South Africa is one of the toughest countries in the world to be an entrepreneur but, as the country emerges from the economic shocks of the COVID-19 pandemic, there are encouraging signs of increased entrepreneurial activity and of more small businesses making it beyond the startup stage, according to the latest Global Entrepreneurship Monitor South Africa report.
The report found that while South Africa’s supportive environment for entrepreneurship is rated lower than global averages, there are positive signals in increased early-stage entrepreneurial activity and rising entrepreneurship rates among women and young people.
Early-stage entrepreneurial activity, which means the percentage of adults who were starting or running a new business, rose to 17.5 per cent in 2021, up from 10.8 per cent in 2019. Those owning or managing an established business, in operation for at least 3.5 years, were at 5.2 per cent, up from 3.5 per cent.
Although South Africa ranked 45th out of 50 countries in the GEM National Entrepreneurial Context Index, a measure of the favorability of the environment for entrepreneurship and new business creation, GEM SA lead author Angus Bowmaker-Falconer, research fellow at Stellenbosch Business School, said the uptick in the established business rate was particularly encouraging.