People tend to think that an entrepreneurial mindset and business skills are needed only by people who are interested in owning their own businesses. But starting and running businesses is not the only reason why people should develop their entrepreneurial and business management skills. When we look deeper, we will soon realise that entrepreneurial behaviour is needed on a much wider front. Entrepreneurial behaviour can benefit our economy on four levels.
On an individual level, it is becoming more and more difficult to find work in a competitive employment market. People are finding that they need additional skills on top of whatever qualifications they have. Although South Africa suffers heavily under the burden of unemployment and we hear cries for more jobs on a daily basis, there are large numbers of job vacancies in the South African employment market, especially in the area of management. ‘Under-employment’ is also a big problem. Many people complain that they are ‘under-employed’ and are working in jobs where they earn much less than their qualifications should actually allow them to earn. Why is this so?
One important part of the answer might be found in the fact that we still have a job-seeking culture. The mere fact that a person has a good technical or vocational qualification provides no guarantee of finding a good job in the modern economic environment anymore. Something more is needed. Businesses and other organisations are interested not only in what people know and can do, but also in what extra value they can add to the organisation. This is where having an entrepreneurial mindset and spirit can add tremendous value to the employability and ‘market value’ of any individual. It all has to do with the ability and willingness not only to do your job with the minimum effort, but to identify opportunities in your working and organisational environment to create extra value. Businesses and other organisations are willing to pay a premium for such workers. Even if someone is not interested in owning their own business, their entrepreneurial spirit means that they have a mindset which can identify opportunities and they can use their own initiative to create opportunities rather than being an opportunity taker or job-seeker.
Entrepreneurial behaviour is also important on an organisational level. According to the World Economic Forum, productivity in the South African economy is too low for South African businesses to compete effectively on world markets – despite our weak rand. This situation results partly from a working culture where employees have an attitude of wishing to earn as much as possible by doing as little as possible. Unfortunately this kind of work ethic is not good for productivity, nor does it help South African companies to compete effectively with global competitors.
This kind of behaviour results from the fact that the vast majority of our people do not understand (or care about) the factors that drive competitiveness. Two important factors in this regard are individual productivity and innovation. Both are closely linked to the mindset of employees. Productivity and innovation are not a function of management only; they are the responsibility of every employee in a company. If every employee were to strive constantly to improve his or her own efficiency by experimenting and finding better ways to do tasks, the company would benefit by being more competitive in the market. This is true not only for companies which export goods and services. Businesses that focus on local markets only cannot escape global competitiveness as they will compete with overseas businesses while doing business in the South African market anyway.
Businesses and other organisations which want to improve their competitiveness should thus put measures in place to enhance entrepreneurial behaviour by remunerating employees who come up with ideas that can improve business performance.
South Africa will also benefit from an economic perspective, if it fosters a more entrepreneurial culture. According to the well-known Global Entrepreneurship Monitor or GEM reports, South Africa is not doing well in terms of creating new businesses (SMMEs) and the survival thereof. The GEM report states that only about 2% of the South African population is successful at starting and running businesses that survive for more than three years. We seriously need to improve on this figure if we want to address the challenge of job creation effectively.
According to the GEM reports, this situation can be attributed to the fact that we have too many necessity entrepreneurs in relation to opportunity entrepreneurs. Necessity entrepreneurs (often referred to as ‘survival’ entrepreneurs) are driven by necessity for survival and therefore, in that sense, are not seen as real or opportunity entrepreneurs. Our society needs to increase the number of real entrepreneurs, and part of the solution is to stimulate and create a more entrepreneurial society in general. This can only be achieved by accepting and promoting entrepreneurship and owning a small business as a true career choice rather than because nothing else is working for you or you can’t find a job.
Entrepreneurial behaviour is also of paramount importance to our youth who have to battle hard to enter the job market. Entrepreneurial skill has become a crucial link between the individual and the job market in the sense that in modern times having a qualification is no longer the only prerequisite for finding a job. People, and especially our youth, need to be willing and able to act in an entrepreneurial way to create opportunities for themselves to enter the economy.
The reasons given here should be enough to encourage every person to enhance his or her personal entrepreneurial behaviour and for our country to promote and support entrepreneurial behaviour on all levels of society.
DeWet Schoeman is director of the USB-ED Centre for Applied Entrepreneurship. His main field of interest is to promote entrepreneurship among ordinary citizens, and especially the youth.