Improving entrepreneurship in South Africa is dependent upon making information and resources more available to potential innovators. This is cited as a chief contributor to the consistently low level of entrepreneurship in this country, according to the findings of the 2006 Global Entrepreneurship Monitor (GEM) report. 

Produced by the University of Cape Town’s Graduate School of Business and sponsored by Standard Bank, Liberty Life, South African Breweries Limited and the National Research Foundation, the South African GEM report provides empirical data on the level of entrepreneurship in the country.
Indicating that while South Africa’s total early stage entrepreneurial activity (TEA) has remained relatively constant and relatively low over time, South Africa’s position in the GEM rankings has deteriorated over time despite improved macro-economic conditions in the country. The average TEA for participating countries is 9,43% while that of South Africa is just 5,29%. The GEM 2006 report has therefore focused on isolating the factors that contribute to this deterioration.
One of the most important findings is that South Africans lack the mindset and skills to become true entrepreneurs. The low levels of educational qualifications may be an important reason for this, while information availability remains relatively poor.
The GEM study categories entrepreneurs into necessity entrepreneurs and opportunity entrepreneurs. Melt van der Spuy, director of business support: Business and Private Banking at Standard Bank, points out that it is the latter category – entrepreneurs who identify and take advantage of business opportunities – who are likely to create employment for others and to grow wealth.
“It is also the view of Standard Bank that it is these entrepreneurs and the small to medium businesses they can and will create, which will drive change and improvement within the South African economy.”
Still, maintains van der Spuy, it is incumbent upon institutions such as banks to provide the necessary support and specialist services to both these groups. "On the one hand it is a question of providing easy access to basic instruments and tools such as financing options and mentorship programmes.
"On the other hand, the true entrepreneurs who are capable of building and contributing to the growth of our country need more sophisticated products and services, such as structured and leveraged finance, equity finance and so on. If entrepreneurs do not understand these options and tools, then we have a responsibility to educate them,” says van der Spuy.
While criticisms from the GEM report include the limitations of the education system, the restrictions of regulations and the difficulty in securing finance, Van der Spuy says true entrepreneurs do not take an approach of helplessness where resources or facilities are in short supply.
“The definition of an entrepreneur is someone who assesses the situation and environment presented to them, and then takes advantage of the scenario by applying their mind.”
Noting that education is a key factor in limiting TEA activity, van der Spuy says a holistic view of the situation in South Africa requires an examination of learning and training in this country. He believes improvement depends on an approach which has to go all the way back to the schooling system.
“Included in this is a coordinated effort between several stakeholders – including business, government, NGOs and donor organisations. The reality is that there are complexities and responsibilities involved in being self-sufficient, and the potential entrepreneur needs to be appraised of these to enable him or her to successfully initiate and run a business.”
Van der Spuy says it is crucial throughout education and training that entrepreneurs are encouraged to apply their minds rather than to depend on the expertise of external support.
“That goes to the essence of entrepreneurship. Not everyone is an entrepreneur. It is the individual who is willing to take a calculated risk to explore a market need with an idea which is sound and economically viable. The business plan is key in demonstrating this, and is required by prospective funders – be it a bank or private investors. Without justification and evidence that the idea has concrete potential, it is impossible for any institution to invest since the risks cannot be gauged.”