More than 70 per cent of Africans see entrepreneurship as a good career choice, with opportunity a far bigger driver for people starting their own businesses than necessity.
The figures are contained in the Global Entrepreneurship Monitor 2014 Global Report, for which Global Entrepreneurship Monitor (GEM) surveyed more than 206,000 individuals were surveyed across 73 economies, including Angola, Botswana, Burkina Faso, South Africa, Cameroon and Uganda.
It found 71.5 per cent of those surveyed in Africa generally considered entrepreneurship a good career choice, with the figure highest in Angola at 75.1 per cent. 77.6 per cent of Africans considered entrepreneurs to be of high status, with Angola again leading the way with 77.6 per cent. This was higher than elsewhere in the world, with only 56.9 per cent of Europeans, for example, believing starting a business was a good career move.
“Social values are an important part of the context in which individuals behave entrepreneurially or not. Starting a venture is seen as a good career choice mostly in African economies, while individuals in the European Union show the lowest level in this regard,” GEM said.
“Entrepreneurs in African and North American economies share the value of high status to successful entrepreneurs, which indicates that there is an entrepreneurial culture in those economies. This is additionally supported by high media attention for entrepreneurship.”
The report also found entrepreneurship in Africa is generally driven by opportunity rather than necessity. 71 per cent of Africans surveyed said their starting a business was opportunity-driven, as opposed to 26.3 per cent that said it was necessity-driven.
“Entrepreneurship is acknowledged as a driver of sustainable economic growth as entrepreneurs create new businesses, drive and shape innovation, speed up structural changes in the economy, and introduce new competition – thereby contributing to productivity,” the report said.
“Entrepreneurship can drive job creation and contribute to economic growth that is inclusive and reduces poverty. With young people being disproportionately affected by unemployment, policymakers and governments throughout Africa are ensuring that inhabitants have access to sustainable livelihoods.”
Governmental policies and internal market dynamics in Africa are better evaluated than in North America, while the dominant reason for discontinuation of the venture is lack of profitability. It also found African businesses tended not to be very internationalised, with almost 70 per cent of early-stage entrepreneurs not having a customer outside their respective countries. The exception is South Africa, where 26 per cent of early-stage entrepreneurs have more than 25 per cent of their customers abroad.
There were, however, some words of warning for South Africa in terms of the amount of entrepreneurship taking place in the country.
“With the advent of democracy in 1994, entrepreneurship, SMME development and job creation became a priority in South Africa as many of its people, particularly African blacks, were precluded from the skilled job market and from starting their own businesses other than in restricted areas,” the report said.
“South Africa’s early-stage entrepreneurial activity is very low (six per cent-10 per cent), especially when compared to other developing countries such as those in South America. Further studies showed that education plays a major role in entrepreneurial activity in that the more educated the person, the more likely that person is to start a business and that the business continues to be sustainable. This finding emphasised the need for training in South Africa, particularly amongst the youth where unemployment continues to increase year-on-year.”
Source: Disrupt Africa
Book your seat here.
Join the discussion here.