ANDE South Africa

Gauteng Entrepreneurial Ecosystem - 7 Nov 18

ANDE SA launches Gauteng Entrepreneurial Ecosystem Snapshot and online Ecosystem Snapshots platform

Snapshot provides in depth look at web of support for entrepreneurs in South Africa’s economic hub

Entrepreneurship support available to entrepreneurs in Gauteng is showcased in the recently launched Gauteng Entrepreneurial Ecosystem Snapshot, produced by the Aspen Network of Development Entrepreneurs (ANDE), with support from the United Kingdom’s Department for International Development (DFID) Impact Programme. The Snapshot, together with the newly developed portal, an online Ecosystem Snapshots platform, was launched at an event attended by some 50 ecosystem players in South Africa’s Gauteng province.

The Snapshot was produced with the intention of providing an in-depth look at programmatic support available to entrepreneurs in South Africa’s economic hub, the Gauteng Province.  The Snapshot’s data on financial and non-financial support available for small and growing businesses (SGBs) in Gauteng is easily accessed via the portal, together with six snapshots from other emerging market ecosystems in Africa.

Overall, the Snapshot found the Gauteng entrepreneurial ecosystem to be highly active, with 255 organisations supporting entrepreneurs responding to the survey. These organisations collectively operate 261 programmes. Of these 215 of the programmes provide non-financial support, 90 programmes provide financial support and seven programmes provide other support services.

A key finding was that most programmes operate in Johannesburg, with the service providers based predominantly in the higher income suburbs (77 in Sandton as opposed to five in the Alexandra township). While reasons advanced for this high discrepancy ranged from reporting bias to the preference of mentors to be closer to the programmes, this finding highlights the need for programmes to have increased physical presence in rural and township areas to help more vulnerable entrepreneurs access support.

The question also arose as to what is driving the support provided at various stages from ideation to maturity, with the Snapshot highlighting the need for more early stage risk capital to be made available. Amongst other benefits, it will encourage a more inclusive environment for entrepreneurs from more vulnerable populations, including women and youth.

Another key point found that of the 215 programmes providing non-financial support, 31% provided peer-to-peer support, a delivery mechanism which global research such as the Global Accelerator Learning Initiative (GALI) is finding to be increasingly beneficial, meriting further exploration in the local context.

Mentorship emerged as the most common delivery mechanism amongst nonfinancial support providers.  The conversation touched on the challenges associated with measuring the impact of mentorship quantitatively, with the success of mentors considered to be based heavily on personal chemistry and the right fit with the entrepreneur. The lack of access to high quality mentors, particularly in rural areas, has encouraged the development of web-based mentoring but there is doubt around its effectiveness, particularly as personal connection is key and accessibility to technology is problematic in rural and lower income areas.

Amongst the non-financial support providers, provision of business planning and strategy ranked highest, with investor matchmaking ranking one of the lowest. Catalyst for Growth’s 2018 Annual Report identifies access to funders or investors as the most demanded service by entrepreneurs in their sample, highlighting a possible mismatch between support service provider priorities and entrepreneur demands. The largest group (49%) of service providers identified their programmes as sector agnostic. Industry research appears divided on the merit of sector focused programmes, warranting further local discussion.

Employment generation was the highest impact objective of programmes in Gauteng, reflecting job creation as a national priority, while women were the highest stakeholder focus group, followed closely by youth.

For corporates, the major purchaser of BDS services, it was mentioned that higher cost programmes do not necessarily achieve greater impact. Additionally, the attitude of corporates to enterprise and supplier development (ESD) was cited as often being primarily about “ticking boxes”. More corporate champions with success stories would assist in changing attitudes at the leadership level.

In conclusion, it was agreed that, while Government had provided useful leadership in terms of enterprise development through its various programmes and initiatives, including the National Development Plan 2030, the Gauteng entrepreneurial ecosystem lacked leadership, collaboration between players and alignment with larger national economic objectives. This provides the opportunity for a provincial strategy with targeted roles, effective partnerships, and collaboration.

The Gauteng Entrepreneurial Ecosystem Snapshot can be accessed via the online Ecosystem Snapshots platform at ecosystems.andeglobal.org.

The Aspen Network of Development Entrepreneurs (ANDE) is a global network of more than 280 organizations that propel entrepreneurship in emerging markets. ANDE members provide critical financial, educational, and business support services to small and growing businesses (SGBs) based on the conviction that SGBs will create jobs, stimulate long-term economic growth, and produce environmental and social benefits. Ultimately, we believe that SGBs can help lift countries out of poverty. For more information, go to www.andeglobal.org.

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