Raising entrepreneurs: The role of education

Raising entrepreneurs: The role of education

Is entrepreneurship an innate trait that some individuals are born with? Or can it be learned, like the ability to do algebra?

We believe very firmly that entrepreneurs can be made. In fact, everyone can – and should – be an entrepreneur. With this in mind, the Allan Gray Orbis Foundation has introduced the Entrepreneurship Challenge, a programme which nurtures entrepreneurial thinking and problem solving amongst high school learners.

The Challenge is rooted in gamification; important, because it represents a dramatic diversion from the traditional modes of teaching, especially around entrepreneurship. This is key, because the current education system appears to encourage learners to think like employees, rather than entrepreneurs, thereby stunting their entrepreneurial potential. Or, as author, entrepreneur and Foundation consultant Gary Schoeniger puts it, the other-directed approach, which entails telling people when and how to do something rather than allowing them to find their own solution, nurtures a non-entrepreneurial mindset.

Happily, Schoeniger maintains that it’s possible to change this mindset – but only if teachers shift their emphasis from delivery to discovery. Entrepreneurship is, after all, “an opportunity discovery process” – Schoeniger’s words – so, if learners are taught early on to look beyond the obvious, they’ll eventually embrace this as a habit.

Educators and engagement

The question, then, is how do you teach young people to remain primed for discovery? For Schoeniger, this comes down to three critical competencies – creativity, collaboration and critical thinking – which are amplified by personal qualities like resilience, curiosity, social and cultural awareness. Interestingly, these are the very traits which have been repeatedly highlighted as qualities required if human endeavour is to withstand the increasing appearance of robotics and artificial intelligence (AI) in the workplace. Thus, it is imperative that all people are taught to think as entrepreneurs, even if they do not see themselves becoming business owners in the future.

This is where platforms like the Entrepreneurship Challenge have an important role to play. The Challenge – an interactive national online competition – engages students by encouraging them to find solutions to real problems prevalent in their communities.

During the past two years, more than 8 500 students have taken part in the Challenge. However, the initiative aims to involve teachers, too, by providing collateral and content that helps educators support students on their journey to adopting a more entrepreneurial way of thinking.

This is not the only way in which the Allan Gray Philanthropic Entities are reaching out to educators. The Allan Gray Orbis Foundation Endowment established the Jakes Gerwel Fellowship (JGF); a community of high impact, expert teachers who understand the need to collaborate in order to solve challenges within the education system. By embracing this approach, teachers are cultivating the very skills they need to pass on to their students.

Added to this, the Allan Gray Orbis Foundation is working to create a culture of high impact entrepreneurialism in South Africa. This speaks to Schoeniger’s observation that students generally respond to relatable role models; individuals from backgrounds echoing their own circumstances who have shown that it is possible to achieve entrepreneurial success. Sadly, the lack of a thriving entrepreneurial culture in South Africa means that most students look to Silicon Valley and other international case studies for examples of entrepreneurs who have made a difference to society – people with whom they have little in common. Nor do the challenges these overseas entrepreneurs have sought to address bear much resemblance to the local context.

The Foundation’s work to create more relatable role models is carried out by its Scholarship Programme, through which high school learners who have displayed a curious, entrepreneurial mindset, who have established themselves as achievers and who are in financial need are granted scholarships. To date, 208 scholars have graduated from the programme.

Because the Foundation understands entrepreneurship to be a lifelong journey, it also supports students at tertiary level. Allan Gray Candidate Fellows receive funding for university studies, as well as access to resources that will support their entrepreneurial development.

The final arm of the Allan Gray Orbis Foundation, the Association of Allan Gray Fellows, is a network of graduates who have completed the Fellowship programme and have since gone on to pursue further studies, find employment or start their own businesses. There are currently 442 Fellows, who have created 62 new business, providing 820 new jobs.

Can anyone be an entrepreneur?

Schoeniger’s answer to the question of whether anyone can be an entrepreneur is an unequivocal “yes”. But, he says, if society is to realise the goal of inculcating entrepreneurship as an innate and common human trait, we need to redefine the meaning of the term.

He points to the fact that extensive interviews conducted with underdog entrepreneurs have shown, repeatedly, that even successful entrepreneurs seldom view themselves as such; rather, their entrepreneurship has come about as a by-product of their pursuit of other objectives.

This is key, he states: while few of us consider ourselves future business owners, almost everyone has a desire to innovate. Even more critically, we are all driven to find solve problems that hamper our wellbeing, and that of our communities. What’s more, Schoeniger contends that, in the future, every one of us will be solving problems within ambiguous environments, and with limited resources. This is why it is essential that every student is taught to think like an entrepreneur.

Schoeniger’s view is that the starting point for any policy maker or educator is the premise that entrepreneurialism is a natural part of life. This goes back to his concept of entrepreneurialism as an opportunity discovery process and the understanding we are all intrinsically motivated to find opportunities that will help us further ourselves, while also betting the environment around us.

He also urges policy makers and educators to discard the notion that entrepreneurs are rare individuals who are born with a special ability that must be supported. This requires recognising that the entrepreneurial mindset is a cultural artefact, bred by our social and educational systems – but so, too, is the non-entrepreneurial mindset. It also requires abandoning a binary view of entrepreneurs; the belief that people either are, or are not, set for entrepreneurial success.

One way to do this, he says, is by putting the curriculum in entrepreneurship, rather than putting entrepreneurship in the curriculum. Viewed from another perspective, this entails asking students which societal problems they would like to solve, rather than asking them which profession they would like to follow. In doing so, the current situation where entrepreneurs are created by accident rather than design will fall away.

From a practical angle, Schoeniger suggests that teachers group students together, and give them free rein to explore alternatives and options that may solve the issues that concern them personally. This stimulates curiosity and self-direction in a way that the rote learning model in place at most educational institutions simply cannot do.

Teachers are bound to notice positive spin-offs, as anecdotal evidence shows that students who are exposed to entrepreneurial training usually see an improvement in general academic scores, he notes. It’s easy to see why: when we’re constantly told what to do, our natural curiosity is smothered. When we’re able to forge our own paths, that flame of curiosity is fanned.

Ultimately, entrepreneurialism isn’t an end goal in itself. Schoeniger sees it as an inevitable outcome of allowing people to follow their passions and natural curiosity.

“Entrepreneurship is the framework for thinking that will allow future generations to adapt and thrive in an unpredictable future,” he concludes.

The State of Entrepreneurship in South Africa

The State of Entrepreneurship in South Africa

Entrepreneurs are always going to face challenges. That much is a given. But what about entrepreneurship itself? Are we, the stakeholders who are trying to create fertile ground for individuals who choose this route, destinated to have a similar struggle?

The answer to this question is critical, because it reveals much about the state of entrepreneurship in South Africa. And, at present, it’s an answer that gives cause for concern.

Never in South Africa has there been such a crying need for entrepreneurs who not only succeed, but who have the ability to positively impact and transform their community. However, at the same time, it’s clear that these people are not receiving the support that would allow this to become a reality.

This was highlighted during the State of the Nation Address given by President Cyril Ramaphosa during February. Although Mr Ramaphosa admittedly had a number of challenges that required urgent attention, the omission of entrepreneurship as a national priority was a glaring one. Unfortunately, this concept remains a “by the way” – and, as long as this is the case, our entrepreneurs will continue to struggle.

This is evidenced by the rate of growth in South Africa. Quite simply, the outcomes of entrepreneurship do not keep pace with the inputs.

Compare our playing field with that of other African countries, for example. By all accounts, we are to be envied: it appears as though our efforts and successes in the area of entrepreneurship exceed that of our peers in many instances. However – and this is the crux – our entrepreneurs seem doomed to fail. Yes, we record an impressive number of start-ups, but few of these translate into sustainable jobs. In fact, only 15% of our start-ups go the distance.

This means that entrepreneurship in South Africa is failing in one of the key areas where it is intended (and where it is sorely needed) to have the most impact: job creation.

One of the reasons for this failure is the lack of alignment between skills and ideas. Our entrepreneurs may have outstanding insights that allow them to identify niches with potential to become lucrative businesses, but they don’t have the skills to take the business from point A to Point Z.

At first glance, it may appear that the existence of such a gap is absurd, given the significant array of resources that have been established precisely to provide entrepreneurial support in South Africa. However, the resulting ecosystem is fragmented: yes, there is a wealth of information and infrastructure out there, but none of it addresses the entire spectrum of entrepreneurial support, from end to end.

Moreover, many entrepreneurs aren’t aware of where they are in their journey. Which source do they consult, if they don’t know where they are in their entrepreneurial career trajectory, and what this means in terms of their support requirements and potential company growth? These are not questions that can be answered with a quick reference to company profitability, business valuation and market size, because the entrepreneur’s experience is typically a dynamic one characterised by change, adaptation and iteration – all of which create complications when it comes to accurately predicting company growth. In an ideal world, an individual with entrepreneurial potential would have clear guidelines regarding the support sources available, and which would be the most appropriate and best placed to provide advice and skills based on their current and future developmental phases. But this is certainly not the case at present.

Government’s current focus on FET-related skills poses is a further obstacle. While this is, indeed, a progression from the notion that a professional career is the only (or, at least, the best) option for every individual, regardless of their aptitude, progress in putting in place a future-ready curricula that boosts critical thinking, creativity and emotional intelligence in addition to fast-tracking the attainment of digital and STEM skills that will enable the workforce of the future to participate in the digital economy – has been stagnant. After all, the digital economy is where the greatest opportunities for today’s entrepreneurs reside, and it is therefore crucial to ensure that they have the requisite skills to take advantage. Our present model does not allow for this, however.

Currently, we don’t have a clear picture of knowledge and skills acquisition as they relate to employment, and how these can be best harnessed to drive rapid innovation and optimise industrial growth. Consequently, the majority of skills development initiatives in place in South Africa are geared towards bolstering existing, established industries and trades – but, since a future shaped by Artificial Intelligence holds very little certainty for any industry, we have to acknowledge the need to take risks on unknown quantities. One way of doing this, is seeking out industries that have the potential to enable, derail or disrupt existing sectors. Difficult though this is – it is, after all, almost impossible to imagine a world that currently exists only in terms of “what ifs” – tools like systems-thinking and design thinking may help us identify the gaps and opportunities offering the greatest potential for entrepreneurial action.

Education is failing our entrepreneurs in other areas, too. We cannot ignore the coming impact of the Fourth Industrial Revolution on our world; nor can we close our eyes to the fact that the industries which will prove most productive in the years to come probably don’t exist at present.

The skills required to gain mastery over these industries are, naturally, very different from those which served previous generations. But, then again, the people who will work in these industries have shown themselves to be very different, too. Just as workplaces were initially challenged to accommodate the personalities and tendencies of millennials – the pioneers of the ‘slashie’ or gigging generation, for whom it is commonplace to invest time and energy in a number of different jobs rather than pledging loyalty to an organisation – it’s likely that further adjustments will need to be made if we are to optimally harness the strengths of Generation Z.

On the one hand, and working in our favour, is the intrinsic entrepreneurial flair that seems to come naturally to many of this generation. However, they are also hampered by short attention spans. They are, moreover, more global in their thinking, and more individualistic, than any generation before them.

If we are to help them on their path to successful entrepreneurship, we need to take these differences into account and, perhaps most importantly, end our view of entrepreneurs as one-dimensional people.

At a more pragmatic level, entrepreneurial training in the future will need to go beyond focusing on the basic skills that are essential for starting a business. We will also need to tap into the values and motivations of individual entrepreneurs, while helping them leverage their social networks; perhaps one of the most important tools they’ll have at their disposal.

In other words, we need to steer clear of a blanket approach to teaching, and strive instead for methods that resonate on a more individual level. More than anything, we need to get young entrepreneurs thinking: not about the ventures that are most likely to succeed in financial terms, but which are most likely to solve the challenges currently facing our communities and societies.

The Allan Gray Orbis Foundation’s Fellowship programme has been carefully designed to address as many of these challenges as possible. Our chief differentiator, distinguishing us from other initiatives aiming to support entrepreneurs, regards the individuals selected to take part. Rather than honing in on people who have already established startups and require resources to ensure sustainability or take them to the next developmental phase, we target individuals who have displayed entrepreneurial flair, or who have the propensity to become an entrepreneur. We consider the metamorphosis – from potential entrepreneur to actual entrepreneur and, ultimately, entrepreneurial career – to be one of our greatest successes, because it means that people who otherwise would have followed traditional career paths (and thereby entrenched the current status quo) are instead given a chance to realise their full entrepreneurial potential.

That said, the Fellowship programme is neither prescriptive nor restrictive. It recognises that the most fulfilling careers are based on an “either and” rather than an “either or” mindset, and that career paths evolve over time. We accept that for some, entrepreneurship is a goal in itself; for others, it is a milestone that is part of a greater journey. We encourage participants to adopt a similar understanding of their careers, and the open-mindedness which develops as a result is a powerful motivator when it comes to taking risks and engaging with the process of starting a business. This milieu has allowed some Fellows to acquire the work experience required to establish their own start-ups, while others use their learnings from this environment to create a clearer idea of what kind of business they would ultimately like to create.

One of the instruments we have employed to nurture this mindset is the Dual Track Programme, introduced in 2018. Cognisant of the struggle for the many entrepreneurs who do not want to concentrate solely on academics or the theoretical side of entrepreneurial training, this initiative provides support for those who have already launched their own businesses, allowing them to take a sabbatical from their studies for a year to extend their degrees. The remarkable take-up of this programme pays credence to our belief that although entrepreneurship may well be an inherent skill, it can also be developed, provided the individual receives appropriate inputs, including opportunities for collaboration, personal mastery, networking and lifelong learning.

We have set up a variety of other tools to fashion a safe environment where they may flex their entrepreneurial muscles without fear of failure. These include the Ideation, Validation and Creation programme, our Accelerator programme and our annual jamboree, all of which are platforms for developing essential entrepreneurial skills and networking.

We have, furthermore, consolidated our learnings over the past 14 years, tweaking our curriculum to ensure a greater chance of success for our programme participants. Of most significance here is the abundance of information regarding entrepreneurship that has become available since the Foundation was first established in 2005. From being a relatively unknown quantity, entrepreneurship has become far better documented. Consequently, we have more accurate insights regarding the characteristics of successful entrepreneurs, and how best to leverage these.

As a result, our programme has become considerably more structured. We have also adjusted the criteria of our Selection Camps to accommodate potential high impact entrepreneurs whose previously limited exposure may disadvantage them. In this, we have worked towards greater objectivity and consistency. With this in mind, we have, moreover, reviewed our successful profiles and application forms.

While these triumphs speak to the efficacy of our programme, we regard them not as our own successes, but as successes for the field at large – and, hopefully, we will see them create a springboard to boost entrepreneurship in future years.

Download infographic here

Greater rigour, greater impact

Greater rigour, greater impact

The Allan Gray Orbis Foundation is looking forward to a new era, integrating assessment processes and development processes for greater impact and enhancing the predictive value of tools.

When the Allan Gray Orbis Foundation was founded in 2005, it was with an eye to nurturing a culture of entrepreneurialism that would not only result in job creation; but which would also ultimately benefit the entrepreneurs’ communities. There is no doubt that it has been successful in these aims: now operating in four countries (South Africa, Swaziland, Botswana and Namibia), the Foundation has received more than 33°000 scholarship applications, and funded over 3°500 years of education. Consequently, the Foundation has provided funding to more than 157 scholars to attend school at reputable high schools and has seen Fellows go on to establish businesses valued at over R1.5 billion, which have created 679 jobs.

However, in spite of this success, the Foundation identified a need to review its selection processes, ensure the validity and reliability of its tools, and entrench greater objectivity during the recruitment process, so that it could improve its results further still.

Download report here

Download infographic here

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”.