CSSS: Entrepreneur and small business support in CSI Insights from Trialogue’s 2012/13

UWC Colloquium Monday 15th September

GEM in 1997

GEM in 2014

GEM Study • Most authoritative and informative study in the world • Used by policy makers in planning small business policies

What makes GEM Unique?

• GEM studies individuals, their profile and characteristics such as perceptions, attitudes, aspirations and intentions • Fledgling businesses that have not yet started • New business start-ups • Established business owners

GEM Measures •TEA…early-stage entrepreneurial activity - nascent - new businesses

•GEM distinguishes between - opportunity - necessity - age - gender

GEM Objectives • To measure differences in the levels of entrepreneurial activity between countries • To uncover factors leading to the enhancement and hindrance of entrepreneurship • To suggest policies that may enhance the national level of entrepreneurship

0% Algeria India Libya Iran Vietnam Philippines Botswana Angola Uganda Ghana Malawi Nigeria Zambia Suriname Russia Malaysia Macedonia Croatia Poland Slovakia Hungary Romania Bosnia South Africa Guatemala Lithuania Estonia Latvia Jamaica China Uruguay Mexico Argentina Brazil Thailand Panama Peru Colombia Chile Indonesia Ecuador Italy Japan France Belgium Germany Spain Finland Greece Norway Slovenia Korea United Kingdom Czech Republic Taiwan Switzerland Portugal Sweden Puerto Rico Luxembourg Ireland Netherlands Israel Singapore Canada USA Trinidad & Tobago

Total entrepreneurial activity rates in GEM countries, 2013

45%

40%

35%

30%

25%

20%

15%

10%

5%

Factor-driven economies Efficiency-driven economies Innovation-driven economies

Relative rankings, 2002 - 2013 SA’s TEA ranking

SA’s TEA rate

Median

Year 2002 2003 2004 2005 2006 2008 2009 2010 2011 2012

2013

20th out countries 22nd out countries 20th out countries 25th out countries 30th out countries 23rd out countries 35th out countries 27th out countries 29th out countries 22nd out countries 35th out countries

Number of positions above/ below median

of

37

6.3

19

1 below

of

31

4.3

16

6 below

of

34

5.4

17

3 below

of

34

5.2

17

8 below

of

42

5.3

21

9 below

of

43

7.8

22

1 below

of

54

5.9

27

8 below

of

59

8.9

30

3 above

of

54

9.1

27

2 below

of

69

7.3

9.6

12 below

of

67

10.6

10.3

1 above

Perceptions of good opportunities & capabilities in the adult population, 2001 2013

Potential entrepreneurs 2001 Perceive good opportunities 19.7 Perceive capabilities 30.4

2005 27.3 35.2

2009 35.4 35.5

2013 Ave SSA 37.8 74.5 42.7 78.9

Entrepreneurial attitudes in SA towards entrepreneurial intentions, 2003-2013

Entrepreneurial intentions Good career choice High status to successful entrepreneurs Media attention for entrepreneurship

2003 12.2 48.0* 48.0 47.5

2005 10.7 55.2 56.0 54.4

2009 13.3 63.7 64.0 63.9

2013 Ave SSA 15.4 58.3 74.0 77.8 74.7 80.2 78.4 77.5

Opportunity – and necessity-driven entrepreneurship in SA, 2001 - 2013

Necessity-driven (% of TEA) Opportunity-driven (% of TEA) Ration of Necessity vs. opportunity

2001

2005

2009

2013

Ave SSA

18.3

39.5

32.7

30.3

38.6

64.7

57.1

63.7

68.6

57.9

3.53

1.44

1.94

2.26

1.56

Entrepreneurial activity in South Africa by gender, 2002 - 2013 2002 2005 2009 Male - opportunity 3.9 3.4 4.6 - necessity 2.2 1.9 2.3 - total 7.3 5.9 7.2 Female - opportuntiy 2.7 2.1 3.0 - necessity 2.6 1.8 1.6 - total 5.8 4.5 4.7

2013 Ave SSA 8.8 21.7 3.3 10.2 12.3 32.4 5.8 17.3 3.1 12.0 9.0 29.9

Motivation for early-stage entrepreneurship by race, 2005 -2013

Black African - opportunity driven - necessity driven Coloured - opportuntiy driven - necessity driven Indian - opportunity driven - neccesity driven Whites - opportunity driven - necessity driven

2005 22.9% 29.3% 9.3% 2.1% 6.4% 3.6% 19.3% 3.6%

2009 49.1% 30.1% 3.0% 0.6% 1.8% 0.6% 9.7% 1.2%

2013 58.3% 27.4% 1.5% 1.2% 1.8% 0.9% 7.3% 0.9%

Distribution of educational levels for TEA in South Africa, 2001 -2013

2001

2005

2009

2013

Ave SSA

None

0.0

0.0

13.2

5.1

30.1

Some secondary Secondary degree

45.5

42.5

29.9

33.4

30.6

43.2

44.6

42.5

48.2

23.9

Post secondary

11.3

12.9

14.4

13.3

15.5

Youth findings

67% of the youth agree with this statement

“Where I live working for the government is the best way to earn a good living�.

“Young adults start their own business because they cannot find a job”.

“Young adults that start of the their own youth business agree with have to work these statements too hard for little money”.

61%

TEA

Male

13.1%

Female

8.9%

34% Believe men should earn more than women and that young women are disadvantaged in starting a business due to religious and or cultural beliefs

40% Believe a young woman’s primary responsibility is to start and maintain a family

Policy

Necessity -Driven businesse s

Opportunitydriven businesses

High-growth businesses

Policy

Opportunity -driven businesses

NecessityDriven businesses

High-growth businesses

Policy

NecessityDriven businesses

Opportunitydriven businesses

Highgrowth businesses

Challenges facing South Africa, 2014 • • • • • • • • • • •

Poor quality with respect to primary and secondary education High drop out rate with respect to education Extremely low levels of students taking maths & sciences Poor quality of maths and science education Low levels of potential and intentional entrepreneurs Low levels of conversion from early-stage business to established businesses High business failure rates High levels of corruption & nepotism High levels of crime Credibility in eyes of overseas investors Unemployment & underemployment