Survey reveals 5 of the biggest constraints faced by SA entrepreneurs
Skills deficit, limited access to markets and funding top the list
The top 25 constraints hindering the growth of startup and scale-up businesses in the country was the focus of recently released research by the SiMODiSA Association, an organisation that seeks to encourage public-private partnerships to advance entrepreneurship.
The survey, titled Accelerating the Growth of SMEs in South Africa was compiled in partnership with the Impact Trust, and endorsed by First National Bank (FNB), Omidyar Network Africa as well as the South African Venture Capital and Private Equity Association (SAVCA).
Matsi Modise, managing director of SiMODiSA says the survey provides "firsthand insights" into the main factors holding entrepreneurs back.
"We believe that the findings provide an outline of building an enabling ecosystem which will not only lead to a flourishing SMEs base but create sustainable jobs," she says.
Here are some of 5 the biggest cross-cutting entrepreneurship challenges as identified by the survey.
1. Skills Deficit
According to the survey there are insufficient numbers of institutions providing the necessary training and practical exposure required to support a thriving high-tech industry.
South Africa is lagging behind, particularly in the area of early stage angel investors. Significantly, the other underlying factor is that the country’s venture capitalist (VC) market is still in its infancy.
3. Remote location and limited access to markets
South Africa is relatively geographically remote, rendering access to international markets difficult for local entrepreneurs. There is also limited support for entrepreneurs to access markets via partnerships with corporates, mentors and networks providing ‘soft landing’ opportunities.
4. Government procurement limitations
SMEs should be able to access and bid on government procurement opportunities in a smooth and efficient manner. In the case of the High-Tech Entrepreneurship Model, this would more especially enable the application of tech entrepreneurship to solve service delivery problems.
5. Limited commercialisation of innovation from universities
South African universities are patenting many innovations in multiple fields. However, few are successfully commercialised and there are poor linkages and few elective relationships between academia and industry.