Universities must reverse a decline in entrepreneurship

South Africa needed 14% of gross domestic product generated by entrepreneurs to achieve the economic growth rates essential for sustainability and development – and entrepreneurship was a skill universities could be training students – the 17th annual African Renaissance conference heard in Durban recently.

Dr Irrshad Kaseeram, deputy dean of research and innovation at the University of Zululand, said that 4.5% of South Africa’s economically active adults had to be engaged in entrepreneurial initiatives to achieve the country’s targets.

If entrepreneurs were producing 14% of GDP, the average South African household income would rise by R5,000 (US$403) annually. Currently the country had six billionaires and 46,800 US dollar millionaires with the bulk of this wealth being held by white or Indian South Africans. Correspondingly, the majority of poor citizens were black.

The Global Entrepreneur Monitor Report 2014 showed that South Africa's total entrepreneurship activity as a percentage of GDP dropped to 6.97% in 2014 from 10.6% in 2013. The number of adults in entrepreneurial ventures dropped to 2.68% from 2.9%.

Finding a theory-practice balance

Kaseeram said entrepreneurship could be taught at universities, but there had to be a balance between the science (theory) and arts (practical). It was both a science and an art and tertiary institutions had to tackle the challenges of balancing the theory found in the first and the practical found in the second.

It was critical for every educational institution to teach entrepreneurship as it was the “praxis [vehicle] for change”. Small businesses had the capacity to create massive employment opportunities, as South East Asia and South America had already demonstrated.

Entrepreneurship covered small, medium and microenterprises, larger ventures and individualism, while in the African context it also embraced co-operatives.

Kaseeram cited Enactus as a sound method for blending theory and practical and believed the international organisation should be made compulsory to use for all South African universities as a means by which to expand tertiary reach into rural areas.

According to its website, Enactus is a community of student, academic and business leaders committed to using the power of entrepreneurial action to transform lives and shape a better, more sustainable world.

The initiative connects stakeholders via entrepreneurial-based projects to empower and transform opportunities into real, sustainable progress for themselves and their communities.

Kaseeram believed the principles espoused in Enactus could encourage students to take more risks and thus develop their entrepreneurial flairs.

Universities not improving lives, driving growth

University of KwaZulu-Natal pro-vice chancellor for innovation, commercialisation and entrepreneurship, Professor Deresh Ramjugernath, said South Africa faced the tough question about whether or not it was on track to building an entrepreneurial economy via its higher education institutions.

Universities were meant to address South Africa's socio-economic challenges, but he believed they were not addressing the critical issues.

While universities were concerned with producing undergraduates and postgraduates and undertaking community outreach, they were not addressing areas that would help to create entrepreneurs such that the country could tackle poverty by achieving growth rates of around 8% to 10%.

“Every university should have the mission to improve the lives of citizens,” he said.

Critically, around 50% of South Africans between 18 and 25 years old were unemployed, and 73% of the country's unemployed were under the age of 35 years. There were also 600,000 graduates unable to find employment.

“Universities are training students to be employees and South Africa does not have sufficient jobs for them. We need universities to be training students to be good employers, not good employees,” Ramjugernath said, adding that this was underpinning the higher education shift to entrepreneurial universities.

Internationally, Ramjugernath said countries with the highest rates of innovation were also those with the greatest equality levels among citizens. The most innovative countries were also those with the highest percentage of PhD graduates per capita.

Ramjugernath said these two elements highlighted that innovation was the key pathway to dealing with socio-economic problems and South Africa needed a policy that drove innovation and entrepreneurship to overcome unemployment, poverty and inequality.

“There is an untapped potential for commercialisation and entrepreneurship in South Africa. Universities must develop a culture of innovation and entrepreneurship across all areas of society while engaging with external stakeholders, especially business and industry,” he said.

Becoming an engine for development

Taking Kaseeram’s comments to a practical level Professor Ahmed Bawa, vice-chancellor of the Durban University of Technology or DUT, said the institution was accepting its role as being an engine for entrepreneurship and was providing opportunities for graduates to balance theory and practical.

“They cannot leave the institution with just ideas, but also need the ability to apply them. This means creating ecosystems of entrepreneurship,” he said.

Several entrepreneurial projects within the institution included the workspace initiative that saw students operating businesses – all of the university's business cards are printed by students, for example – a software factory, health clinics and a toy factory.

“We must be completely absorbed by the challenge to understand if our products [graduates] are what the world wants while being aware that South Africa has a very high unemployment rate. This is not a sustainable situation and it is not a good solution to think the government will create jobs – that is the role for a new generation of entrepreneurs,” Bawa said.

However, the university did not operate as an island and it was critical for there to be interaction between the city and educational institutions.

Cities had to be increasingly technology-intensive such that the youth could understand that technology was not something happening in laboratories, but in their everyday lives.

Mangosuthu University of Technology Vice-chancellor Professor Mashupye Kgaphola said the fact that 500 million Africans would be urbanised by 2016 was both challenging and rewarding. It placed significant pressure on urban living space and infrastructure, but also created the environment for opportunities and innovations to flourish.

“Universities are grappling with the challenge of being part of the solution to unemployment,” he said.

Traditionally this had been achieved by “tinkering” with the curriculum, but Kgaphola said tertiary institutions were realising this approach was no longer working. The answer lay in creating “a new cadre of graduates”.

Mistakes as learning opportunities

“We need to recognise that mistakes are opportunities to learn something new,” he said.

However, while acknowledging the importance of creating graduates with entrepreneurial flair, Kgaphola said the core to universities lay in being teachers – and that meant a belief that mistakes reflected stupidity rather than an opportunity for learning.

In essence, academics were not entrepreneurs and thus finding a solution to how entrepreneurship could be taught had to come from organic elements, specifically in tackling teachers themselves and how they approached the issues.