The low level and quality of female entrepreneurship in South Africa is hampering entrepreneurial growth and activity, as well as the country’s economic development.
According to Nimo Naidoo, project manager of the Sanlam / Business Partners Entrepreneur of the Year® competition, the profile of South African entrepreneurs has remained largely unchanged in the recent past.
“Although female entrepreneurial activity participation has gradually increased in 2010, South Africa is still behind the curve when compared to other emerging economies as men are still substantially more likely to be involved in Small and Medium Enterprise (SME) development than women.”
Naidoo says the 2010 GEM Women’s Report – which gauges entrepreneurship in 59 countries – states that women are equally likely to view entrepreneurship as an attractive opportunity as men, but tend to doubt their own personal capacity and ability, which may be attributed to their lack of personal contact with other female entrepreneurs.
Where are our role models?
“Research shows that the probability of a woman becoming an entrepreneur is vastly improved when she is exposed to fellow female mentors and role models.”
She says female entrepreneurs tend to pursue small-scaled necessity-based entrepreneurship, predominantly in the informal sector. “The 2010 GEM Report stipulates that the key to unlocking potential economic growth and job creation is through investing in ‘opportunity entrepreneurs’ and not ‘necessity entrepreneurs’. Men are twice as likely to be involved in opportunity-based entrepreneurship when compared to women.”
The latest Labour Force survey, conducted by Statistics SA, indicates that the female unemployment rate of 26.5% is 4.7% higher than that of their male counterparts. Naidoo says it is therefore crucial that improved entrepreneurial attitudes among women are created in order to improve female employment rates.
Naidoo explains that most policy makers and academics commonly recognise entrepreneurship as a key ingredient that fuels economic growth and job creation. “Not only does entrepreneurship positively impact a country’s economy, but it improves the social well-being of the country. Research from the GEM report conclusively illustrates a direct link between the level of entrepreneurial activity and per capita income.”
Are we losing out?
She says that when women do not equally participate in entrepreneurship society loses out on the potential value that could have been derived by the entrepreneurial activity. “The current state of South African entrepreneurship is being magnified by the lack of female contribution in the sector.”
Naidoo explains that South African women are faced with an array of challenges that often hinder attempts at pursuing an entrepreneurial venture. “Many women in South Africa lack the necessary financial resources, education and experience to successfully create and develop self owned businesses.
“Contributing factors to the poor state of female entrepreneurship in South Africa could be related to family orientation, difficulty in accessing capital, insufficient education and a lack of external female networking.”
According to Malani Padayachee-Saman of MPA consulting engineers, South African women face many challenges as entrepreneurs.
Padayachee says that she would like to see more focus on business growth in South Africa, as the challenges that businesses face when moving from small or medium size to a larger size are very unique. “To encourage economic growth a supportive business environment needs to be developed in South Africa. Female entrepreneurs face an array of challenges when trying to move from small to medium or medium to large sized businesses.”
However, Padayachee-Saman’s positive and confident attitude has allowed her to overcome the obstacles she continuously faces as a business woman in South Africa. “Being part of a predominately male dominated environment comes with a whole host of challenges, but I personally believe that it is these challenges that have actually assisted with my growth, both as an engineer as well as an entrepreneur.”
Visit www.eoy.co.za for more information about The Sanlam / Business Partners Entrepreneur of the Year® awards.
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