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  • Great experience working with you to gain clarity of what needs changing in my business. Stephen Jordan Access to Africa - 25 August 2011, Marketing Module

Offer Business Training To Those Who Want It

THIS time of year is traditionally the domain of corporate soothsayers who like to tell us what will happen in the next 12 months, as if experience has not shown us their crystals balls are no better than our common sense. Predictions will focus on the usual stats with the number of jobs lost or created in X, Y or Z sector foremost among them. Unfortunately, all of this will ignore the fact that the most likely work for the larger mass of unemployed people will be self-created and not rest on the initiatives of either the government or corporate SA.

Government job-creation initiatives still tend to focus on either public works programmes or supporting existing formal sector businesses, with bail-outs and lines of credit when the formal sector continues to haemorrhage jobs but not CEO bonus payouts. As important as it is that blue-chip flagship enterprises do not sink, we shouldn’t be rearranging the deck chairs — we should be launching the lifeboats so we have a Plan B for job creation.

Counting on old corporate favourites to generate hundreds of thousands of jobs is myopic. The world has changed, with two to four years of jobless growth ahead for SA, and this dependence demonstrates a lack of imagination coupled with obvious desperation.

Societies and their economies are fundamentally shaped by historical developments and as renowned psychologist Carl Jung observed, “We are trapped by the images of our past.” In SA our dominant social images of entrepreneurship remain linked to images of grim and gritty survival on the sides of our roads, stories of hi-tech one-hit wonders, or dodgy tender millionaires. None of these images is helpful if we are to build a broad-based entrepreneurial culture capable of supporting the large numbers of people who have little chance of finding formal work in the job-shedding environment.

Our entrepreneurial imagery leads most new entrepreneurs to identify business opportunities within an extremely narrow range. This causes hyper competition in a few overtraded sectors and dooms new entrepreneurs to a survivalist existence when this problem could be so easily overcome.

For example, if prospective entrepreneurs receive simple entrepreneurial training, the likelihood of new business opportunities being identified within their environments increases from 31,3% to 57,7% (Gems Report, 2008). The result is that you don’t have three mealie vendors in one street, you have one mealie vendor, one pap vendor and one boerewors vendor. Very soon you may have the makings of a fully fledged community market selling all sorts of foodstuffs.

Research has also shown that positive self-perception and attitudes translate into a greater propensity to start a new business. Entrepreneurs who receive voluntary entrepreneurial training feel significantly more empowered and are much more likely to attempt to start a business.

The bottom line is that there are compelling and urgent reasons for providing and promoting entrepreneurial training to newly unemployed workers and to the youth who are unlikely to be absorbed into formal employment anytime soon. This training should be provided on a voluntary basis as the “yield” from voluntary training tends to be significantly higher than the yield from compulsory training.

Research by the Umsobomvu Trust also suggests practical, experiential learning and business simulations with high levels of participation are the most effective.

Unfortunately, voluntary entrepreneurial training is provided to less than 3,8% of the South African adult population, with another 5,2% receiving compulsory entrepreneurial training. This is well below the global average for countries with a similar economic profile to SA’s and helps explain our poor entrepreneurial and job creation track record.

Some entrepreneurial training programmes have slipped into the accreditation frameworks of sector education and training authorities (Setas) but remain, for the greater part, woefully underused. This is primarily because Setas are geared to meet the demands of the formal labour market. Entrepreneurial skills are simply not valued to the same extent as technical, administrative or managerial skills.

This brings me to consider the structure and likely effect of the training layoff scheme, launched by the Department of Labour in September last year. This scheme is funded through the Skills Development Fund with an estimated budget of R2,4bn. Impressive indeed, but what has its effect been?

At the heart of the design of the scheme is the assumption that retrained workers will be reabsorbed into viable businesses after a short spell of training. This assumption is dangerously flawed because there is a high risk that retrained workers will simply be retrenched as the economy shows no sign of a quick or sustainable rebound.

At least part of the answer lies in the launch of a national, voluntary, broad-based, entrepreneurial education and training scheme. The scheme should focus on retrenched workers and the youth, and could likewise be funded from the Skills Development Fund. If correctly implemented, research suggests 30%-40% of trainees could go on to start their own businesses. But even more significantly, research shows that a startling 40%-50% of these entrepreneurial trainees could find subsequent formal-sector employment as a result of their new understanding of business.

Promoting entrepreneurship is not a panacea to the social problems of SA. Given our current stage of economic development, it is not even a long-term alternative to formal sector employment. But the energy and hope that entrepreneurship inspires is part of the broader solution.

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  • Great experience working with you to gain clarity of what needs changing in my business. Stephen Jordan Access to Africa - 25 August 2011, Marketing Module

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  • Johannesburg, Gauteng, South Africa
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