One of the main engines of growth in an economy is entrepreneurship. South Africa needs more young entrepreneurs to start new ventures that will create job opportunities, develop innovations and stimulate economic activity. Young entrepreneurs are national assets that need to be cultivated and rewarded to improve the lives of all South Africans.
The youth need to stay in South Africa and use their creative business ideas to not only uplift themselves but also to empower fellow South Africans. To start a business in South Africa is as a patriotic duty as drinking a Castle Lager.
Importance of Entrepreneurs in the South African Economy:
- Entrepreneurs Create New Wealth:
It is argued that increasing the economic pie, rather than dividing it, creates economic growth and thus improves the standard of living for all. Entrepreneurship generates new wealth and, in turn, makes the South African economic pie bigger. This new wealth increases the tax base, leading to higher government spending. That means more RDP houses, schools, roads and hospitals.
2. Entrepreneurs Improve the Quality of Life:
The creation of new wealth results in new job avenues being created both in a direct and indirect sense. Jobs are created directly through direct employment in the new business. The increase in disposable income means people spend more on goods and services, leading to a ‘multiplier effect’ of job creation in other areas of the economy. Entrepreneurship is thus a powerful tool in addressing poor standards of living.
3. Entrepreneurship Stimulates Regional Development:
Entrepreneurs setting up businesses and industrial operations in areas that are rural or regarded as ‘developmentally backwards’ bring about improvements in infrastructure in the area. The increase in economic activity in these areas attracts more job seekers into the area, leading to the need to build roads, stable water and electricity supply, rail links, schools, hospitals and other crucial public services.
4. Entrepreneurship Creates Lucrative Export Markets:
Small start-up businesses will eventually grow big enough to target the export market, as a way of diversifying and boosting its revenue streams. Exports are vital for a country’s economic development, as it brings in foreign currency inflows and exposes businesses to more efficient production methods and technology. More money coming in, coupled with cutting-edge technology allows local businesses to improve the way they operate, thereby increasing their global competitiveness and growing larger.
5. Entrepreneurship Contributes Towards Community Development:
When an entrepreneur’s business is profitable, they often give back to the community through investing in community projects and donating funds to charities. Entrepreneurs also give back by supporting like-minded people in their ventures. There are many world-famous entrepreneurs that have used their wealth to finance good causes, such as Bill Gates. As Investopedia.com puts it; “The qualities that make one an entrepreneur are the same qualities that motivate entrepreneurs to pay it forward.”
The bottom line is that entrepreneurship and economic growth are positively related to each other. It is up to young, aspiring entrepreneurs in South Africa to do more than just earn enough money to buy that Jaguar or a villa in Camps Bay. Entrepreneurship has the capacity to change the lives of the economically neglected. This is a massive responsibility for young entrepreneurs and so we need to call on policymakers to create an environment that is conducive for entrepreneurship in South Africa.
Written by Stephen Thring (MSS Economics; Project Manager at Funding Connection Pty Ltd)