Article by Wiseman Khuzwayo

SOUTH AFRICA needs to find more ways to support and nurture entrepreneurs if the country is to avoid becoming a backward welfare state, where handouts risk draining the country’s innovative talent and its ability to produce equitable growth and employment.

This is according to Endeavor South Africa, which is part of a global non-profit organization that identifies and supports innovative, high-growth entrepreneurs in emerging markets.

Endeavor SA and First National Bank will be hosting the second summit on the state of entrepreneurs in Cape Town during Global Entrepreneurship Week (GEW).

GEW is an initiative in which millions of people and corporate around the world join a growing movement of entrepreneurial people to generate new ideas and to seek better ways of doing things.

Malik Fal, the managing director of Endeavor SA, said South Africa’s economy had structural imbalances that needed to be addressed.

He said the situation was dire. Citing statistics from the SA Revenue Service, Fal said about 6 million taxpayers were subsidizing nearly 14 million social grant beneficiaries.

More than 4.3 million were unemployed out of an active population of about 15 million.

Endeavour SA said the burden was passed onto business to sustain those not working. However, just 300 000 of the country’s businesses employ five or more people, according to the FinScope 2010 South Africa Small Business Survey.

Added to this, South Africa is doing poorly in its ability to foster successful and sustainable new businesses.

It is ranked well behind fellow emerging countries such as Brazil and Chile, where entrepreneurs are starting up enterprises at more than triple the rate of start-ups in South Africa, according to the 2009 report by the Global Entrepreneurship Monitor.

“It is clear something has to be done as more South Africans, both inside and outside the government, add their name to a chorus of those that believe the country’s support to small businesses has failed to make any meaningful impact,” the organization said.

Endeavour SA said the only way out was to find better ways to foster and support entrepreneurs, particularly those starting high-growth companies.

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