BEE ruining black entrepreneurship: study
Black economic empowerment has encouraged skilled black people to take the safer, more secure route of working in the formal sector rather than start their own businesses, according to a new report.
This, its says, reinforces white domination of business ownership in South Africa.
The TopEnd 2013 Survey into the country’s financially secure – those with a personal income of R25,000 or more a month – shows that the self-employed sector is dominated by white, middle-aged men – 72% of entrepreneurs are white compared to only 20% black.
And almost 80% of the entrepreneurs who responded to the survey are male, while 84% of them are 35 or older.
Confirming a view expressed by the DA spokesman for economic development in Gauteng, Gavin Lewis earlier this year, the survey shows that political strategy has had a significant impact on the self-employed sector.
“If BEE had done one thing, it has diluted the natural supply of entrepreneurs by absorbing them into the easier and more lucrative path of buying into existing businesses on preferential terms,” said Alan Todd, research head of RamsayMedia Research Solutions, the company behind the survey.
Citing the European Union’s Entrepreneurship Action Plan, which aims to encourage economic growth in response to the debt-driven crisis in Europe, he said more needed to be done locally to teach entrepreneurial skills and the value of starting one’s own business.
“The role of entrepreneurs is critical in any society – their ability to bring new products services and entities to market creates jobs, which grows demand, which in turn stimulates economic growth.
“The South African education system is producing too few entrepreneurs to make a difference – our research shows that only 17% of the TopEnd segment, a total of only 272,000 people, are self-employed,” Todd said.
The survey reveals that while entrepreneurs are innovators and risk-takers, the rewards can be lucrative. The self-employed are wealthier than their employed counterparts and are more likely to own several properties, both residential and commercial – 18% own three or more properties, compared to 8% of wage earners.
They are also more likely to own shares and unit trusts, the research found.
Entrepreneurs are far more inclined to have some sort of sideline income stream than employees. “Not only do they own their own businesses, they boost their earnings by dabbling in opportunities that come their way – they are opportunists,” RamseyMedia said.
The survey tapped into 1.6 million top-earning households to reveal their profiles, attitudes, brand preferences, spending habits, investments behaviour, media consumption and more.
TopEnd 2013 was conducted in partnership with Caxton, Edcon, DStv, Pick n Pay, Nando’s, YFM, Toyota, Lexus and Sanlam.
More on BEE
The rise of the black middle class in SA
Loading ...