The key factor
The key factor of the need for good startup skills is found to be very low in both the GEI and FEI research and the result is that the opportunity for South Africa to be an effective entrepreneurial nation is severely stunted. There is lack of highly educated business owners (particularly in the female-focused research). Skill Perception measures the percentage of the population who believe they have adequate startup skills. Research shows that most people in developing countries think they have the skills needed to start a business and this is borne out in the findings for South Africa, but their skills usually were acquired through workplace trial and error in relatively simple business activities.
The quality of human resources is crucial in the pursuit of becoming a winning nation and so a critical feature of a startup with high growth potential is the entrepreneur’s level of education. In this research the “Highly Educated Owners” variable captures the quality of entrepreneurs’ academic preparation. Sadly, for South Africa and female entrepreneurs particularly it shows up as one of the weakest factors.
As South Africa grapples with its tertiary education battles around free education, access and the requisite standards required to be accepted, both research findings show that if we don’t get this right, the vital role that postsecondary education should play in teaching and developing entrepreneurial skills will create an even wider gap for female entrepreneurs and, in fact, all young South Africans. According to the research, the fact that today there are 150 million students enrolled in some kind of education beyond high school, a 53 percent increase in less than a decade means that people all over the world see education as a pathway out of poverty. Unless South Africa deals with its issues around primary, secondary and tertiary education, we will be more and more behind the curve.
South Africa is also very low in the research findings on the “Human Capital” factor. It is obvious but borne out by research that the prevalence of high-quality human capital is vitally important for ventures that are highly innovative and require an educated, experienced and healthy workforce to continue to grow. This links closely with the education issues mentioned earlier where it is also obvious that a venture with high growth potential requires an entrepreneur with a high level of education.
The institutional variable “Staff Training” is a country’s level of investment in business training and employee development. As we know in SA we have had the good intent though the SETA system to provide access to training, but anyone who has tried to work with the SETA system will also know that it has not reached its intended impact by any means. There should be much greater investment in employees because the pay off is the increase in employee quality and this has a knock-on effect for the potential for entrepreneurial activity.
Insufficient internet access
The FEI research further identified that generally women were able to recognise opportunities, had a perception of the need for skills (even if they did not have them) and knew of entrepreneurs. Contrasted with this is the fact that women in South Africa have poor internet access generally (a serious institutional factor that must be fixed) and limited networks.
Sadly, women in South Africa do not have access to sufficient internet capacity and neither do they network sufficiently to be effective entrepreneurs. It is a known fact that entrepreneurs who have better networks are more successful and can identify more viable opportunities. They are also better able to access appropriate resources. Although the research shows that on the individual level women do “know an entrepreneur”, the institutional-level indicator, which looks at the level of internet usage in women and their degree of LinkedIn connectedness, shows that in South Africa women entrepreneurs lag in their ability to unlock opportunities through networking and especially internet networking.
In other words, South African women have the desire, but once again the institutional factors outside of their control do not empower them to act on this desire. The internet opens up new opportunities for entrepreneurial networking and has the potential to eliminate cultural, geographic and gendered social constraints that have in many cases limited women’s access to information and resources.
The graph from the GEI 2016 Report shows South Africa in relation to other African countries (Angola and Uganda) in terms of the 14 elements that make up the Index.
An enabling mindset
The enabling factors for any entrepreneur to flourish have been widely discussed and they range from friendly policy environments, access to finance, support structures, human capital and markets among others. However, in the context of the female entrepreneur the factor that has the most impact perhaps is that of culture or, more specifically, the degree of patriarchy in the context within which she operates. This has a direct impact on the critical factor of mindset.
At a recent IEF conference that I attended in Cape Town, an inspirational entrepreneurial role model, Hedda Pahlson-Moller, who is an Angel Investor, a Venture Philanthropist, an Entrepreneur and a Social Impact Catalyst said in her address that she had had a wonderful advantage having been brought up in Sweden and the USA. Particularly in Sweden she said that growing up she experienced no sexism and no prejudicial lens through which her aspirations were viewed. As such she never even considered that she might require permission from men or not be as good as a man. Without that requirement to wait for permission which builds an inherent, subconscious inferiority complex, she went ahead courageously and without fear of derision and conquered many a male-dominated environment.
The lesson to be learned from this is that so many of our environments, including sadly South Africa, are significantly male-dominated. The inability to lean in, break the glass ceiling and be equal is not only imprinted on women’s DNA but also bred into the psyche of men. This has the knock-on effect of creating an inferior, permission-seeking mindset in women. An insight from Hedda was to move from trying to be gender blind or gender neutral in her work to being gender positive. Given the fact that we lack that mindset, it is no wonder that we still make the distinction between entrepreneurs and female entrepreneurs.
So – to end with the continuation of the pillar theme, the Alan Gray Orbis Foundation itself has a pillar that is critical to the success of the female entrepreneur – and one that should be fostered, cultivated and pursued with vigour and passion by all who seek to improve the South African female entrepreneurial environment. For the Foundation this courageous commitment is defined as having the courage and dedication to continue, realising that applying consistent commitment has a way of overcoming.
So let us in South Africa have the courage to challenge the institutions that control our education and access to information, the personal dedication to develop our own skills and the constant commitment to creating gender positive opportunities thus unlocking all of SA’s human potential so that all of us can participate in this race and thereby improve our collective performance.