A general business environment plagued by negativity makes things tough for local entrepreneurs.
There has been a marked decrease in entrepreneurial activity in SA in recent years, especially in comparison to other emerging economies. This is, in part, due to a lack of an entrepreneurial culture in the country. We also have one of the highest business failure rates in the world - at 75% - and there is a shortage of support for marginalised groups of society who need help to start new endeavours and make these a success.
Sharing the findings of a PwC emerging companies survey, Maija de Rijk-Uys, head of PwC Accelerator, and Alexandra Fraser of the Silicon Cape Initiative, outlined the nature of the SA small business and start-up landscape and discussed what needs to be done.
"The survey focused on tech-enabled businesses. These are businesses that are using technology to be innovative and to create new products and services in SA," said Fraser, continuing that the term "tech-enabled" was used because ICT and technology are increasingly becoming enablers of new businesses and new business models.
Some of the challenges the survey unveiled included gaining access to markets and customers, cash constraints and difficulties as a result of labour legislation and red tape.
But there is good news, the pair noted, stressing we have to focus on the positives in order to support innovation in SA. What many forget, stated De Rijk-Uys, is that SA is one of the two largest economies on the African continent and is outdoing many of its emerging economy counterparts.
In addition to this, there are many budding pockets of innovation springing up, which have the potential to be real game changers in SA, she continued. Digitisation emerged as a major trend and it is quite evident that the rate of adoption of technological innovation is skyrocketing, which affects how start-ups enter the market and tailor their offerings to fit into this digital business space. The surveyed emerging companies anticipate that more than half of their revenue will be derived from online sales channels.
These tech-enabled high growth businesses really do have the ability to create new economies and aid job creation in SA, said Fraser. What they need is funding and they need to partner with the right people in order to develop their creative ideas into innovative solutions.