It is now more than 30 years since top management guru Peter Drucker argued for a shift toward an entrepreneurial society. Drucker challenged executives to make innovation and entrepreneurship a “normal, ongoing everyday activity.” As Julian Birkinshaw, a professor of strategy and entrepreneurship at London Business School asserts in the online publication SA Business Index, this type of thinking on entrepreneurship requires a fundamental change in mindset.
Sadly, and to our detriment here in South Africa, it is clear that we have a long way to go before this paradigm shift occurs in our country. Universities and colleges prepare students to become managers and professionals working for big corporations. At best some universities in their economics and management faculties have a small sub-section called entrepreneurship intended to prepare entrepreneurs for the future while the rest of faculty is seen as the mainstream academics preparing students to enter big business. When they do enter big business, they are confronted with the reality of retrenchment and down-sizing. It is already a fact that entrepreneurial activity in South Africa is less developed than in other countries. And with almost 27% unemployment South Africa is not in a position to afford poor entrepreneurial activity.
Having said that, South Africa as a country is blessed with great entrepreneurs – Richard Maponya, Whitey Basson, Christo Wiese, Patrice Motsepe, Raymond Ackerman, Brian Joffe and many others. Yet, we still need to replicate these success stories to create a critical mass of entrepreneurs. Also, given our economic climate, creating many small businesses is not enough. We need to convert small business, into medium business, into big business. All large companies started off as one-person shows. Now is the time to grow small business into medium business to create more job and growth opportunities.
It is clear that leading competitive nations worldwide flourish on entrepreneurship. Top countries have realised that if you want your economy to be successful, you need thriving entrepreneurs. It is therefore not surprising that some of the world’s top global companies come from the most competitive nations such as the United States of America – just look at the phenomenal success of companies like Facebook, Google, and Microsoft to see the success of a country driving economic success on entrepreneurship. Closer to home, Rwanda is now the leading nation in Africa in terms of opening opportunities for entrepreneurs. Almost all barriers to opening a business have now been removed and it is possible to open a business 24 hours a day in Rwanda – this is real commitment to supporting entrepreneurs to start up and become successful in the shortest possible time.
Talent is the new currency in the modern business environment. In fact, we are now making the transition from knowledge economies to talent economies. A talent economy is one in which talent drives economic activity as we have seen in the Silicon Valley. In South Africa, Cape Town has evolved into a talent hub driving information technology, tourism, retail, insurance, call centres and other talent focus areas as the centre of economic activity. In Johannesburg, Sandton is a talent hub, and in recent times, Rosebank and Pretoria East have established themselves overnight as talent hubs being driven by the best-qualified talent making things happen in these talent centres.
However, talent economies do not happen automatically: they need an environment conducive to experimentation, creativity, innovation and growth. Ideas can only be converted to sustainable businesses if the environment is supportive and enabling of such initiatives. The following actions can play a significant role in driving entrepreneurial talent:
- Teach children at a young age about entrepreneurship and business opportunities;
- Create opportunities and competitions for business ideas to be recognised and supported;
- Make entrepreneurship part of school and university curriculums;
- Build strong funding opportunities for entrepreneurs to support the start-up phase of their businesses;
- Conduct research to support good practice in entrepreneurship; and
- Train entrepreneurs in the skills they need to be successful entrepreneurs.
In essence, we need to elevate talented individuals and drivers of business and entrepreneurial activity in South Africa. If we succeed in the quest for entrepreneurship, business will be able to grow and we will empower ourselves to drive talent economies with talented entrepreneurs at the centre of a dynamic business environment. Once a true talent economy is established, more entrepreneurs will be attracted to the new talent economy and we will begin to see business success being replicated in different parts of the country and continent. But to make this work, we need to put entrepreneurs at the centre of talent economies and drive business activity around them. Thus, a paradigm shift is needed away from the industrial economy, to the knowledge economy to the talent economy. Let us all be change agents and catalysts for driving the new talent economy.