[World Tour] South Africa: "There’s a genuine black middle class keen to set up their own businesses"

By June 26, 2014
Afrique du Sud

South Africa is seen as a springboard into the rest of Africa, and the country is very business-oriented. In order to encourage an entrepreneurial culture, the State has set up an incubator-like structure to assist young local entrepreneurs.

Interview during a broadcast of L'Atelier numérique (L’Atelier Digital’) on the BFM Business channel with Stefan Sakoschek, President of the Franco-South African Chamber of Commerce and founder of GIG, a company specialising in inspections and certification services.

L’Atelier: Is there a deep-rooted entrepreneurial culture in South Africa?

Stefan Sakoschek: The entrepreneurial culture in South Africa is emerging, in the same way as the country is. We should remember that the country is emerging slowly and painfully from 40 years of apartheid and 20 years of post-apartheid. Now however there’s a genuine black middle class keen to open up the country, to do business, and to set up their own businesses.

Is there any encouragement for this entrepreneurial trend, from the State or from private organisations?

The African National Congress (ANC) which has formed the new government, as it did the last one, has communist origins but is nevertheless very business-oriented. So although we have a very State-run economy, it is managed by businessmen. The current President, Jacob Zuma, and all his Ministers have in the past been in business to a greater or lesser extent. So there’s a very strong business culture. And the fact that the country is a member of the emerging country ‘BRICS’ club illustrates this drive.

How does the competitive spirit manifest itself? Have incubators been setup? Are any success stories appearing?

The Ministry for Trade and Industry has a department called the DTI, the Department of Trade and Industry, which really does the job of an incubator. Since the Internet boom in the United States around fifteen years ago everyone has been looking to attract investment. In South Africa there’s a lot of investment in innovations linked to the renewable energies sector. So in reality the DTI helps to promote at local level young entrepreneurs who are just starting up. In fact a budget has been set aside for this purpose. Then in parallel there’s a general appeal for foreign investors – Europeans especially, for everything to do with high-tech. This point was raised at the Franco-South-African summit which took place in October last year. Jacob Zuma spoke of the importance of South Africa opening up to foreign investors.

Since high-tech is one of the promising sectors South Africa wants to drive forward, does that mean that habits linked to the new information and communication technologies – Internet, smartphone, mobile apps, and so on – are now widespread, no matter which stratum of the population we’re talking about?

Yes, it’s a bit like the situation in Nigeria. The vast majority of the population owns a smartphone, including in the rural areas. Smartphones are an essential tool for communication and work. And 4G is up and running everywhere. There are also a lot of people developing local applications. Black South Africans are avid users of communication devices and cellular networks.

Are South Africans also looking to export their applications?

Absolutely. The example that immediately springs to mind is an app for electronic money transfer. Funds can be transferred via mobile devices. This app, which competes with Western Union, has been developed in South Africa and is being exported very successfully in the Southern Africa sub-region and to Nigeria.

Where does South Africa stand in relation to its neighbouring countries as regards entrepreneurship, innovation, and the new technologies? Is South Africa a driver?

South Africa is a springboard to the rest of Africa when it comes to infrastructure, population, and also education and so on. The country is a real engine for the Southern Africa region. So companies in the mass market retail and new technologies sectors can export their products and services very successfully to nearby countries. Success stories are more prevalent in the mass market retail sector than in high-tech. For example we have supermarket chains that have expanded to Namibia, Botswana, Zimbabwe, and Zambia. All of that comes from South Africa. So there’s a real drive coming from here. South Africa is also very rich in raw materials, and is a major exporter to Asia and China, and then re-imports these materials – perhaps too many, unfortunately – in the form of consumer goods. And these consumer goods are again re-exported to the sub-region. So that creates real export-import flows and some real fizz in South Africa’s port towns – Durban, of course, plus Port Elizabeth, and Cape Town as well.

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