Achieving equity through entrepreneurship
The unemployment rate in South Africa is increasing at an alarming pace, and even more so as a result of the COVID-19 pandemic. Entrepreneurship can be an effective, rewarding path forward for many low-income South Africans. Along with it being an effective way to create more employment in the country.
Entrepreneurs play a vital role in South Africa’s economy, especially in times of economic turmoil. They can change the way we live and work. And, if successful, their revolutions may improve our standard of living. Creating wealth from entrepreneurial ventures not only creates more jobs but improves the conditions for a flourishing society. Ultimately achieving equity within a community. And when equity exists, people have equal access to opportunities.
What is equity and why does it matter?
Equity can be defined as the quality of treating individuals fairly based on their needs and requirements. As opposed to equality that offers equal treatment for all. Equity ensures that all individuals are provided the resources they need to have access to the same opportunities.
Why does equity matter? Well, if someone starts from a place of disadvantage and is treated equally to a person coming from an advantaged background, then you perpetuate and ultimately grow the gap between the two. It’s important to have equitable measures to first close the gap and let everyone start with a level playing field.
An example of this could be someone coming from a disadvantaged background and being thrown in the deep end into a corporate position without having the necessary introduction. They would have an unfair disadvantage compared to someone within the same position coming from a more advantaged background, with adequate training.
While equality also aims to promote fairness and justice, it can only work if everyone starts from the same place and needs the same things. As there are still several inequalities within South Africa, it is a better idea to promote equity over equality. Which is where entrepreneurship comes in, as it allows people to operate at their level and grow from that.
Achieving equity in South Africa
Equity involves offering people what they need to enjoy a full, healthy life. The real strengths of equity are in ownership, power, a seat at the table, and a voice and vote that matter. All of these come with entrepreneurship, with being your own boss.
We know that setting up a business is a key means for the disadvantaged to empower themselves and break out of poverty. But we also know that entrepreneurship is harder for those coming from a disadvantaged background. Barriers include a lack of access to education or training, and limited access to ICT, market information and finance.
In South Africa, supporting the previously disadvantaged, women, and youth entrepreneurs in particular is extremely important in unlocking South Africa’s entrepreneurial potential. While there is still a lot of work to do, there are promising signs of change as we’re starting to see a more diverse mix of entrepreneurs.
Entrepreneurs coming from a disadvantaged background need business support and an enabling environment for them to grow and thrive. This includes financial support, improved financial literacy, access to ICT and innovative technologies, and to promote a responsive policy environment.
Achieving equity through entrepreneurship would mean that entrepreneurs have access to what they need to grow their business – including opportunity, networks, resources, and support. Making life easier for entrepreneurs is to support their empowerment.
Principles of an equity-driven growth model
How can South Africa pursue an equitable innovation economy? It begins with the following principles for achieving equity-driven growth:
Choose strategies that promote inclusion and growth simultaneously.
Target programs and investments to the people and places most often left behind.
Assess equity impacts at every stage of the process.
Ensure meaningful community participation, voice, and leadership.
How do entrepreneurs drive economic development?
There’s no doubt that entrepreneurship has many benefits, not just with achieving equity. Regions with a higher level of entrepreneurship show a higher level of output and productivity.
To put it simply, entrepreneurs create businesses and new businesses create jobs, strengthen market competition, and increase productivity. But, if you look a bit deeper, you’ll find that there are a few other ways that entrepreneurs drive economic development.
1. Investing in products and services that people need
New businesses are generally started to serve unmet needs and demands in the market. Entrepreneurs offer new services or offer new products that were currently not available. This enables access to goods and services that communities need to be more productive.
2. Providing employment and community development
Entrepreneurs create jobs, which uplifts and supports communities by increasing their quality of life. The lower the unemployment rate, the more equity there is in a community.
Entrepreneurs also regularly nurture entrepreneurial ventures by other like-minded individuals. As well as invest in community projects and provide financial support to local charities. Encouraging development in their communities, beyond their own ventures.
3. Exporting increases earnings and productivity
Entrepreneur-led businesses often expand into regional and global markets. More exporting, means more earnings coming into the region, contributing directly to a region’s productivity. The increase in revenue also strengthens the economy and betters the welfare of the population.
4. Introducing new technologies
Being able to turn ideas into new products and services that people need, is the start of growth for developing countries. New technologies and their creative applications drive economic growth. Which then increases the quality of life for everyone impacted.
5. Addresses environmental challenges
Entrepreneurship, and the innovation that comes with it, is so important when it comes to addressing the environmental challenges that we face today. From combatting climate change to lowering global greenhouse gas emissions and preserving our natural environment. There are many entrepreneurs who are focused on working towards a cleaner, more sustainable environment. Which, in turn, enhances economic development.
6. Impacting socio-economic objectives
Innovative businesses can help conserve resources, especially in the agricultural industry. Innovation in this area is especially important for addressing socioeconomic challenges like inefficiencies in our systems. New ideas and innovations can address these problems, again bettering overall quality of life for the surrounding communities.
Are you thinking about starting a business?
Starting a business is one of the most challenging, yet most rewarding things that you can do. It’s your chance to make a difference and to create economic freedom for yourself and your family. While our economic climate might be tough, especially now, South Africa needs more entrepreneurs. If you’ve got a specific skill or an idea to fill a gap in the market, why not take the leap and start working on your side hustle?
If you don’t have the initial capital, a personal loan or perhaps starting a crowdfunding campaign can get you started. While it’s not an easy task building up a business from scratch, the long hours and hard hustle are always worth it.