Why South Africa needs entrepreneurs

March 24, 2010
3 min read

Last week I attended a number of seminars with a focus on the South African economy and the future that it holds.  These particularly addressed the changes we might expect to see – and how the bright people can position themselves in such a way as to benefit from these changes on the business playing field.

It is evident that a shift in power is taking place from the West to the East. The expected GDP growth rates for China, India, Japan and other eastern economies over the next five years are expected to be between 6 and 8% pa, which by 2015 will have the East generating $7 trillion to the rest of the world’s $6 trillion. America will sit with a continent full of goods “Made in China” while it’s cash has been wired across the Pacific to the East.

To sustain the growth in the East, raw materials are key. And that is where South Africa comes into play. We are the continent’s biggest national GDP generator, and have the infrastructure and business environment in place to facilitate trade into the rest of Africa.

China et al’s economic clout and desire for resources will not ensure that growth happens as organically as we have seen it happen in the past. A mine or smelter will not simply be developed and put into production. If necessary, a direct road or railway to a new port will be built, with little inclusion of the SA government. So herein lies opportunity number one – own the resources, facilitate the transacting, or manage the logistics of resources – and you will do well. We cannot think generically in this regard about what has been the “Western” status quo in this regard.

The other problem faced by most governments is that they have bailed out a lot of companies operating in those territories. Government debt is a massive burden – and have very few ways of being bailed out. In South Africa, our own Government has run up a considerable level of debt with significant infrastructure spend in preparation for the World Cup. It now doesn’t have the means to stimulate the economy by creating positions for workers and reducing unemployment.

Opportunity number 2 is having the strategies in place to stimulate the private sector to grow, and get entrepreneurs to create new enterprises (servicing Eastern investment into Africa) and thus create jobs.

What will these companies offer? How will they come into being? Who will seed investment into assisting them grow? If the entrepreneurs can answer these questions, South Africa can prosper. Significantly.

What do you think?



Why have you not posted anything in so long? I enjoy your work. Even though you talk about issues I do not particularly comprehend, you give your views in such a manner that after reading, I feel that little bit the wiser…

Leave a Reply

Your email address will not be published. Required fields are marked *