Global Entrepreneurship Monitor (Gem) - South African Executive Report 2002

Abstract

The Global Entrepreneurship Monitor (GEM) 2002 SouthAfrica report indicates that the country ranks 19th in entrepreneurial activityof the 37 countries participating in this international researchproject.The country has an average level of overall entrepreneurialactivity, the lowest rate of entrepreneurship among developing countriesstudied, a low opportunity entrepreneurship rate, and a low survival rate forstartups. Three investigation methods are used in the GEM studies: an adult populationsurvey; interviews with entrepreneurship experts in that country; and selectednational and demographic data. The GEM model examines general frameworkconditions for economic growth and nine entrepreneurial framework conditions –financial support, government policy, government programs, education andtraining, research and development transfer, commercial and professionalinfrastructure, market openness, access to physical infrastructure and culturaland social norms. The study found that South Africa has the lowest rate of entrepreneurshipamong the developing countries on all GEM measures (opportunity, necessity,startup and new firms). The findings reinforce those of the GEM 2001 report.The results also reinforce the view that the emergence of a large number ofblack entrepreneurs is crucial in increasing the pace of economic developmentin South Africa. The findings show that the South African entrepreneurialclimate has a number of strengths, but there are also many challenges toovercome, including education and training, finance, cultural/social norms,government policies, and government programs. The formal and informal entrepreneurs have different needs in each of theproposed nine framework conditions. The findings of the formal and informalentrepreneurs comparison are presented in terms of economic contribution,education, resources, needs, policy goals, priorities, and implementationsteps. (CBS)

Keywords: Entrepreneurial activity, Educational background, Individual traits, Startups, Ethnic & racial groups, Labor markets, Public policies, R&D, Cultural attitudes, Survival rates, Urban areas, Barriers to entry, Business conditions, Market infrastructures, Entrepreneurial environment, Firm growth, Economic development, Startup rates