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SOUTH AFRICA
Urgent need to enable and sustain entrepreneurship
Despite a climate of massive unemployment, South Africa’s post-school education system remains largely preoccupied with producing graduates who will seek jobs, according to Narend Baijnath, CEO of the Council on Higher Education. In fact, levels of entrepreneurial activity are dropping and the education sector is partly to blame.

He was delivering a keynote address at the South African Technology Network’s Eighth Annual International Conference 2015 on “Entrepreneurship Education for Economic Renewal”, held at the science park of Vaal University of Technology from 19-21 October.

Backdrop

South Africa’s economy has not overcome the skewed legacy of apartheid, despite 21 years having passed since first democratic elections and despite persistent reforms, said Baijnath. It remains a dual economy with one of the highest inequality rates in the world, “perpetuating and deepening the legacy of inequality and exclusion”.

The top decile of the population accounts for 58% of the country’s income, while the bottom decile accounts for 0.5%, and the bottom half less than 8%, according to a World Bank study. “Economic growth has decelerated in recent years, slowing to just 1.5% in 2014, rendering growth as a redistributive strategy all but ineffectual.”

“Unemployment, poverty and inequality – among the highest in the world – remain our most intractable developmental challenges.”

Half of young South Africans between 15 and 24 years old are jobless. “Skills shortages in critical areas of need, declining global competiveness, and uneven infrastructure exacerbate the problem,” he continued. “What must preoccupy us – especially those of us in the business of higher education and knowledge production – is how to avert the looming crisis.

Entrepreneurship is important

Baijnath argued that for developing economies, entrepreneurship and social innovation are vital to unlock growth and promote economic inclusion. The creation of new business activities has become a major economic driver.

Promoting and sustaining entrepreneurship is an integral part of the government’s National Development Plan, which aims to speed up economic growth and job creation.

The National Planning Commission has prompted policy and structural developments to promote entrepreneurship, build capacity and foster entrepreneurial thinking starting at the educational level.

But higher education is still focusing on producing graduates for employment and efforts to raise South Africa’s levels of entrepreneurial activity are not succeeding – indeed, levels are declining.

The 2014 Global Entrepreneurship Monitor country report indicated that the percentage of South Africans involved in entrepreneurial activity had dropped by 34% since 2013 while in other countries in the BRICS group – Brazil, Russia, India and China – average early-stage entrepreneurial activity rate had risen by 14% over three years.

This, said Baijnath, was attributed to “a low level of overall education and training; social factors that do not promote entrepreneurship as a career path of choice; lack of access to finance; lack of sector-specific expertise; and a difficult regulatory environment”.

While traditional entrepreneurship often replicates successful ventures and enterprises, innovative entrepreneurship focuses on new methods, ideas or business models that create economic and social value, said Baijnath, citing Mayhew, Simonoff and Baumol (2012).

“Entrepreneurs can become agents of social change by seizing opportunities to improve systems, invent new approaches, and create solutions to change society for the better. An element of risk is involved, and this is what causes many to find more secure even if less rewarding avenues to prosperity,” said Baijnath.

Social entrepreneurship strives to combine the heart of business with the heart of the community through the creativity of the individual (McPherson 2006).

Creating an enabling environment

Recognising that entrepreneurship is vital to a competitive knowledge based economy should “impel universities, policy-makers and government departments to work cooperatively to identify and foster the conditions which drive people to start new businesses,” he argued.

“In similar vein, it should impel us to remove or ameliorate barriers to entry for new SMMEs [small, medium and micro enterprises]. And finally, it will impel us to distil the elements of a healthy entrepreneurial ecosystem so that they become the cornerstones of policy, programmes, funding and human development.”

Baijnath referred to the Four E Entrepreneurship Policy Framework developed by Constance van Horne, Zengyyu Huang and Mouawiya M Al Awad, which is based on the assumption that entrepreneurship is the intersection of enterprising individuals and the availability of opportunity.

It proposes four components vital to creating an enabling and supportive entrepreneurial environment: the availability of entrepreneurship education, the establishment of a supporting infrastructure or entrepreneurial ecosystem, building a holistic international export strategy, and creating energy and enthusiasm for positive social changes through entrepreneurship.

Thus, he said, a multi-pronged approach is required, “central to which must be partnerships and cooperation between government, business and higher education institutions”.

The role of higher education

There has been increasing recognition of the role of higher education in development and the knowledge economy, and where this idea had gained support, the concept of an ‘entrepreneurial university’ has taken hold.

“Central to this concept is the production of applied and basic research, often in a partnership with industry or communities, and the transfer of new knowledge to communities or to business for commercial purposes,” Baijnath argued.

To become more entrepreneurial, universities must “saturate entrepreneurship” throughout strategic thinking and actions, the curriculum, and how teaching and learning are conceived.

In becoming ‘agents of innovation’, universities will foster enterprising thinking among all their communities while “demonstrably delivering entrepreneurial impact” and producing graduates who stand out for having entrepreneurial skills, development-orientated values, aliveness to opportunities and innovativeness.

There are many possible roles that universities can play:

  • Catalytic. Creating awareness of entrepreneurship as a career option and changing the attitudes of students toward being job creators instead of job seekers.
  • Supportive. Providing needed skills and knowledge required for enterprise growth through innovative education programmes for entrepreneurs.
  • Knowledge production. Creating a strong knowledge base for entrepreneurship via research, programme development and the dissemination of information.
  • Reflective. The production of reflective practitioners who are capable of starting their own businesses and understanding the role of entrepreneurship as a tool for social change.

Culture and partnerships

Baijnath argued that developing entrepreneurs is often focused on opportunities and facilities rather than the inspiration and motivation needed for people to move from ideas to action.

“Creating widespread awareness among staff and students of the importance of developing a range of entrepreneurial abilities and skills is a therefore a critical culture-change imperative.”

Strong leadership and good governance are crucial to developing an entrepreneurial culture, and entrepreneurship should be embedded in the strategy of the institution.

According to the OECD, an ‘entrepreneurial university’ follows from generating entrepreneurial competencies, strengthening cooperation between stakeholders, and recognising the role of the university in driving regional, social and community development.

Collaboration is vital to creating an entrepreneurial culture, said Baijnath, as is a conducive policy environment. Universities must build systems “that allow for the cross-fertilisation of knowledge and ideas, and that support a flow of people and knowledge in both directions”.

“Whatever policy and funding arrangements are in place, synergistic partnerships between industry, community, higher education institutions and government need to be enabled in order to leverage each partner’s expertise and strength.”

Entrepreneurship education

Baijnath argued that the education of innovative entrepreneurs should avoid reliance on replicating out-of-the-box, standardised, traditional business perspectives – as it may impede the creative thinking and behaviour that is necessary for innovation.

“Exposure to relevant, intentionally-designed curricula is vital for the teaching and learning of innovative entrepreneurial skills. There should be a shift from transmission models of teaching (learning ‘about’) to experiential learning (learning ‘for’)” in order for students to acquire integrated entrepreneurial competencies and apply knowledge.

Work integrated learning could play an important role in such an approach, said Baijnath, as it facilitated the transition between preparing for and operating in a high skills work environment and empowers students to understand, adapt to and apply skills in the workplace.

“The assumption that entrepreneurship education should fall within one faculty or department needs to be examined afresh. While there is no ‘one size fits all’ approach, broader representation across the institution will add to the learning experience through the encouragement of multi-disciplinary approaches to learning, and diverse perspectives.

“If our aspirations are persistent and if we marshall our collective efforts in the ways that are clearly possible, we will design effective entrepreneurship programmes which empower students to create their own futures; generate their own wealth; construct their own sense of pride and self-worth; and most importantly, become job ‘creators’ instead of job seekers.”

References

  • Mayhew, MJ, Simonoff JS and Baumol WJ (2012) “Exploring innovative entrepreneurship and its ties to higher educational experiences” in Research in Higher Education, 53, pp 831–859.
  • McPherson G (2006) “Social entrepreneurship in developing nations” from http://citeseerx.ist.psu.edu/viewdoc/...1.197.8899
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