The Rush to Mass Entrepreneurship

Imagine walking through a bustling mall, surrounded by thousands of shoppers. Among these individuals, who would you guess is an entrepreneur? The reality is, identifying an entrepreneur in this crowd is as random as the way many incubators select participants for their programs. This analogy highlights a critical flaw in South Africa’s entrepreneurial ecosystem: the mistaken belief that everyone can and should be an entrepreneur.

The Myth of Universal Entrepreneurship

South Africa’s push to process as many individuals as possible through entrepreneurial programs is well-intentioned but fundamentally flawed. Here are three key reasons why this approach is misguided:

1. Not Everyone is Cut Out to be an Entrepreneur Entrepreneurship requires a unique mental stance and motivation that not everyone possesses. Research shows that personality traits like resilience, risk tolerance, and proactivity are crucial for entrepreneurial success. Forcing everyone into this mold can lead to frustration and failure, rather than fostering genuine entrepreneurial success (Rauch & Frese, 2007).
2. Timing is Crucial Not everyone is ready to become an entrepreneur at the same time. Life circumstances, personal development, and market conditions all play a role in determining the right moment to embark on an entrepreneurial journey. Unfortunately, current programs often fail to assess whether individuals are truly ready, leading to premature and often unsuccessful ventures (Gartner, 1989).
3. The Curriculum Conundrum There is a pervasive belief that a structured curriculum can produce successful entrepreneurs. However, studies show that there is little correlation between curricular learning and entrepreneurial success. Real-world experience, resilience, and adaptability are far more critical. Yet, many programs continue to rely heavily on traditional educational methods, missing the mark on what truly cultivates entrepreneurial talent (Martin, McNally, & Kay, 2013).

The Randomness of Entrepreneurial Success

Returning to our mall analogy, the likelihood of randomly identifying an entrepreneur among shoppers is akin to the way many incubators select participants. This randomness underscores a deeper issue: the entrepreneurial ecosystem’s failure to effectively uncover and nurture true entrepreneurial potential. This potential can only emerge from the individual themselves. The Global Entrepreneurship Monitor (GEM) measurement of our national entrepreneurial mind shows South Africans believe that opportunities abound and that we have the skills to deliver. Yet, the same data shows our inate fear of failure as being higher than that of other nations. So, is the question then not where are our entreprenuers but rather who are they? Should we ask this of others or should they ask it of themselves? Getting people to ask I suspect the latter. Encouraging everyone to ask "Am I?" is a key point of departure. Once known and the pathway chosen and decided, then the individual can dive into the spectrum of support and development processes available from our entrepreneurial ecosystem

The Stagnant Established Business Ownership Rate

Despite numerous initiatives and programs, South Africa’s Established Business Ownership Rate (GEM) has remained stagnant for decades. This stagnation suggests that the current ecosystem is not effectively fostering long-term, sustainable businesses. Instead, it often churns out a high volume of startups with low survival rates (Herrington & Kew, 2016).

A Personal Observation: The Inhlanyelo Hub

I’ve had the privilege of working with The Inhlanyelo Hub, an incubator based within UNISA, Africa’s largest university, since its early inception, from April 2023. The Inhlanyelo Hub is taking a different approach by focusing on quality over quantity. Programme Manager Phumelele Mokena calls this approach the "Inhlanyelo Way". They carefully select individuals who demonstrate genuine entrepreneurial potential and readiness, providing them with an experiential real-world learning experience and long-term mentorship. This targeted approach is a refreshing change and a step in the right direction for fostering sustainable entrepreneurship. What is stunningly special is that the selection process starts with the Ideation phase of enterprise, with seeds that have not yet even sprouted, not yet even visible to either their creators or to the programme delivery team. If you are going to farm you need to plant seedlings. Right?

A Call for a More Targeted Approach

To truly transform the entrepreneurial landscape, we need a more targeted approach. This means:

• Selective Support: Focusing resources on individuals who demonstrate genuine entrepreneurial potential and readiness (Shane, 2003).
• Real-World Learning: Emphasizing experiential learning over traditional curricula to better prepare entrepreneurs for real-world challenges (Politis, 2005).
• Long-Term Mentorship: Providing ongoing support and mentorship to help entrepreneurs navigate the complexities of building sustainable businesses (Sullivan, 2000).

I suggest that the South African entrepreneurial ecosystem subtly shift from a quantity-driven approach to a quality-focused strategy. Especially the semi-state institutions. By recognizing that not everyone is suited for entrepreneurship, assessing readiness more effectively, and moving beyond curricular constraints, we can create a more robust and successful entrepreneurial environment. Only then can we hope to see a significant change in the Established Business Ownership Rate and foster a new generation of resilient, innovative entrepreneurs at the scale and quality needed to effect change at a national level.