“How’s business?” is a phrase that kids in white South African homes commonly hear at family events and when friends come round for a braai. Not unusual in a society where entrepreneurship is common place.
But this is not the norm in black families.
According to a UCT Unilever Institute study, there has been a massive growth in the black middle class over the past decade: from 1.7mil to 4.2mil people with a spending power of R 400bn.
Black middle class
Jeremy Lang of Business Partners notes that there are more than 600 000 active SMEs in South Africa – and they account for more than 35% of SA’s GDP. More than 50% of people in formal jobs are employed by SMEs but our pool of entrepreneurs is only 12.8% versus 27% in similar economies. But “the black middle class aren’t becoming entrepreneurs, they are joining the corporates.”
“Apartheid [laws] systematically and purposefully restricted the majority of South Africans from meaningful participation in the economy. … access to skills and to self-employment was racially restricted. The accumulation process under Apartheid confined the creation of wealth to a racial minority and imposed underdevelopment on black communities. The result is an economic structure that today, in essence, still excludes the vast majority of South Africans.” explains the DTI BEE Strategy document.
Why so few black entrepreneurs?
Here’s the theory: many white ‘old school’ SA’s Greatest Entrepreneurs were hard scrabble, of-necessity entrepreneurs. Their grandchildren today are educated and connected and most importantly, entrepreneurship has been in their blood since they were knee-high to a cash register.
Black kids? Not so much.
Group Areas Act, 1965
B-BBEE helps a bit
As a result, the concept of starting and running your own business does not come naturally to many black South Africans. And because there are so few black role models to emulate, few people today aspire to being an entrepreneur. Although B-BBEE helps previously excluded people get access to the economy, it can’t instil in them that missing cultural capital necessary to want to ‘be your own boss’.
first published in SME South Africa
Doomed to fail or expect to succeed
Our national education system dooms 96 out of every 100 kids who enter grade one to no further education after matric. So the vast majority of ordinary South Africans will find it almost impossible to free themselves from dependence on social grants to climb the ladder to middle-class jobs. They are left to resent the entrepreneurial ‘foreign shop-owners’ who do make a go of it despite hostile conditions far from home and family.
To address this challenge, we need to recognise those who have broken the mould and embrace those that have done the unthinkable. Those few pioneers who have made entrepreneurship attractive for the unconventional thinkers and risk-takers in our country.
So, yes, the evil of apartheid IS to blame. But now that its shackles are off, are we doing what we should to help people realise that it’s good to take responsibility for your own economic success?
Click here if you want to discuss the part that apartheid has to play in an entrepreneur’s success.