Entrepreneurship in South Africa is tinged with the ideology of classifying the ability of individuals with the pigmentation of one's skin color. Blacks have for centuries been regarded as drawers of water and hewer of wood and only to occupy designated occupations. And, white supremacist propaganda stated that blacks were not attuned to understanding the complexities of business. The spread of the apartheid gospel in 1948 to discourage entrepreneurship in the black community was further aggravated by the introduction of a myriad of legal barriers, which confined blacks in designated areas which were lacking basic social amenities like shopping centers and skills training facilities (Smollen, et al, 1986).
The consequent of the previous policies encouraged and promoted a culture of dependency in the black community throughout South Africa. By implication job creation was viewed as a government's (read white man) burden. As the political views of the previous government spread its tentacles to every fibre of the society of South Africa, they then manifested themselves as impediments that were to prevent blacks from starting businesses, or even thinking of starting employment and wealth creating ventures for themselves. On one hand, the financial institutions and white businesses went along with the policies of the government and failed to assist blacks that demonstrated talent of entrepreneurship.
On the other hand, the white academicians reinforced the notion that blacks are cultural not inclined to business by advancing nefarious theories that ignored particularly the history of black people in South Africa, and Africa in general. This manifestation of the lack of strong business inclination and the culture of enterprise need and entrepreneurship cannot be addressed by the markets because they lack the capacity and the drive to foster such ideals to the black population, only the state can intervene directly.
The 1945 Bantu Urban Consolidation Act recommended that there was no need to encourage the emergence of a Black capitalist class in the urban areas. Black urban entrepreneurs were only restricted to supplying only the daily essential requirements of their community (Smuts, 1986: 25). In spite of that, there were exceptions. The Business Report (2000: 2) reporting on the success of a pioneering Black cane furniture manufacturer Mr. Shikwane, who triumphed against adversity and apartheid humiliation states that: ''During the heights of apartheid blacks were not allowed to own manufacturing businesses in Soweto and other ''White areas''. But Shikwane defied the authorities and started a manufacturing concern in Orlando. However, during the forceful removals and relocation of blacks in early 1970's Mr Shikwane and Mr Kgabo, leather product manufacturers, were forced out of the urban areas. They became the only two successful black pioneer manufacturers operating in the homelands of Bophuthatswana and Venda respectively (Potgieter 1979: 13).
However, the plight of black entrepreneurs has not changed for the better since 1976, when the then Nationalist Party government lifted the ban on the type and the number of businesses that may be operated by blacks. The SA Development Monitor (1998: 9) is of the opinion that the current policies have not yet adequately addressed the demise of the true black entrepreneurs in the township because most township entrepreneurs are long on energy and enthusiasm but short on credentials. They also lack the universal perspective of exploiting the niche markets and the comprehension of markets beyond their neighbourhood. Therefore, the starting point for any policy would be to address the fundamental problems of entrepreneur education before offering added solutions.
Sunday, September 27, 2009
THE AFRICAN ENTREPRENEURSHIP EXPERIENCE PART1
According to Smuts (1986: 10) the concept of entrepreneurship is alien in the traditional Bantu society and to the African culture in general. The introduction of business activities in Black society came about as a result of contact with Western culture. McMarthy (1998: 429) opines that because indigenous entrepreneurial classes and a dynamic private sector did not exist, and also since dependence (in the case of African states) on foreign investors was to be avoided, the state assumed the role of entrepreneur. However, there is no evidence to suggest that, once contact had been made, there has never been a shortage of Black South Africans who were not prepared to take business risks (Smuts, 1986: 12).
Smuts and McMarthy's assumptions are however refuted by Caputo (2001: 106 - 118) who states that “for more than 2000 years Africans traded with the Arabs, Indians and Chinese along the Indian Ocean, from Mogadishu to Mozambique. By 1000 AD Africans from the interior settled on the eastern coast to farm and fish; they later adopting Islam from Arab traders. The African converts to Islam became known as the Swahilis. These Swahilis later became leading traders, and consummate middlemen, who sold gold, ivory and slaves to Asian merchants whose ships arrived on monsoon winds.''
According to the World Bank (1989: 136) two important items of intra-African trade was salt and iron, which were not only relatively scarce but were also restricted in limited locations. Iron and iron working skills also formed the basis for intra-trade because they were in demand and rather scarce. Furthermore, the World Bank states that entrepreneurship has a long history in the Sub-Saharan Africa. In the tenth century, before the continent of Africa was discovered there were free markets at Timbuktu, Salaga, Kano and other routes of Trans-Saharan trade up to the present day Zimbabwe, where archeological evidence indicates that mining activities were linked to Arab export market on Africa's Southeastern coast.
In the latter years, slavery and colonization impeded the rate of growth of entrepreneurship amongst Blacks in South Africa and in the rest of the African Continent because of the usurpation of fertile agricultural land by the colonial masters (Moll, 1991: 152). Agriculture was the main engine of economic growth in the developed world during the last fifty-three years (Drucker 1978: 5). Peter Drucker's statement simply means that the coterie of black entrepreneurship and the basis of wealth were wiped out during the process of colonization. Therefore, it cannot be denied that the decline of African entrepreneurs was also impeded during the balkanization of Africa, and was further aggravated by African bureaucrats during post-independence by introducing and implementing ill-conceived development policies, which favored large-scale enterprises over indigenously owned and operated businesses (Vosloo, 1994a: 120).
According to the World Bank (1989: 136) two important items of intra-African trade was salt and iron, which were not only relatively scarce but were also restricted in limited locations. Iron and iron working skills also formed the basis for intra-trade because they were in demand and rather scarce. Furthermore, the World Bank states that entrepreneurship has a long history in the Sub-Saharan Africa. In the tenth century, before the continent of Africa was discovered there were free markets at Timbuktu, Salaga, Kano and other routes of Trans-Saharan trade up to the present day Zimbabwe, where archeological evidence indicates that mining activities were linked to Arab export market on Africa's Southeastern coast.
In the latter years, slavery and colonization impeded the rate of growth of entrepreneurship amongst Blacks in South Africa and in the rest of the African Continent because of the usurpation of fertile agricultural land by the colonial masters (Moll, 1991: 152). Agriculture was the main engine of economic growth in the developed world during the last fifty-three years (Drucker 1978: 5). Peter Drucker's statement simply means that the coterie of black entrepreneurship and the basis of wealth were wiped out during the process of colonization. Therefore, it cannot be denied that the decline of African entrepreneurs was also impeded during the balkanization of Africa, and was further aggravated by African bureaucrats during post-independence by introducing and implementing ill-conceived development policies, which favored large-scale enterprises over indigenously owned and operated businesses (Vosloo, 1994a: 120).
Smuts and McMarthy's assumptions are however refuted by Caputo (2001: 106 - 118) who states that “for more than 2000 years Africans traded with the Arabs, Indians and Chinese along the Indian Ocean, from Mogadishu to Mozambique. By 1000 AD Africans from the interior settled on the eastern coast to farm and fish; they later adopting Islam from Arab traders. The African converts to Islam became known as the Swahilis. These Swahilis later became leading traders, and consummate middlemen, who sold gold, ivory and slaves to Asian merchants whose ships arrived on monsoon winds.''
According to the World Bank (1989: 136) two important items of intra-African trade was salt and iron, which were not only relatively scarce but were also restricted in limited locations. Iron and iron working skills also formed the basis for intra-trade because they were in demand and rather scarce. Furthermore, the World Bank states that entrepreneurship has a long history in the Sub-Saharan Africa. In the tenth century, before the continent of Africa was discovered there were free markets at Timbuktu, Salaga, Kano and other routes of Trans-Saharan trade up to the present day Zimbabwe, where archeological evidence indicates that mining activities were linked to Arab export market on Africa's Southeastern coast.
In the latter years, slavery and colonization impeded the rate of growth of entrepreneurship amongst Blacks in South Africa and in the rest of the African Continent because of the usurpation of fertile agricultural land by the colonial masters (Moll, 1991: 152). Agriculture was the main engine of economic growth in the developed world during the last fifty-three years (Drucker 1978: 5). Peter Drucker's statement simply means that the coterie of black entrepreneurship and the basis of wealth were wiped out during the process of colonization. Therefore, it cannot be denied that the decline of African entrepreneurs was also impeded during the balkanization of Africa, and was further aggravated by African bureaucrats during post-independence by introducing and implementing ill-conceived development policies, which favored large-scale enterprises over indigenously owned and operated businesses (Vosloo, 1994a: 120).
According to the World Bank (1989: 136) two important items of intra-African trade was salt and iron, which were not only relatively scarce but were also restricted in limited locations. Iron and iron working skills also formed the basis for intra-trade because they were in demand and rather scarce. Furthermore, the World Bank states that entrepreneurship has a long history in the Sub-Saharan Africa. In the tenth century, before the continent of Africa was discovered there were free markets at Timbuktu, Salaga, Kano and other routes of Trans-Saharan trade up to the present day Zimbabwe, where archeological evidence indicates that mining activities were linked to Arab export market on Africa's Southeastern coast.
In the latter years, slavery and colonization impeded the rate of growth of entrepreneurship amongst Blacks in South Africa and in the rest of the African Continent because of the usurpation of fertile agricultural land by the colonial masters (Moll, 1991: 152). Agriculture was the main engine of economic growth in the developed world during the last fifty-three years (Drucker 1978: 5). Peter Drucker's statement simply means that the coterie of black entrepreneurship and the basis of wealth were wiped out during the process of colonization. Therefore, it cannot be denied that the decline of African entrepreneurs was also impeded during the balkanization of Africa, and was further aggravated by African bureaucrats during post-independence by introducing and implementing ill-conceived development policies, which favored large-scale enterprises over indigenously owned and operated businesses (Vosloo, 1994a: 120).
THE AFRICAN ENTERPRENEURSHIP EXPERIENCE PART 2
The above discussion established that South Africa has a very low enterprise density. Only 2 per cent of the South African population are entrepreneurs as compared to an average of 10 per cent elsewhere in the world (Ntsika, 1997). In comparison with a selected sample of the developing economies particularly that of three neighbouring states of Southern Africa, namely Lesotho, Swaziland and Zimbabwe have on average a higher enterprise density than South Africa.
The low number of enterprises in South Africa can be attributed to the previous policies that were not in favour of individual initiatives in business, but were more inclined to favour large corporations and big businesses. This can also be attributed to the policies of apartheid, which restricted non-whites from owning and operating businesses in designated urban areas. The low number of enterprises does not augur well for solving the current nagging problem of unemployment, especially in the black communities, both in the urban and rural areas of South Africa.
However, culture is a missing concept in the theory of entrepreneurship and economic development. Moreover, it has led wittingly or unwittingly to a tendency that has come to be known as the ''Eurocentric or paternalistic approach to development''. This is true where there has been a historical incident of colonialism as is the case in South Africa, and Africa where the previous colonial governments created a black underclass, which was robbed of role models from which the young generation could be inheriting entrepreneurial skills.
It is therefore concluded that the SMMEs sector could play a vital role in the economy by creating the much-needed jobs, and thus help in the alleviation of poverty and in facilitating the distribution of income. As Smuts stated above: "There should be no restrictions relating to the provision of resources and know-how; in particular, there should be no distortions and imperfections in the market for capital, (skilled) labour, and essential facilities such as transport, utilities and business premises.''
The low number of enterprises in South Africa can be attributed to the previous policies that were not in favour of individual initiatives in business, but were more inclined to favour large corporations and big businesses. This can also be attributed to the policies of apartheid, which restricted non-whites from owning and operating businesses in designated urban areas. The low number of enterprises does not augur well for solving the current nagging problem of unemployment, especially in the black communities, both in the urban and rural areas of South Africa.
However, culture is a missing concept in the theory of entrepreneurship and economic development. Moreover, it has led wittingly or unwittingly to a tendency that has come to be known as the ''Eurocentric or paternalistic approach to development''. This is true where there has been a historical incident of colonialism as is the case in South Africa, and Africa where the previous colonial governments created a black underclass, which was robbed of role models from which the young generation could be inheriting entrepreneurial skills.
It is therefore concluded that the SMMEs sector could play a vital role in the economy by creating the much-needed jobs, and thus help in the alleviation of poverty and in facilitating the distribution of income. As Smuts stated above: "There should be no restrictions relating to the provision of resources and know-how; in particular, there should be no distortions and imperfections in the market for capital, (skilled) labour, and essential facilities such as transport, utilities and business premises.''
IS ENTREPRENEURSHIP AND INNOVATION ALIEN TO THE AFRICAN INTELLGENTSIA
It is not uncommon to read from Eurocentric authors that the concept of entrepreneurship is alien in the traditional Bantu society and to the African culture in general. the above-mentioned assumption is based on the demonstrable lack of indigenous entrepreneurial classes and a dynamic private sector that is predominately African. This assumption is also coupled to the overwhelming dependence on foreign investors by Sub-Saharan Africa governments, who are advised by big Western University educated Africans to assume the role of entrepreneur through ill conceived state enterprises that are unproductive and poorly managed by political lackeys and ruling party loyalists.
There is also a perception, or an almost religious belief by Africans that entrepreneurship in general and big business in particular is a sole preserve of non-Africans. Modern Africans who are highly educated tend hero worship Western culture and consumption practices without attempting to emulate and adapt and implement Western ways of doing things in their respective countries. Most Africans, educated and also illiterate, tend to think that the introduction of business activities in Africa, and in the Black society in particular came about as a result of contact with Western culture. (See contrary views on 'The African Entrepreneurship Experience' Part 1-3 above).
The African intelligentsia in particular has a propensity to boast about their academic qualifications from big Western universities as opposed to boasting about tangible and epoch making achievements or innovation. It seems that theory and practice is divorced and unrelated as far as the African intelligentsia is concerned. Proof: since independence two generations ago, not a single Western educated and so-called African intellectual/ scientists have made attempts to find a solution to the biggest life threats in Africa, namely the mosquito and the tsetse fly. Or a better tool to replace the traditional hoe that been in use by african peasants to till the soil for centuries. How can Western African mechanical engineers and scientists be so hopeless in comparison?
By contrast, the Harvard or Oxford educated Western and Eastern peers of the African intelligentsia have made numerous significant achievements for the past decades both as innovators and entrepreneurs. Today we use the internet- which was conceived by predominately western based Harvard university students- almost exclusively for communication and business. Unfortunately, there is nothing of significance that has been conceived by Western big colleges or Harvard educated African brothers. There is a direct and visible lack of confident and independent thinking from Western educated (outside the African borders) African brothers.
As you finish reading this article, the Harvard educated Western peers of the Africans will have raked in a few millions into their bank accounts by using ideas they read from the same text books the African intelligentsia only boast about. How ironic.
Africa is beckoning with great opportunities waiting to be exploited.
Western educated brothers please stop boasting about your degrees. Put them to real use, and boast about life changing ideas you have put on the table. Be innovative. Become the next big thing. Better, become the next millionaires through practical ideas.
By P .Ngcamu
There is also a perception, or an almost religious belief by Africans that entrepreneurship in general and big business in particular is a sole preserve of non-Africans. Modern Africans who are highly educated tend hero worship Western culture and consumption practices without attempting to emulate and adapt and implement Western ways of doing things in their respective countries. Most Africans, educated and also illiterate, tend to think that the introduction of business activities in Africa, and in the Black society in particular came about as a result of contact with Western culture. (See contrary views on 'The African Entrepreneurship Experience' Part 1-3 above).
The African intelligentsia in particular has a propensity to boast about their academic qualifications from big Western universities as opposed to boasting about tangible and epoch making achievements or innovation. It seems that theory and practice is divorced and unrelated as far as the African intelligentsia is concerned. Proof: since independence two generations ago, not a single Western educated and so-called African intellectual/ scientists have made attempts to find a solution to the biggest life threats in Africa, namely the mosquito and the tsetse fly. Or a better tool to replace the traditional hoe that been in use by african peasants to till the soil for centuries. How can Western African mechanical engineers and scientists be so hopeless in comparison?
By contrast, the Harvard or Oxford educated Western and Eastern peers of the African intelligentsia have made numerous significant achievements for the past decades both as innovators and entrepreneurs. Today we use the internet- which was conceived by predominately western based Harvard university students- almost exclusively for communication and business. Unfortunately, there is nothing of significance that has been conceived by Western big colleges or Harvard educated African brothers. There is a direct and visible lack of confident and independent thinking from Western educated (outside the African borders) African brothers.
As you finish reading this article, the Harvard educated Western peers of the Africans will have raked in a few millions into their bank accounts by using ideas they read from the same text books the African intelligentsia only boast about. How ironic.
Africa is beckoning with great opportunities waiting to be exploited.
Western educated brothers please stop boasting about your degrees. Put them to real use, and boast about life changing ideas you have put on the table. Be innovative. Become the next big thing. Better, become the next millionaires through practical ideas.
By P .Ngcamu
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