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ACT hosted visionary leadership

Posted on 18 May 2013 by Thandisizwe Mgudlwa

Thandisizwe Mgudlwa

“It is only through collaboration between education, innovation and business that we will be able to take our country forward and make Cape Town a global African city of inspiration and innovation.”

So said Chris Whelan, CEO of business think-tank Accelerate Cape Town, at Friday’s Accelerate Cape Town Member’s Meeting sponsored by Deloitte. Whelan, who heads up the business organisation that counts more than 45 of South Africa’s largest corporates among its members, added that it is critical that innovation is approached as a collaborative effort. “Whether we’re developing a new product or building a future society, the key to unlocking our success as a city and country is innovation and partnership.”

According to the AC, TWhelan was joined by Dr Vincent Maphai, a business leader  and former Chairman of BHP Billiton Southern Africa. Maphai who also acts as the Education Commissioner on the National Planning Commission, detailed the key requirements for growing talent in the country in terms of what inspired the thinking of the NPC.

Maphai said that in democracies, the government is a reflection of its society. “If we are unhappy about our government’s actions, we must remember that we as civil society elected them to their positions of power. For us to succeed as a nation and be able to become the shapers of our future, we need to step up and start taking our role in the country very seriously.”

He added that active citizenry should be combined with strong leadership in order to create a government that is able to take decisions that they can also implement. “Madiba is a perfect example. His views were not based on scoring political points or promoting his own interests, but rather on what is best for the country as a whole.” Challenge of job creation and lack of education.

Maphai said that the NPC is faced with a massive dual challenge of creating jobs while also overcoming the struggling education system. He stated that while he’s in favour of the current Outcome Based Education system, the country is in dire need of well-trained, committed teachers.

“We don’t have enough skilled workers in the country, and the skills that are available come with a hefty price tag. Until we attend to the mess in education, we can forget about dealing with the issues of inequality that the unions keep talking about.”

According to Maphai, there are ways in which to bring positive change to the country. “If you’re a major company like SAB, you are fortunate enough to have a strong supply chain that enables you to train people and empower them to come and work for you. This is one contribution to addressing the disaster we are facing of a shrinking tax base and growing social grants handouts. But we should also look at requiring the individuals who receive social grants to run the gardens and bake bread in schools and then utilise the money allocated to school feeding on more important items.

“In this country, we don’t need more money or resources, of which we have more than enough. Instead, we need greater resourcefulness, especially in the form of political and social innovation.”

Maphai was joined by Dr Julius Akinyemi, head of the MIT Media Laboratory and chief adjudicator of the Innovation Prize for Africa. Akinyemi said that the mission for schools is to educate students and create new capabilities, but added that most schools fail woefully on the latter aspect. “Innovation is the enabler for creating new capabilities, allowing you to make a social impact by improving efficiencies in the environment or the lives of individuals. This focus on innovation creates an entrepreneurial environment that is very nurturing and empowering to people, leading the creation of businesses, jobs and an environment that enables us to move forward.”

He said that, in terms of the state of innovation in Africa, the problem lies not with a lack of innovation but rather in creating a nurturing environment that allows innovators to be productive. “Businesses have an important role to play. Joint innovative development, for example, creates an opportunity for the research and development team to collaborate and work side by side with businesses, incubators and venture funds in a highly productive environment. A perfect example of this model in action is Workshop 17, the University of Cape Town Graduate School of Business innovation hub based at the V&A Waterfront.”

Akinyemi added that innovation should not stop after the first positive result has been achieved. “Through constant innovation you are able to find out more about your company – what works and what doesn’t. This re-innovation process creates jobs as well as a nurturing environment and better profitability.”

In conclusionACT and Whelan said that determining the strategy, plan and call to action around fostering a culture of innovation in Cape Town will be a key point on his organisation’s agenda going forward. “We need an active citizenry and a strong government and business sector driven by innovation and partnership to further progress this city and truly achieve our objective of making Cape Town a world class destination for talented people to work and live in.”

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Norway allocates NOK 700 million to Tanzanian rural energy fund

Posted on 11 April 2013 by Africa Business

OSLO, Norway, April 11, 2013/African Press Organization (APO)/ Norway and Tanzania have signed an agreement under which Norway will provide NOK 700 million to Tanzania over a four-year period. This funding will be channelled to a rural energy fund in Tanzania that will give people in rural areas access to electricity.

“Access to electricity is essential for reducing poverty and generating economic growth. Providing electricity in rural areas is a way of giving the majority of the population in Tanzania the freedom to choose not to use paraffin, diesel and other less reliable energy sources that are damaging to health. Electricity provides light for doing homework and opportunities for creating jobs and generating income, and enables health clinics to function better,” said Minister of International Development Heikki Eidsvoll Holmås.

Mr Holmås and Tanzanian Minister of Energy and Minerals Sospeter Muhongo signed the agreement in Oslo on 9 April. Both of them were taking part in the High Level Meeting on Energy and the Post-2015 Development Agenda.

In Tanzania, eight out of ten people live in rural areas. Of these people, only 6 % have access to modern forms of energy. Increasing access to energy will take many years and will require substantial public subsidies. The rural energy fund is the Tanzanian authorities’ most important tool in this context. The fund will be managed by the Rural Energy Agency (REA). Sweden, the World Bank and the EU are also supporting the fund. Norway will now be the biggest single donor to the fund.

“Increased access to electricity is absolutely essential for ensuring equitable development in Tanzania. Having said this, it is difficult to achieve. Those who use electricity have to pay for it themselves. We will keep a close eye on the quality of individual projects, as well as making sure that necessary reforms are carried out, that the Rural Energy Agency has sufficient capacity and that any threats to sustainability are addressed,” Mr Holmås commented.

So far, more than 90 % of the investments in the fund have gone to expanding the electricity grid, as this is the most effective way of reaching rural areas. But the funds from Norway will also be used for local solutions enabling the production of renewable energy in areas that are not covered by the electricity grid.

Tanzania’s aim is to increase the percentage of the population that has access to electricity from 14.5 % to 30 % on a national basis, and from 6.5 % to 15 % in rural areas, by 2025. In order to achieve this, investments in the rural energy fund will probably need to increase tenfold.

“Tanzania aims to become a middle-income country in the space of 12 years. We will gradually scale down our assistance to the country as this process proceeds. Increased access to electricity is absolutely essential if Tanzania is to achieve its goal. In order to succeed, Tanzanians must think big and improve their systems over and above the individual project level. The agreement between Norway and Tanzania is divided into two phases to ensure that the quality of projects is as intended and that the efforts to bring energy to the rural population progress according to plan,” Mr Holmås said.

 

SOURCE

Norway – Ministry of Foreign Affairs

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SA: Moladi housing model builds communities

Posted on 05 March 2013 by Thandisizwe Mgudlwa

Decent housing is one of the key factors in the fight against poverty and social exclusion. It is not just about putting a roof over someone’s head – development experts attest.

Academic research proves that access to a clean and stable home implicates an improvement in security, health and education.

Moladi, a South African based company established in 1986, makes housing accessible to low-income people through innovative and eco-friendly technology.

The Moladi system consists of a reusable and recyclable plastic formwork mould, which is filled with stone-less concrete and a special chemical additive. This additive ensures that, once the mortar is set, the formwork can be removed – and reused up to 50 times.

According to the founder Hennie Botes, the brickless walls can withstand all types of weather. The formwork is lightweight allowing easy transportation. Due to the simplicity in design and the repetitive application scheme, construction costs can be reduced significantly.

The Moladi model is not only cost-effective but fast too.

Botes further comments that the wall structure of a house can be completed within one day. A further plus point, especially in remote areas, is that the construction does not require heavy machinery or electricity.

With the motto “Train the unemployed to build for the homeless” Moladi combines construction with economic development.

The company also offers training locally for the unemployed thereby creating jobs and empowering the community as a whole.

Due to the simplicity of the approach, construction techniques and skills can be transferred in a short time. In this way, the communities benefit from affordable shelter and skilled entrepreneurs (in the area of low-cost housing) at the same time.

Moladi’s success in over 20 countries shows that affordable housing is an important key in finding solutions to promoting security and alleviating poverty.

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South Africa: Progress made but step up economic reforms to achieve full potential, says OECD

Posted on 04 March 2013 by Africa Business

PARIS, France, March 4, 2013/African Press Organization (APO)/ South Africa must step up efforts to foster strong, inclusive economic growth that creates jobs, according to the OECD’s latest Economic Survey of South Africa. Priorities include a growth-enhancing macroeconomic policy-mix, and better implementation of structural reforms, notably to improve education.

 

The Survey, presented in Pretoria by OECD Secretary-General Angel Gurría and South African Minister of Finance Pravin Gordhan, recognises also the important advances South Africa has made in recent years. “South Africa has recorded tremendous success in a number of economic and social policies” Mr Gurría said. “Per capita income is rising, public services are expanding, health indicators are improving and public finances are in better shape than in many OECD countries.”

 

However, the country is growing at a slower pace than other leading emerging economies, according to the Survey. “A high proportion of the population is out of work; offering people a brighter future by creating jobs is a policy priority,” Mr Gurría said. “Income inequality remains high, educational outcomes should be improved and access to education needs to be inclusive. Environmental challenges like climate change and water scarcity need to be tackled to make economic growth green and sustainable. There is unfinished business that will require additional reform efforts.”

 

The OECD identifies several priority areas for action:

Make better use of macroeconomic policy to support growth. The deficit expanded rapidly during the crisis and has been brought down only gradually since. Much of the increase in spending came through large increases in the public sector wage bill, while public investment has fallen as a share of total expenditure. With core inflation remaining well contained, monetary policy has been eased cautiously. The rand has fluctuated with international sentiment, and has been overvalued for extended periods.

Implement reforms to boost competition and improve the functioning of labour markets. Most industries are highly concentrated, with network industries dominated by state owned enterprises. Large firms are able to share excess returns with their employees via collective bargaining, and in some sectors the collective agreements are extended to other firms, creating a barrier to entry for small enterprises. This results in a sharply dualised labour market, with a well-paid formal sector covered by collective bargaining and a secondary market where pay is low and conditions poor. Many South Africans are excluded from work altogether, contributing to poverty, inequality, and ill health. Strengthening product market competition and improving the functioning of labour market institutions should be high priorities.

Improve education to give people better prospects and opportunity. Skill mismatches are a key element of the persistently high unemployment rate, especially for youth: the education system is not producing the skills needed in the labour market. The benefits of obtaining a high school diploma – as concerns the probability of finding a job and the earnings premium when employed – are mediocre, whereas the shortage of skilled workers is reflected in a high premium for university graduates. Shortages of learning materials, teachers, support staff and well-trained principals across most of the school system contribute to the poor outcomes. If South Africa is to achieve full employment, the quality of basic and vocational education must be improved.

Work towards a greener and cleaner economy. Greater use of market instruments can help the authorities deal with long-term environmental challenges. In most respects the policy framework for addressing green issues, including climate change and water scarcity, is sound, but implementation has been inadequate. Similar problems are seen in the electricity and water sectors, where supply struggles to keep up with demand in a setting where prices – when they exist – do not cover total costs. The policy challenge is to explain the necessary increases in the relative price of energy and water and then bring them about in a manner that minimises adjustment costs to protect the poor, by applying appropriate social policy instruments.

Further information on the Economic Survey of South Africa is available at: http://www.oecd.org/eco/surveys/southafrica2013.htm. You are invited to include this Internet link in coverage.

 

SOURCE

Organization for Economic Co-operation and Development (OECD)

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A partnership built on a vision for an Emerging Senegal

Posted on 26 February 2013 by Africa Business

Support economic growth, job creation and poverty reduction

WASHINGTON The World Bank Group’s Board of Directors discussed (February 19, 2013) the Joint Country Partnership Strategy (CPS) for Senegal for the period 2013 -2017 focused on economic growth, job creation and poverty reduction for an emerging Senegal.

“This new CPS is the translation of the change desired by the Senegalese people who by their votes in 2012 demanded  public policies resulting in sustainable economic growth capable of  generating employment especially for the youth  and opportunities to significantly reduce poverty in Senegal”, said Vera Songwe, World Bank Country Director for Senegal.

The Country Partnership Strategy of the World Bank, IFC and MIGA, intends to support the National Social and Economic Development Strategy (SNDES) priorities and Senegal’s efforts to engage in a recovery and a higher growth and inclusive growth path over the medium-term, she added.

This CPS is focused on one foundation and two pillars. It proposes to leverage substantial amounts of resources from collaboration with the IFC, MIGA, Trust Funds, and also by favoring more regional projects and donor coordination.  The overarching focus of the CPS will be on improving governance, building resilience, accelerating growth and creating jobs and improving service delivery.

The Foundation “Strengthening the governance framework and building resilience”, will focus the CPS interventions on strengthening governance systems and processes to enhance the predictability, credibility and accountability of the government, indicated Vera Songwe. In addition, the CPS will also have specific activities in the area of Disaster Risk and Sustainable Land Management to enhance resilience across the whole economy.

To be an emerging country, Senegal needs a significant improvement in its private sector environment and its macro-economic and fiscal framework and the way the CPS is dealing with this challenge is concentrated in its first pillar: “Accelerating inclusive growth and creating employment”. “Given fiscal constraints, the thrust of work will focus on activities which help reduce government spending by further involving the private sector and leveraging regional and international markets”, explained Ms. Songwe.

The Government of Senegal will be supported to improve the allocation and effectiveness of expenditures and the impact on results, particularly in the social sectors with the third pillar of the CPS “Improving service delivery”. This pillar will focus on improving governance, access and equity in the social sectors.

The country partnership strategy for Senegal is a shared document formulated as a result of  intensive and broad  consultations with all stakeholders, including private sector, the parliament, academics, youth movements, civil society organizations, and donor’s community. It has been validated by the Government of Senegal at the highest level, recognizing its alignment with the National Social and Economic Development Strategy.

The World Bank Group (IDA, IFC, MIGA) portfolio in Senegal is $1,190 million, including 17 IDA active operations and 8 Recipient Executed trust funds totaling $958 million in net commitments, of which $562 million remains undisbursed.

 

Source: WorldBank.org

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IFC Helps Extend Financial Services in Egypt

Posted on 05 February 2013 by Africa Business

CAIRO, Egypt, February 5, 2013/African Press Organization (APO)/ — IFC, a member of the World Bank Group, is investing in Fawry, Egypt’s leading electronic payment provider, in an effort to extend crucial financial services and encourage economic development across the country.

 

The $6 million investment will help Fawry, a local company, extend its network of payment terminals across Egypt, a country heavily reliant on cumbersome cash transactions. That is expected to help consumers pay bills and make it easier for businesses to receive payments, stoking commerce and economic growth.

 

“There are a lot of inefficiencies associated with cash, which is used in about 99 percent of all household transactions in Egypt,” said Ashraf Sabry, Fawry CEO. “Electronic payments make it easier to do business and, in a country with a large population and very low banking penetration, they are also a key driver of financial inclusion.”

 

The investment is also designed to help restore investor confidence in Egypt and create jobs in its burgeoning high-tech sector.

 

“Egypt’s economy has struggled during the last two years,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “Companies like Fawry can help the economy by creating jobs and demonstrating to investors that there is a long-term potential in the country.”

 

Fawry offers Egyptians a convenient one-stop destination where they can make regular payments to telecoms companies, utilities, charities, financial services firms, and tour operators. More than 10 million people use Fawry to make payments to 43 service providers. The company has more than 20,000 payment locations, including retail stores, post offices, and the ATMs of 10 commercial banks. With IFC’s support, Fawry is planning to increase its number of payment locations to 35,000 by 2016.

 

The investment is part of IFC’s efforts to catalyze foreign investment in Egypt, support the private sector, and drive job creation. In the 2012 fiscal year, IFC committed $506 million to seven local projects, a figure that includes $125 million mobilized from other investors. IFC has over $1 billion invested in the country.

 

SOURCE

International Finance Corporation (IFC) – The World Bank

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Nearly Half of the World’s Entrepreneurs Are Between The Ages Of 25-44 According To Global Entrepreneurship Report

Posted on 22 January 2013 by Africa Business

Babson sponsored research finds increased demand for entrepreneurial training

WELLESLEY, Mass., Jan., 2013 /PRNewswire-USNewswire/ — The Global Entrepreneurship Monitor (GEM) 2012 Global Report estimates that nearly half of the world’s entrepreneurs are between the ages of 25 and 44. The survey also reports that, in all geographic regions surveyed, 25-34 year olds showed the highest rates of entrepreneurial activity.

“Although most of the entrepreneurs tend to fall into the early to mid-career age ranges, we see people participating in entrepreneurship at all ages,” commented Donna Kelley, co-author of the report and Associate Professor of Entrepreneurship at Babson College. “Encouragingly, in every part of the world, youth are starting businesses as well as those in their late careers. Given this broad spectrum of participation, some economies may be well-served by looking more closely at certain age groups in order to determine how to encourage and support entrepreneurial activity. Whether it be educated youth in a society unable to find jobs to apply their skills, mid-career workers suddenly unemployed, retirees wanting or needing to continue earning income, or individuals of any age that recognize opportunities and have the desire to be entrepreneurs, people have particular strengths they can leverage at various points in their careers, but they are likely to need different training and resources to effectively engage in entrepreneurial pursuits.”

The Latin America/Caribbean and sub-Saharan African regions tend toward older entrepreneurs, with one-third falling into the 45-64 age range. In Europe, on the other hand, the non-EU economies report, on average, that half of the entrepreneurs are between 18-34 years of age. China was also distinct in claiming a high proportion of young entrepreneurs, with 57 percent between 18 and 34 years of age.

Unveiled today at the GEM Annual Meeting in Kuala Lumpur, Malaysia, this is the 14th annual survey of entrepreneurship worldwide and is the largest single study of its kind.

The GEM Global report is authored by Siri Roland Xavier , Associate Professor, Deputy Dean and Program Director for Entrepreneurship, Bank Rakyat School of Business and Entrepreneurship, University Tun Abdul Razak in Kuala Lumpur, Malaysia; Donna Kelley , Associate Professor of Entrepreneurship, Babson College, Wellesley, MA, USA; Jacqui Kew , Senior Lecturer, College of Accounting, University of Cape Town (UCT), Cape Town, South Africa; Mike Herrington , Director, UCT Centre for Innovation and Entrepreneurship, Graduate School of Business, Cape Town, South Africa; and Arne Vorderwulbecke, Research Fellow and Doctoral Candidate, Institute of Economic and Cultural Geography, Leibniz Universitat, Germany.

In the late spring and early summer of 2012, more than 198,000 adults in 69 economies took part in the GEM survey. With the largest sample to date, this group of economies represented an estimated 74 percent of the world’s population and 87 percent of the GDP.

The GEM 2012 Global Report also looked at cultural attitudes about entrepreneurship. Perceptions about entrepreneurial opportunities, capabilities, fear of failure, and intent to start a business are key predictors of entrepreneurial activity around the world. “We are finding that entrepreneurship education and media attention about entrepreneurs may have a lasting effect on cultural attitudes about entrepreneurship,” Kelley stated.

Visit the Babson Global Entrepreneurship Monitor Reports Website to access the full report.

Among The Report’s Key Findings:

Perceived Opportunities and Capabilities

  • Entrepreneurs in sub-Saharan Africa ─ factor-driven economies in the earliest stage of economic development ─ had high perceptions about good opportunities for starting businesses within six months (70 percent), and beliefs that they have the skills and knowledge necessary to start businesses (76 percent). Their high Total Entrepreneurship Activity rates (TEA) are consistent with these positive attitudes.
  • Positive attitudes are higher in Latin America than in non-European Union economies. Both regions are within the middle-stage efficiency-driven group of economies (developing economies where industrialization has taken hold). This difference shows how attitudes towards entrepreneurship are shaped by more than a country’s level of economic development.
  • Noticeable variations in attitudes can be seen within geographic regions. The wealthier economies in the AsiaPacific/ South Asia regions ─ Japan, Republic of Korea, and Singapore ─ show lower than average opportunity and capability perceptions while earlier development-stage countries like China, Pakistan, and Thailand scored above average.
  • As economies develop, perceived opportunities and capabilities tend to decline. Perceived opportunities were almost twice as high in factor-driven vs. innovation-driven economies.

“The GEM Global report clearly shows that perceptions are critical. GEM looks at perceived opportunities, perceived capabilities, and intentions to start a business. We measure and analyze the differences among a wide range of geographic regions and economic levels,” said the report’s coauthor Mike Herrington .

Fear of Failure

  • Economies in sub-Saharan Africa had the lowest levels, with just 24 percent reporting that fear of failure would prevent them from starting new businesses. Latin America and the Caribbean economies were also confident with only 28 percent stating fear of failure concerns.
  • Fear of failure increases as economies move from early-stage to advanced development levels. Malawi (12 percent) has the lowest rate while Greece (61 percent) and Italy (58 percent) reported peak levels.

Entrepreneurial Intentions

  • Intentions are highest (48 percent) in factor-driven economies (characterized by low-cost labor, natural resources, exports) and decrease significantly in the efficiency-driven (26 percent) and innovation-driven groups (11 percent).
  • The sub-Saharan Africa region ranked highest in intentions (53 percent) among every geographic region in the world.
  • Positive perceptions about opportunities do not always translate into starting businesses. 30 percent of respondents in Asia saw opportunities but only 17 percent expect to actually start businesses in the next three years.

Beliefs About Entrepreneurship

  • Entrepreneurship as a good career choice and the belief that it is a high status choice, or one that receives media recognition, varied among cultures and regions. There were high rankings for these attitudes in the Latin America/Caribbean, Middle East/North Africa (MENA), and sub-Saharan Africa regions.
  • European Union (EU) attitudes were lower. Only half of the respondents agreed that entrepreneurship was a good career choice and received positive media attention still, two-thirds think of entrepreneurship as a high-status profession.

Entrepreneurial Activity

  • Total Entrepreneurial Activity (TEA) measures the percentage of adults (ages 18 -64) who are nascent (potential) or new entrepreneurs. TEA rates are higher in economies with low GDP per capita and lower in high GDP economies. This ratio corresponds with high levels of necessity-entrepreneurship (no other work options available) in low GDP countries while high GDP countries exhibit higher levels of opportunity-motivations.
  • At 27 percent, Zambia (sub-Saharan Africa) and Ecuador (Latin America/Caribbean) submitted highest TEA rates in these regions. The Asia Pacific/South Asia region showed a mix of TEA levels with Thailand (19 percent and China (13 percent) leading the way.
  • Innovation-driven economies have more established business owners than entrepreneurs. Greece, Spain, Switzerland, Ireland, and Finland in the EU; and Japan, Republic of Korea, and Taiwan in Asia have one-third more established business owners than entrepreneurs. Non-EU and MENA groups have low rates of both TEA and established business ownership while sub-Saharan Africa has high rates of both.
  • Business discontinuance also varied across regions. Lack of financing was the most common cause in sub-Saharan Africa, but was less an issue in Asia. Respondents in the USA and EU cited other jobs or business opportunities as reasons for business discontinuance.

Necessity and Opportunity Driven Entrepreneurs

  • In factor-driven economies, the proportion of entrepreneurs with necessity-driven motives generally declines, while improvement-driven opportunities (to improve income or independence) increase.
  • Geography also plays a part. Latin America/Caribbean and non-EU economies are both efficiency-driven, but the Latin America/Caribbean region reported twice as many entrepreneurs with improvement-driven opportunity motives than those with necessity motives. In contrast, non-EU countries show equal levels of either motive.

Gender Differences

  • Entrepreneurship activity among men and women was almost equal in most sub-Saharan Africa economies, while men were 2.8 times as likely to start a business than women in the MENA region.
  • In Egypt, Palestine, and Korea, less than one-fifth of all entrepreneurs were women. Only 5 percent of entrepreneurs in Pakistan were women.
  • Ecuador and Panama, Ghana and Nigeria, and Thailand were the only economies where the female TEA rate was higher than that for males.

Growth Expectations

  • Despite low TEA rates among non-EU countries, nearly a fifth of their entrepreneurs expect to hire 20 or more employees in the next five years.
  • The USA reported a high proportion of entrepreneurs projecting 20 or more new hires and also boasts a high TEA rate among innovation-driven economies.
  • Singapore, China, and Colombia also displayed both high TEA rates and high proportions of 20 plus growth entrepreneurs compared to others in their regions.

Entrepreneurship Framework Conditions

GEM interviewed country experts about the kinds of Entrepreneurship Framework Conditions (EFCs) – from education and national policy to internal markets and infrastructure systems – that will contribute to a healthy environment for entrepreneurship.

  • Overall, physical infrastructure was identified as a positive factor in nearly every economy and region. Internal market dynamics (the level of change in markets) was viewed as positive by most of sub-Saharan Africa, MENA, Asia Pacific/South Asia, and non-EU economies. A more negative outlook on market dynamics was found in Latin America/Caribbean, the EU, and the USA.
  • Most GEM economies see a need for improved entrepreneurship education at the primary and secondary levels. Entrepreneurial finance was another condition frequently cited as negative, but particularly in the Latin America/Caribbean region.
  • Experts in the USA saw cultural and social norms as positive, while only one EU economy identified this condition favorably. The USA also rated R&D transfer positively, while sub-Saharan Africa and many economies saw this condition as negative.

Entrepreneurship and Migration

In 2012, GEM included questions around the special topic of international migration. Currently there are more than 210 million international migrants with increases expected in the next ten years. Migrant entrepreneurs have the potential to contribute substantially to their societies through knowledge and information transfer, global trade, and job creation.

  • Migrants exhibit a higher rate of entrepreneurship than non-migrants in innovation and factor-driven economies. Efficiency-driven economies showed an opposite pattern with lower TEA rates among migrant entrepreneurs.
  • 25 percent of migrant entrepreneurs (non-migrants 16 percent) in efficiency-driven economies expect to create 10 or more jobs; 23 percent (non-migrants 9 percent) in factor-driven economies; and 20 percent (non-migrants 14 percent) in innovation-driven economies.
  • More than half of migrant entrepreneurs said they sell products and services outside their host economy. This pattern was similar in innovation-driven economies but less so in factor-driven economies.

Policy Implications

GEM researchers offer several guidelines for policy makers, entrepreneurs, and academics to help them build entrepreneurial eco-systems that enable entrepreneurship to flourish in every world economy.

  • Develop policies to promote societal attitude changes about women; and that train, support and encourage women entrepreneurs.
  • Create special entrepreneurial support tools and programs for entrepreneurs of different ages.
  • Re-engage former entrepreneurs and leverage their wealth of experience in mentoring new entrepreneurs.
  • Implement policies to encourage youth entrepreneurship, especially in high un-employment regions such as sub-Saharan Africa.
  • Encourage national and global efforts to improve entrepreneurship education in primary and secondary schools.
  • Help economies to recognize the value migrants provide in creating jobs and globalizing the business environment.
  • Urge governments to enforce a strong rule of law to maintain the quality of entrepreneurial entries. GEM also stresses the importance of developing legal frameworks in which entrepreneurship can thrive.

“Entrepreneurship creates employment and adds economic value for economies everywhere. But this activity must be enacted in tandem with inclusiveness for all sections of society, because it is an effective way to encourage prosperity and peace,” said the report’s lead author Siri Roland Xavier .

GEM 2012 Global Report Sponsors
GEM 2012 Global Report sponsors are Babson College, Universidad Del Desarrollo, University Tun Abdul Razak, GERA and GEM. The Global Entrepreneurship Research Association (GERA) is, for constitutional and regulatory purposes, the umbrella organization that hosts the GEM project. GERA is an association formed of Babson College, London Business School and representatives of the Association of GEM national teams.

About GEM
The Global Entrepreneurship Monitor (GEM) is a not-for-profit academic research consortium that has as its goal making high quality information on global entrepreneurship activity readily available to as wide an audience as possible. GEM is the largest single study of entrepreneurial activity in the world. Initiated in 1999 with just 10 countries, GEM has now conducted research in over 80 economies all over the world. Visit the Babson GEM Website or the GEM Consortium Website.

About Babson College
Babson College is the educator, convener, and thought leader for Entrepreneurship of All Kinds®. The College is a dynamic living and learning laboratory, where students, faculty, and staff work together to address the real-world problems of business and society—while at the same time evolving our methods and advancing our programs. We shape the leaders our world needs most: those with strong functional knowledge and the skills and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in a common purpose to create economic and social value. As we have for nearly a half-century, Babson continues to advance Entrepreneurial Thought and Action® as the most positive force on the planet for generating sustainable economic and social value. For information, visit the Babson College Website.

SOURCE Babson College

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South African industrial issues must be dealt with now

Posted on 16 October 2012 by Africa Business

 

By Thandisizwe Mgudlwa

 

This is serious stuff.
And South African stakeholders, shareholders, sectors must stand and pay attention to what could further derail the process of creating jobs.
As mentioned so many times before and evidence elsewhere in the world confirms that job can go a long way in eradicating poverty and underdevelopment.
It is therefore paramount to all the groups concerned to listen and take actions from the warnings of John Botha.
This week Botha said: “It is becoming so onerous to employ in South Africa that business is opting for alternatives to direct employment – alternatives like outsourcing, sub-contracting, automation, off-shoring and new technology.
These were just a handful of the unintended consequences of the proposed changes to South Africa’s labour laws outlined by Botha who is director at Production Management Institute’s (PMI) in a briefing to business.
He said there was no motivation for employers to employ more staff than they needed because of statutory inflexibility, over-regulation and sanctions. “As a result, we are seeing and will continue to see companies increasingly focus on alternatives to direct employment relationships.”
Also, he predicts that companies would increase independent contracting relationships at the expense of direct employment. “This will be evidenced in outsourcing practices, sub-contracting, off-shoring, utilisation of temporary employment services and the like.”
Botha believes that the net effect of the Broad-Based-Black Economic Empowerment Codes was to drive outsourcing rather than direct employment, given the significant weighting on procurement and enterprise development, noted a report.
He added that the inconsistencies between some of the provisions of the labour bills – particularly the Employment Equity and Labour Relations Bill Amendments – were “astonishing”.
“The most significant example of such contradictions lies in the Labour Relations Bill, which limits equal pay for work of equal value to vulnerable persons. At the same time, the Employment Equity Bill proposes equal pay for all employees – from general workers to managing directors.”
Furthermore, Botha said many of the amendments effectively undermined some of the strategic national goals articulated in the National Development Plan, the New Growth Path and the National Skills Accord, all of which promoted job creation.
In addition, he maintains that the labour bills would have a profound impact on human capital practices and BBBEE credentials. “Human resources (HR) functions and departments are shrinking as employers strive to fulfil those functions without employing more people.”
He further explained: “Corporate HR was already heavily regulated by the BBBEE Act. Coupled with the revised labour bills, employers were simply avoiding liability completely and, instead, optimising business processes through strategic procurement, minimalistic employment, technology and mechanisation.
In conclusion: The changes to South Africa’s labour laws, proposed as far back as 2010, are currently before Parliament.

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