending practices and interest charges. However, when performing a quantitative analysis using data from the National Income Dynamic Study, we find evidence that mashonisas may not be the worst source of debt for poor South Africans.

We ran a statistical model to investigate what predicts whether people with a median income below R3,897 per month and some debt become debt-stressed.

We found that having hire-purchase debt, store-card debt or credit-card debt makes people at least twice as likely to be overindebted than having a loan from a mashonisa.

Given that these more adverse sources are formal and thus easier to regulate, the regulatory focus should be on promoting more responsible lending in these areas.

Aside from these regulatory measures, the value of enhancing consumer financial education cannot be discounted. The underprivileged should be able to fully understand the implications of their financial position and decisions and how best to manage their financial lives. Despite significant progress having been made through regulation requiring financial institutions to put in place consumer education programmes, challenges remain.

The most notable challenge is the language barrier and skills concentrated with English speakers. To counter this, the government should consider making it a graduation requirement for finance students to engage in community financial education and provide these students with translation resources where required.

The regulatory landscape can benefit greatly from implementing many of the recent insights developed through extensive investment in financial inclusion research.

Much research still needs to be done on how these insights can be implemented in a South African context, especially with new data available on platforms such as Insights2Impact.

We look forward to the significant improvements in South African financial inclusion and on the lives of the poor that will come from these findings and the implementation of pro-active regulation.

• Georg is a senior lecturer at the African Institute of Financial Markets and Risk Management and Rodrigues is a management consultant and has a masters of commerce in risk management of the financial markets

Source: Business Day

 

Are grittier individuals more successful? | By Teri Richter

Are grittier individuals more successful? | By Teri Richter

Origins and definition of Grit

The concept of grit was popularised recently by Angela Lee Duckworth and is defined as the perseverance and passion for long-term goals.  Duckworth and Peterson (2007: p. 1087 – 1088[1]) is characterised by:

  • “Strenuously working towards challenges
  • Maintaining effort and interest over years despite failure, adversity and plateaus in progress.”

Duckworth’s study of grit was borne out of an interest to answer the fundamental question: “Why do some individuals accomplish more than others of equal intelligence?” Duckworth and Yeager (2015[2]) discuss the importance of differentiating between intelligence or general mental ability and factors attributed to social and emotional learning [SEL] competencies, a phrase that highlights the relevance of emotions and social relationships to any complete view of child development (Durlak, Domitrovich, Weissberg, & Gullotta, 2015; Elias, 1997; Weissberg & Cascarino, 2013) or personality traits. Measurement and research on the latter being much less reliably and precisely tested than intelligence.

 

Duckworth and Peterson’s (2007) research suggests that grit is one of the personal qualities that is shared by most prominent leaders. The concept of grit is based on prior research of Galton (1892: p. 32) which proposed that ability alone was not the enough to bring about success, however that “ability combined with zeal and with capacity for hard labour”. Similarly, Cox’s (1926: p. 218) research concluded that evidence of “persistence of motive and effort, confidence in their abilities and great strength or force of character” early on influenced subsequent achievement.

Application of Grit at the Foundation

The following table is a representation of Duckworth’s synthesis of the key components of Grit and how we could incorporate certain aspects from the Grit literature into the Foundation’s work[3]:

Core component of Grit Definition Linking to the Foundation
1. Interest and passion which motivates that you are more likely to keep going and ‘stick-with-it’ if you love what you do This in turn would encourage us to aid beneficiaries in career guidance and finding their passion
2. Deliberate practice Which refers to practice that focuses on tasks beyond your current level of competence and comfort This approach could be incorporated into our curriculum in developing this skill in beneficiaries to pursue their passions and deal with challenges in academics.
3. Purpose which is about connecting your work or hobby to people beyond yourself and the value your work has This links with some of our ideas around responsible entrepreneurship. It could in turn be addressed through our programme curriculum
4. Hope which refers to optimism and the belief that there is something you can do to persevere, (which could also connect to locus of control??) There are links made between hope and optimism – this in turn could be measured through psychometrics and developed through personal development

Critiques of Grit

When considering the implementation of Grit measurement with Foundation beneficiaries, it is interesting to consider the findings of the King’s College Twin study published by Rimfeld, Kovas, Dale and Plomin in 2016[4]. The study used the Twins Early Development Study (TEDS) sample, which is a longitudinal study which began by recruiting 16 000 twin pairs across England and Wales between 1994 and 1996 and posited as a gold standard research design. The study has retained over 10 000 twin pairs. The King’s College study included 4 642 TEDS participants, 2 321 twin pairs. It collected and considered data on Grit score, Big Five personality factors and General Certificate of Secondary Education scores were obtained from participants. The study used phenotypic and twin analysis to compared means and variance for boys and girls and for MZ and DZ twins as well as to estimate the relative contribution of additive genetic (A), shared environmental (C) and non-shared environmental (E) components of variance.
The study’s findings showed that:

  • Personality factors explain around 6% of the variance in academic achievement at the end of compulsory education at age 16.
  • At this stage of education Grit adds only 0.5% to the prediction of GCSE variance after accounting for the association between achievement and Big Five personality factors.
  • Big Five personality traits have been well studied and research has consistently shown that these traits explain a small but significant proportion of the variance in educational achievement (Chamorro-Premuzic & Furnham, 2003; Krapohl et al., 2014; Laidra et al., 2007; Luciano et al., 2006; Noftle & Robins, 2007; Poropat, 2009).
  • Grit consistency of interest does not significantly predict school achievement. One possibility is that consistency of interest has both positive and negative effects on scholastic achievement.

Alternative personality factors that influence success

The King’s College study suggests that Grit adds little to the prediction of academic achievement when other personality factors are controlled. This does not exclude the possibility that other cognitive or non-cognitive predictors are important correlates of academic success.

  • The following non-cognitive factors have shown to influence academic success:
    • Self-efficacy has consistently been shown to be associated with school achievement
    • Curiosity, specifically intellectual engagement, has also been shown to be a significant predictor of school achievement—a hungry mind could be the driving force for effort and perseverance (von Stumm, Hell, & Chamorro-Premuzic, 2011).
    • Self-control—the capacity to regulate behaviour and focus in the presence of temptation (Duckworth & Gross, 2014; Duckworth, Quinn, & Tsukayama, 2012; Duckworth, Tsukayama, & Kirby, 2013; Moffitt et al., 2011; Tangney, Baumeister, & Boone, 2004).

The King’s College study suggests that Grit does not significantly predict academic success. Moreover, it suggests the concept of Grit is not as powerful as other non-cognitive personality traits. The findings do not suggest that teaching children to be grittier cannot be done or indeed that it is not beneficial. Trying to increase Grit or perseverance could have long-term benefits for children but more research is warranted into intervention and training programmes before concluding that such training increases educational achievement and life outcomes.

References

Dubner, S.J., 2016. How to get more grit in your life. Accessed at freakonomics.com/podcast/grit

Duckworth, A.L., Peterson, C., Matthews, M.D., and Kelly, D.R., 2007. Grit: Perseverance and passion for long-term goals. Accessed at http://www.sas.upenn.edu/~duckwort/images/Grit%20JPSP.pdf

Duckworth, A.L., and Yeager, D.S., 2015. Measurement matters: Assessing personal qualities other than cognitive ability for educational purposes. Accessed at https://upenn.app.box.com/s/0soslytk4us51po2owxbyj3g1et3al5n

Rimfeld, K., Kovas, Y., Dale, P., and Plomin, R., 2016. True grit and genetics: Predicting academic achievement from personality. Accessed at http://psycnet.apa.org/psycarticles/2016-06824-001.pdf&uid=2016-06824-001&db=PA

http://www.sas.upenn.edu/~duckwort/images/Grit%20JPSP.pdf

https://upenn.app.box.com/s/0soslytk4us51po2owxbyj3g1et3al5n

http://freakonomics.com/podcast/grit/

http://psycnet.apa.org/psycarticles/2016-06824-001.pdf&uid=2016-06824-001&db=PA

Circle Of Excellence Conference: Game On! | By Zimkhitha Peter

Circle Of Excellence Conference: Game On! | By Zimkhitha Peter

In March this year, as the Allan Gray Orbis Foundation we hosted our Circle of Excellence (COE) conference.

It’s worth mentioning that this year’s conference was held just before South Africa hosted the Global Entrepreneurship Congress www.gec2017  which was hosted for the first time in the African Continent.

In this post, I will share one of this year’s conference takeaways and an exciting initiative that the Foundation is launching this year,  aimed at cultivating an entrepreneurial mindset in youth through game-based learning and gamification.

Hopefully by now we all agree that, firstly, entrepreneurship is not just about starting business but about releasing human potential and in that sense, everyone can be entrepreneurial. Entrepreneurialism is needed in all walks of life, in education, politics, sciences and the private sector.

Secondly, entrepreneurship can be taught, but how it is taught is key. You can’t teach someone to be an entrepreneur from a textbook or a lecture. Entrepreneurship requires practice. In the world of entrepreneurship education, game-based learning and gamification are an effective way of teaching entrepreneurship. Play has always been an effective way of learning. The practice of play is about developing a free and imaginative mind, allowing one to see a wealth of possibilities, a wealth of opportunities and a pathway to more innovative ways of being entrepreneurial (Neck et al).

Identifying opportunities and developing and implementing ideas are key competencies for successfully meeting the challenges of today’s world. “Learning from challenges” offers students an opportunity to experience the effectiveness of their actions. Today’s students are tomorrow’s employees and entrepreneurs. Through their education we can foster their skills and abilities and strengthen their values (http://www.youthstart.eu/en/whyitmatters/).

There are two specific entrepreneurship games that I would like to share with you

  1. Youthstart Entrepreneurial Challenge

One of the COE conference speakers, Johannes Lindner, the founder and lead expert of the “YouthStart Entrepreneurial Challenges” Programme (www.youthstart.eu), developed the “Youth Start Entrepreneurial Challenges based on the reference framework for Entrepreneurship Competencies and the TRIO Model for Entrepreneurship Education.

Lindner_Entrepreneurship Excellence

The Trio Model for entrepreneurship

The Trio Model is a holistic teaching system that encompasses three segments: “Core Entrepreneurial Education” comprises basic qualifications for entrepreneurial thinking and acting, more precisely the competence to develop and implement ideas. “Entrepreneurial Culture” refers to the promotion of personal competences in a social context. We speak of a culture of open-mindedness, empathy, teamwork and creativity as well as risk-taking and awareness of risks. “Entrepreneurial Civic Education” aims at enhancing social competencies and empowering students in their role as citizens. After all, democratic thinking and self-reflection help young people express their opinions and assume responsibility for themselves, others and the environment.

Youth entrepreneurship challenge is available online http://www.youthstart.eu/en/challenges/

Lindner_Entrepreneurship Excellence

  1. Our new initiative: Foundation’s entrepreneurship Olympiad

In September, the Foundation in partnership with the Cape Town chapter of Singularity University will host the first ever entrepreneurship Olympiad (Schools Impact Challenge). Blue Helix, the Foundation’s entrepreneurship game, exposes learners to a set of entrepreneurial challenges that are aimed at cultivating an entrepreneurial mindset.

How it works 

Students log onto the platform via any smart device (phone/tablet/laptop/…) and access a series of action-oriented challenges. These challenges introduce the mindsets and then task students with applying them in a variety of real-world scenarios.

The challenge submissions (text and/or pictures) are peer-reviewed (with moderation) and points are earned, based on the rating received. Points earned place students on a student leader board and count towards the class points for the class leader board.

Why it works

  • Students enjoy competing on the leader boards.
  • Students enjoy the real-world application of what they’re learning.
  • Available on-demand on mobile, in bite-sized increments, with near instant gratification.
  • The peer review spreads good ideas and provides different perspectives on the same challenges students have tackled themselves.
  • The challenges are designed to target the most critical element of any behaviour change – the core underlying beliefs/world-views/self-concept!

Low demand on teacher time

  • Requires a minimum of just 10 minutes of class time per week. (For a quick check in)
  • Minimum of just 20 minutes of moderation per week. (Accessible on-demand on any smart device)

GAME ON

Watch this space for the 2017 entrepreneurship Olympiad!!!

 

 

GEC 2017 | By Fredell Jacobs

GEC 2017 | By Fredell Jacobs

For the very first time on African soil, the Global Entrepreneurship Congress arrived with a key message, “entrepreneurship, innovation and disruption will continue to drive economic growth and development”. The theme Digital Disruption facilitated rich debate on how technology can serve as a catalyst for economic growth while it showcased disruption in action with examples from Adrian Gore on how Discovery disrupted the medical aid industry and continues to do so in the financial services sector. Disruptions also translate very neatly into the entrepreneurial process, where entrepreneurs continue to forge new ways to exploit market opportunities and create value and Africa presents a multitude of opportunities.

At the GEC, the Foundation led the panel on Entrepreneurial Mindset and publicly shared our progress since the GEC+ in Daegu in 2016. The panel allowed us to clearly state the purpose of the project, its overall mission and it was rewarding to see how many people are interested in contributing to the research. The purpose of this GERN research project is to develop a shared understanding of entrepreneurial mindset and a universal methodology to measure it across all 160 member countries.

As an introduction we presented a chronological literature review, the academic framework and the seminal roots that flow from behavioural, cognitive and social psychology. The process and methodology for the design of the entrepreneurial mindset survey instrument was also covered before the panel shared some of the practical challenges of the project.

Audience participation presented very exciting questions about entrepreneurial mindset and it was evident that people are interested in both the academic and practical implications of entrepreneurial mindset. What stood out for me was a question from an entrepreneur in the audience about recruiting and developing an entrepreneurial mindset. It was a welcome reminder about the practical value of this research and the context for application. At the same time, it was encouraging to hear another voice in support of what is core to the Foundation’s selection methodology.

The GEC+ Cape Town offered a more intimate opportunity for GERN members to understand the project in its current form. We also encouraged contributions from the GERN community and shared how GERN Countries can participate in the future. The highlight of the GEC+ Cape Town that must be celebrated is the fact that Victor Hwang, Vice President of Entrepreneurship at the Kauffman Foundation, agrees on the importance of entrepreneurial mindset as a research agenda item and this will certainly open more doors for global collaboration to deliver on our end goal.

The GEC+ also drew inspiration from design thinking to craft solutions that will serve as enablers in the global entrepreneurship ecosystem. Design thinking was used to “crowd source” current challenges and solutions from a group of highly qualified ecosystem practitioners to ensure a holistic understanding of how specific conditions affect ecosystem development.

The final day of the GEC+ Cape Town at Philippi Village offered GERN members an immersive experience of the local ecosystem and we were able to explore how to ensure equitable growth and development. It was encouraging to see and experience the application of GERN research with the presentation of practical solutions for the local community to access entrepreneurship capacity development opportunities in the local ecosystem. It was a great manifestation of our theme, Entrepreneurial Mindset in Action!

 

South Africa ranked one of Africa’s top entrepreneurial nations  

South Africa ranked one of Africa’s top entrepreneurial nations  

March 2017: South Africa has been named one of sub-Saharan Africa’s entrepreneurial frontrunners, after a global report placed the country in second place, after African counterpart Botswana.

According to the Entrepreneurial Ecosystem of South Africa: A Strategy for Global Leadership Report, researched and produced by the Global Entrepreneurship and Development Institute (GEDI) – a research organisation that studies entrepreneurship and economic development – with support from SEA Africa (local organisers of the Global Entrepreneurship Congress), South Africa’s entrepreneurs continue to make good strides with entrepreneurial activity. The report was commissioned by the Allan Gray Orbis Foundation and the South African Breweries (SAB) Foundation. These two leading local foundations, which are committed to developing entrepreneurship in South Africa, commissioned the report in order to better understand the role that entrepreneurship is playing in the country. The intention was also to benchmark South Africa globally, celebrate achievements and strengths, and to assess areas for improvement so as to know how best to guide resources and policy in the coming years.

The report states that entrepreneurs in South Africa have overcome structural factors, including the country’s slow GDP growth rate and the number of large firms dominating the business market to produce some of the most successful enterprises on the continent. The country is poised to achieve further growth in years to come through entrepreneurship and indicates that South Africa is on par with other middle income countries around the world when it comes to entrepreneurship, and provides the institutional support necessary for high-growth businesses to startup and thrive. South Africa was ranked 55 out of the 137 countries surveyed globally. The ranking places Botswana in first place from Africa, followed by South Africa, Namibia, Gabon and Ghana.

“The report confirms South Africa’s position as an entrepreneurial leader on the continent and provides an insightful road map for us to focus in on those areas that will provide the greatest leverage for accelerating our entrepreneurial ecosystem even further,” says Anthony Farr, CEO Allan Gray Orbis Foundation.

“We work with approximately 80 new entrepreneurs every year and have positive experiences of innovation and growth, along with a well-developed (if a little fragmented) entrepreneurship ecosystem. We have struggled to reconcile this with some misconceptions regarding South Africa’s lack of entrepreneurship and our perceived poor performance against other countries.  Along with Allan Gray Orbis Foundation, we wanted to give an alternative view. We are pleased with the results, which show that South Africans can congratulate themselves and be proud of what has been achieved in the entrepreneurial space, while still being realistic about what needs to improve in order to drive economic growth and job creation,” says SAB Foundation Director, Bridgit Evans.

The  findings highlight South Africa’s positive performance in entrepreneurial aspirations, innovation, high growth, internationalisation and risk capital, all considered important elements to achieve economic growth in the country. It further states that SA provides better conditions for entrepreneurship when compared to 20 other countries with a higher per capita GDP, including Russia, Mexico, Brazil and China.

The GEDI report covered 28 countries in the Africa region, which amounted to 54 percent in total. The report demonstrates the country’s position globally when it comes to new businesses, competitor position, new businesses offering new products and new businesses using new technology, and ranked the country in the top 25 percent of countries surveyed globally in these areas. But stumbling blocks exists, and factors such as finance, skills, access to local and international markets, education and the right network need to be addressed to ensure that South African entrepreneurs are able to grow and thrive.

The report suggests that South Africa needs better, innovative and growth-orientated entrepreneurs who are motivated to grow and prosper within the South African environment and through constant engagement with the global economy.

“Top actions that could strengthen the entrepreneurial ecosystem include helping more entrepreneurs get the skills they need, expand access to banking, particularly mobile banking and accelerating technology absorption, with a focus on digital technology,” the report says.

Research Infographic: Click here

The entrepreneurial ecosystem of South Africa: A strategy for global leadership

 

 

Entrepreneurship Calendar – 2017 | By Fredell Jacobs

Entrepreneurship Calendar – 2017 | By Fredell Jacobs

The world marched into 2017 with a hastag that most can only comprehend as #IsThisReallyHappening? as 2016 was trending out of #Brexit and was greeted by the overnight surprise of #Trump. The Davos meeting used the theme Responsive and Responsible Leadership to inject some calm amidst the chaos while most of the entrepreneurs in attendance focused on how to take advantage of the 4th Industrial Revolution. It was also evident that the world is looking to entrepreneurs and innovation from human capital to help restore economic growth, reduce extreme poverty and inequality. This year then presents an exciting journey for entrepreneurship capacity development and South Africa will take centre stage in the very first quarter.

The local entrepreneurial ecosystem is buzzing with excitement as the headlines are clearing up from #Gupta stories and making way for the events that are attracting global audiences. Our very own State of the Nation Address (SONA) requires entrepreneurs to pay attention as the President will offer some hints about what to expect from government and the policy environment. SONA is in the very same week as The Mining Indaba and the trickle-down impact of these engagements can serve a healthy dose of growth for SME’s with the right offering. The Budget Speech is hot on the heels of SONA and this is where most businesses take their cue on how to plan for accommodating payroll and tax adjustments covering PAYE, UIF and VAT. This year’s budget will not only have us hold our breath when the Minister gets to the sin-tax part of his speech, but also when the rating agencies give their verdict when they mark our fiscal report card.

March is the month of great excitement for the local entrepreneurship ecosystem. The largest global entrepreneurship gathering is making its African debut with many highlights including a Ministerial Panel and an address by the Deputy President of South Africa. The Global Entrepreneurship Congress attracts more than 5000 delegates from over 160 countries and kicks off in Johannesburg on 13 – 16 March. The GEC is followed by the GEC+ on 17th & 18th March in Cape Town hosting the Global Entrepreneurship Research Network (GERN) Annual General Meeting and public dialogue sessions under the theme “Entrepreneurial Mindset in Action”. The Foundation is heavily invested in both these gatherings and will contribute towards a variety of topics on the GEC2017 Agenda while it serves as the official host of the GEC+.

The Seedstars Summit on 6th April in Lausanne Switzerland will bring together entrepreneurs representing startups from over 70+ emerging markets. This summit will focus on entrepreneurship and innovation in emerging markets with the aim to strengthen collaboration and relationships with established ecosystems to broaden and deepen our common understanding of entrepreneurship capacity development.

In May Africa takes centre stage at WEF Africa when global leaders will descend on Durban. The Africa agenda will accommodate topics on divergence, diversification, human capital and innovation to take advantage of the 4th Industrial Revolution while at the same time challenges such as youth unemployment, climate change, low growth and extreme poverty will not escape attention. In the same month Get in The Ring will host its global conference in Singapore expecting more than 150 startups from over 100 countries competing for top honours in the ring!

The second half of the year gets momentum as we hit Spring time in South Africa with the SA Innovation Summit in the beginning of September. Later that month the ANDE Global Conference ,which always attracts leading contributors in the entrepreneurship capacity development arena, will cover the impact investing landscape in emerging markets and share the highlights from their State of the Small and Growing Businesses (SGB’s).

In November the Creative Business Cup allows us to experience the bridge and growing connection between entrepreneurship and the creative industries and is always one of the highlights during Global Entrepreneurship Week. GEW builds on a network of over 20 000 partners in more than 160 countries with 35 000 events reaching 10m people in one week to create and stimulate entrepreneurship awareness in all levels of society.

The Entrepreneurship Calendar for 2017 is jam-packed with exceptional gatherings that attracts the best and brightest in the ecosystem. The Allan Gray Orbis Foundation is proud to be part of these conversations and always excited to make a contribution. This is how we live Entrepreneurial mindset in action!

 

 

 

 

The Value of Accelerators

The Value of Accelerators

15202742_1435546749806623_8869701141692096511_nDemo Day

Monday 28 November saw E2 and the Foundation’s first accelerator programme culminate at Demo Day. Allan Gray Orbis Fellow entrepreneurs pitched their hearts out to investors, mentors, industry players and family members gathered at the Accelerator venue at Standard Bank in the Cape Town CBD. The event generated such buzz that we were trending #1 on Twitter South Africa for much of the day. Each group was given 8 minutes to display their compelling, fully validated idea and the market traction they have achieved over the short period.

Each venture has been on quite a journey to get to this point. Before this programme began, each had progressed through a 4-month part time validation programme which aimed to ensure that the original idea had a probable Solution Market fit (meaning that the problem they identified was actually experienced by an identifiable group of customers, and that those customers were likely to pay to have their problem resolved). Once this conclusion was arrived at, the Ventures received a R200 000 pre-seed investment and a place on the next step: The E2 / Foundation Accelerator.

The accelerator is a 3-month intensive programme aimed at launching companies to market and assisting them in gaining rapid market traction.

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Accelerators

Start-up Accelerators first emerged in 2005 with the launch of Y-Combinator in Silicon Valley. Since then hundreds of accelerators have started all over the world with great interest shown by private and public sector alike, drawn to the potential of these programmes to generate economic development.

According to the recently formed Global Accelerator Learning Initiative (GALI), the standard hallmarks of an accelerator are:

  • They tend to be limited in duration (as opposed to incubator programmes which can be years in length);
  • They work with cohorts of early stage entrepreneurs; and
  • They aim to facilitate connections with potential investors.

Basic elements of most Accelerators include:

  • Equity based seed funding;
  • Provision of office space and basic business services;
  • Access to discounted service providers, industry experts and mentors;
  • Structured community support and accountability from fellow entrepreneurs in the cohort;
  • Access to further funding, focused around refined pitches at a Demo Day.

Despite the great interest shown in acceleration and hundreds of programmes run globally, there is very little research showing the concrete benefits of acceleration. GALI has been formed in reaction to this as a collaboration between the ASPEN Network of Development Entrepreneurs and Emory University.

GALI’s initial study, which can be found here, found major benefits to ventures who were accepted into a group of accelerators when compared to applicants who were rejected. A year after the programme, accelerated ventures had seen greater growth in revenues, employees, and most significantly in investment received: accelerated ventures averaging investment of $54,236, while non-accelerated ventures averaged just over $6000.

The same study compared more successful programmes to less successful programmes, resulting in the following insights:

  1. Partner quality improves programme performance. Partners include service provides, experts and mentors.
  2. Time spent on programme-related activities lowers programme performance. Most successful accelerators allowed entrepreneurs to spend most of their time working on their businesses.
  3. Quality of the applicant pool improves programme performance. Programmes who selected entrepreneurs with advanced education and greater experience were more successful.
  4. Networking among cohort members improves programme performance.
  5. Emphasis on financial acumen decreases programme performance. High-performing programmes spent less time working on finance, accounting, and formal business plan development and more time on presentation and communication skills, networking, and organisation structure and design.

Major other learning we have gleaned from our first Accelerator experiment is that the model has significant room for development to better cater for non-tech focused businesses, and to better fit into an African context. The majority of accelerator programmes have tended to be tech focused. The short time frames are suited to the tech development and launch cycle. Though the basic principles are universally applicable, Lean Start-up methodology around which the programmes are typically built, was initially conceived with tech in mind. This presents a challenge and an opportunity to accelerator programmes with a diverse group of entrepreneurs and ventures.

The field of new venture acceleration is in its infancy and there are endless possibilities for innovation and improvement in implementation, especially in creating an inclusive acceleration model suited to diverse African entrepreneurs and industries.

Where to from here?

Bringing us back to last Monday’s Demo Day, veterans of the entrepreneurial eco-system in attendance commented on the uniformly excellent quality of the group’s presentations, and were amazed that such a diverse group of businesses could all have come so far in such a short period of time. But this is just the beginning.

As you might imagine, though this programme has now come to an end, this is only the beginning of the journey for the 9 new ventures. There is a long road ahead and the Association and E2 will continue to provide as much support as possible. This will include the ongoing provision of basic office and business services and access to networks when necessary.

We are also anticipating beginning the journey again with a whole new cohort of Allan Gray Orbis Fellows in March 2017.

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GEW 2016 momentum lights the path to GEC 2017 in Johannesburg

GEW 2016 momentum lights the path to GEC 2017 in Johannesburg

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Cyril Ramaphosa

We are now well and truly into the swing of Global Entrepreneurship Week (“GEW”) 2016. There were some powerful words from our Deputy President, Cyril Ramaphosa on the importance of entrepreneurship to South Africa at the official launch of the South African 2016 GEW in Johannesburg last Friday, with no less than the President of the Global Entrepreneurship Network, Jonathan Ortmans in attendance. Of particular interest was the Deputy President’s commitment to entrepreneurial skills development being initiated at a young age where he commented: “An education of an entrepreneurial nature where even at school, you have a course of entrepreneurship, that we should reconfigure the curriculum of our education system so that we can imbue young people with entrepreneurial knowledge from a very young age.”  This direction is wholeheartedly supported by the Foundation.

This followed a very successful Cape Town launch of the South African Business Angels Network (SABAN) in Cape Town on the Thursday. The event featured a world class line up of speakers including the key driver of the Turkish Angel Investing community, Baybars Altuntas. Turkey’s angel investing has moved from being almost nonexistent five years ago to now being regarded as one of the most vibrant in the world where angel investors are registered with the local stock exchange and investors are eligible for a tax deduction of up to 75% on their investments.

Just as we were recovering from all this activity, yesterday brought the launch of the 2017 Global Entrepreneurship Index (GEI), a much more holistic measure of entrepreneurial activity including both individual and institutional measures. Unsurprisingly USA was top of the index. Again South Africa is scored as one of the top countries across Africa – a very different result to other entrepreneurial measures. (We will cover the GEI 2017 in more detail in a post later this year.) The Foundation has been involved in research to be released next year that will take a deeper look at the results of this index over the last 10 years to give a much fuller indication of the possibilities and challenges of the South African entrepreneurship ecosystem.

All of this is taking place against a growing sense of momentum for entrepreneurship in South Africa with the explosion of new accelerators and the launch by the CEO’s Initiative SME workstream of the SA SME Fund, with an initial commitment of R1.5 billion to list just two developments. This momentum can be fast tracked even further by taking full advantage of the once in a generation opportunity next year for the South African entrepreneurial ecosystem, when it hosts the Global Entrepreneurship Congress (“GEC”) in Johannesburg from March 13th to 16th, 2017. 

Every year, the GEC gathers together thousands of entrepreneurs, investors, researchers, policymakers and other startup champions from more than 160 countries to identify new ways of helping founders start and scale new ventures around the world. A unique group that will now be coming to our country!  The theme that has been chosen for the GEC 2017 is “digital disruption” opens many possibilities.  The world in which we live has become increasingly virtual as concepts such as “digital disruption” and technology disrupt the traditional ways of doing business and simplifying life. The digital disruption concept aims to explore how technology and digitization are revolutionising industries such as agriculture, manufacturing, education and healthcare.

And finally in amongst your excitement for the GEC next year, please don’t forget to be an active participant in the remainder of GEW 2016. The Foundation has made it easy for you to find the GEW buzz as Allan Gray Fellows have developed a platform, Imbizo Junction where you can find the listing of all events taking place during that week, 14 – 20 November 2016.

We would love to hear your thoughts on the state of the South African entrepreneurial ecosystem.

GEW is upon us

GEW is upon us

The Foundation is excited to be part of Global Entrepreneurship Week (GEW). The Association of Allan Gray Fellows developed a platform, Imbizo Junction where you can find the listing of all events taking place during that week, 14 – 20 November 2016.

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During this week 165 countries will celebrate GEW with nearly 10 million people expected to participate in 35,000 events and competitions across the world. The local, national and global efforts connect entrepreneurs at all stages to potential collaborators, mentors and investors to aid them start and scale innovative new businesses.

Now in its ninth year, GEW is many multiples bigger in size since it was launched in 2008. The widespread effort unleashes an estimated $140 million through members and partners of the Global Entrepreneurship Network (GEN). For interest hereby the 2016 GEN Impact report.

Eight new countries have joined the GEW initiative this year thanks to the following national host organizations:

While every event is unique, several GEW themes will spotlight common topics and important focal points throughout the week, including: Startup Cities (Monday), Youth (Tuesday), Women (Wednesday), Investors (Thursday) and Scale-ups (Friday).

  • Investors: Provides an opportunity for early stage investors to build and strengthen their entrepreneurial ecosystems, helping to enhance connections with startup communities and policymakers alike
  • Women: Celebrates female entrepreneurs and others in the space while offering opportunities to expand their networks, identify resources and share knowledge with women around the world
  • Youth: Celebrates and shapes the next generation of entrepreneurs through activities and competitions to help them sharpen their skills and connect them to potential cofounders, mentors and even investors
  • Cities: Explores widespread efforts by policymakers and startup communities alike to support the development of local entrepreneurs, ensuring they have access to the connection and resources necessary to help them launch new startups that provide jobs and generate wealth.
  • Scale-ups: Explores what it takes for these high-potential businesses to thrive and what strong entrepreneurial ecosystems can do to help them to maximize their growth potential.

Other highlights for #GEW2016 include:

  • The Global Entrepreneurship Index, scheduled for release on the opening day of GEW (November 14), measures the health of the entrepreneurship ecosystems in each of 155 countries and ranks them from top to bottom.
  • The official opening of GEW is being held in Johannesburg, South Africa, to begin the road to the 2017 Global Entrepreneurship Congress which will bring 5,000 entrepreneurs, investors, policymakers, researchers and startup champions to the city next March.
  • Ten promising new startups will be named as finalists in the Startup Open – with the winner getting a free trip to Johannesburg, South Africa and a spot on stage at the Global Entrepreneurship Congress in March 2017.
  • Richard Branson, founder of the Virgin Group, will take the stage at INCmty in Monterrey, Mexico.
  • The launch of Startup Huddle series of events to strengthen local startup ecosystems by connecting emerging entrepreneurs with other entrepreneurs, mentors and investors.

The official finale of GEW is being held in Cork, Ireland, at the Startup Nations Summit. The summit will unveil a new tool to help policymakers and advisors share and explore innovative policy approaches and public sector-driven programs that help entrepreneurs start and scale new high-impact companies around the world.