Access to funding and finding equity to progress their ideas from concept to roll-out remained a challenge for South African entrepreneurs, Black Business Council CEO Mohale Ralebitso said on Tuesday.
“The ‘own contribution’ component [for entrepreneurs and start-ups] is a major challenge that we are not addressing fast enough,” he said during an Investec Entrepreneurship Development Trust debate.
He added that it was important for finance institutions to recognise that intellectual property (IP) had value and include that value in their assessment of whether or not to provide funding to an entrepreneur.
“It is important to assign some credit to the value of IP, because not enough of those types of ideas are coming through as we don’t have enough of a venture capital environment [to fund that],” Ralebitso said.
He also encouraged South African entrepreneurs to align themselves with each other and find better ways of supporting and enabling each other’s businesses, adding that constant dialogue helped to refine the quality of ideas.
“Because we have finite resources, we must agree on what the key lessons are that we need to apply. We need to mobilise resources and that can’t be done if we remain strangers working from separate quarters,” Ralebitso said.
He further suggested that entrepreneurs needed to be integrated into the supply chains of big players in the economy, which would help them enhance their competitiveness.
Ralebitso stated that the biggest potential for growth for entrepreneurs in the country was in the manufacturing and agroprocessing sectors, adding that it was ridiculous that South Africa imported many finished products after having exported the raw materials needed to manufacture those goods to other countries.
“As we increase the level of IP involved in our manufacturing sector, it will have a knock-on effect of assisting other industries with sophisticated manufacturing technologies and a skills base that will start to be developed in relation to the demand that should be growing from our manufacturing sector,” he added.
He noted that this would not only leverage local demand but continental demand too.
“We also need to improve intra-African trade. We have to not only think of the local market, but also think of the role it plays in wider Africa,” he said.
Meanwhile, Investec CEO Stephen Koseff said South Africa was failing to create entrepreneurs and jobs.