Wise Words

Placing South Africa’s economy on a high growth path should also not be difficult. Whatever collectivist ideologues and development statists might have to say about the matter, the evidence shows clearly that countries with the greatest economic freedom, or more importantly those that are moving towards greater economic freedom have the highest growth rates.

Dr BC Benfield - Chairman of the Free Market Foundation

Read this! Now!

Screw it - Let's do it. Richard Branson.

Info

http://www.thisisgrimsby.co.uk/displayNode.jsp?nodeId=151720&command=displayContent&sourceNode=151488&contentPK=21308434&folderPk=86524&pNodeId=151459

13. A useful website

http://www.thespiritofenterprise.com/

http://books.google.co.za/books?id=GqO4lvaOkNwC&pg=PA469&lpg=PA469&dq=%22Behaviour+modification%22,+entrepreneurship&source=web&ots=0WG9K-UKSY&sig=MOPBRBbElpq3MUXnhG_uR1x1_jU&hl=en&sa=X&oi=book_result&resnum=5&ct=result#PPA277,M1

12. A nifty entrepreneuship questionnaire: For Young Entrepreneurs

http://www.entrepreneurship.co.za/page/for_young_entrepreneurs

For learners on the NVC programme - Do it - print out a copy of the results and place it in your POE.

People in the Know 1.

Prof. Kobus Visser, PhD (Stell), MCom (UWC), Hons BCom (Unisa), BCom (Stell), Higher Education Diploma (Postgraduate) (Stell), FIAC

Chair in Management. Professor in Entrepreneurship, Small and Medium Enterprise Management. Teaches graduate courses and researches in Entrepreneurship and Enterprise Development, Ethics and Leadership. Part of an international team teaching Entrepreneurship and Small Business Management in South-east Asia. Visiting professor at Jönköping University, Sweden and Gotland University, Sweden.

From: http://olduwc.uwc.ac.za/faculty_department/management/faculty_profiles.htm

11. The Branson School of Entrepreneurship.

Information About the Richard Branson School of Entrepreneurship

When the Branson School was launched in October 2005, it was the first time, anywhere in the world; Sir Richard Branson lent his personal name to a project.

Virgin Unite (Virgin’s charity group) has teamed up with social entrepreneur Taddy Bletcher, founder of CIDA, South Africa’s first virtually-free institution, to create the school, which is an intensive 18-month training program for CIDA graduates that aims to launch 30 small businesses each year.

A report by the Global Entrepreneurship Monitor in 2007 shows that South Africa’s economic growth is under threat because of a shortage of new entrepreneurs.

The Branson School of Entrepreneurship works to:

Identify and nurture individuals with entrepreneurial potential
Develop potential entrepreneurs in a practical, relevant and holistic way
Provide students with real-world business skills and mentorship
Promote entrepreneurship as a desirable career option and
Support start-ups and micro-enterprises with skills, mentors, services, networks and finance arrangements

Here students get their business plans ready for launch upon graduation. They have a virtual office, with a desk, computer, telephone, internet access, as well as a meeting room and boardroom facilities. They receive coaching and mentoring and are given exposure to successful local and international entrepreneurs. (In fact, the Maverick Business Adventure members are going to be working directly with students shortly.)

10. Making Poor Nations Rich

Making Poor Nations Rich
Entrepreneurship and the Process of Economic Development
Edited by Benjamin Powell
Foreword by Deepak Lal

Economists have often grappled with the question of how to help impoverished countries prosper, but they frequently overlook the central driver of economic growth: the entrepreneur. A close examination of entrepreneurship is especially timely, since the effectiveness of traditional development aid is increasingly being debated. Government-instituted economic reforms intended to stimulate economic growth often succeed or fail due to the extent that they help or hinder entrepreneurship. An international and historical comparison of policies and institutions that affect the productivity of entrepreneurs is invaluable for understanding how to make poor nations rich. (Introduction, ch. 1-4)

• After more than a decade of research, the empirical evidence is clear: economic freedom fosters economic growth. Countries that have climbed the Economic Freedom Index (e.g., China, India, Ireland, and Botswana) have brought more prosperity to their people, whereas countries that have reduced economic freedom (e.g., Venezuela, Zimbabwe) are poorer than they were a generation ago. (ch. 5)

• Western aid policies toward Africa have failed to reverse the continent’s economic decline. Most aid programs were crafted in Western capitals with little input from the people they were intended to benefit. Aid was used to support grandiose projects with little economic value and sometimes aid funds were looted. Rather than clean up their own houses, African leaders prefer to badger the West for more money. And the West, burdened by guilt over the iniquities of the slave trade and colonialism, obliges. (ch. 6)

• Latin America drew the wrong conclusions from the poor results of the process of reform in the 1990s. Despite some early successes (e.g., in reducing inflation, attracting foreign investment, and spurring the economy by lowering some barriers to trade), a great opportunity was missed. What really took place in those years was crony capitalism, not the decentralization of power through the desocialization of the economy, the spread of property, or the elimination of barriers to entry in all markets. (ch. 7)

• While Sweden and Romania differ in many ways, both underperform economically due to policies that impede entrepreneurship. In 1970, Sweden was the fourth richest country in the OCED; three decades later it had fallen to fourteenth. Since 1991, Romania’s economy has grown about 0.15% per year—roughly half the rate of slow-moving Kazakhstan (0.29%), and only a tiny fraction as fast as Albania (2.7%). Whereas Sweden needs to implement several reforms, such as opening access to markets, cutting taxes, and relaxing labor-market restrictions, Romania has reformed too often. The frequent changes Romania has made to its legal and regulatory environment have caused confusion and uncertainty among its would-be entrepreneurs. (ch. 8, 9)

• Although further improvements in economic freedom could be made, strides toward liberalization in China and India have probably lifted more people out of poverty than all other government anti-poverty programs combined. On a smaller scale, Ireland, New Zealand, and Botswana have also improved economic growth by making their countries more hospitable to entrepreneurship. Unfortunately, without a stronger commitment to private-property rights and economic freedom, continued improvements are precarious. (ch. 10-14)

Read the synosis:

http://www.independent.org/publications/books/book_summary.asp?bookID=70

9. Development orientation

I administered my Economic Orientation Questionnaire at a seminar of Local Government Business Facilitators (SA 2004)- here are the results:

The purpose of the questionnaire was to identify underlying attitudes towards economics and economic development.

If one wishes to accelerate wealth creation in communities one should look at the underlying drivers of wealth creation – for example: Not one respondent indicated that property rights could be considered as a factor in wealth creation. This may impact on the actions taken to accelerate the economic development in a region.

RESULTS

One third of the respondents mention BEE as the reason why some blacks are wealthier than some whites. It is sad to note that only four give some recognition to hard work and entrepreneurship as the reasons for black economic success. One would have hoped that persons responsible for development initiatives would be more inclined to acknowledge entrepreneurship as a platform for wealth creation.

When exploring the reasons for wealth within a population group more individuals were able to see that it is dependent on other reasons (more individually rooted, rather than the broader environmental situation) that help some to become wealthy

Only four persons feel that rich persons do not have to be privileged in some way to achieve success – the is quite the opposite to current research

A number of very positive attitudes were expressed by the group:

Wealthy people are predominantly seen in a positive light - 72% - so wealth and wealth creation is seen as good.

The following is VERY positive and bodes well for the future: About two thirds of the respondents (20) do NOT feel that it will be a better society if money was taken from the rich and given to the poor. As one respondent put it in a side note: “You cannot empower a small man by bringing down a big man". In keeping with this - two thirds of the participants do not favour nationalisation - what is of real concern is the third that do!

A staggering 27 of the respondents feel that workers are being exploited by factory owners. This indicates a very negative perception of the main instruments of wealth creation - factories. One will have to change this perception if one would want to encourage industrialisation.

Also good is the group score of 79% on their knowledge of how prices behave - 100% would have been nice seeing we are talking about Economic Development Officers!

Perhaps on the negative side is the high reliance on Government to solve economic problems. For example only 36% understand that protectionism does not help the economy in the long run - they indicated that tariffs on imported goods should be removed. One wonders to what degree they realise that they are the champions of the poor, since this will mean cheaper goods for the poor an helping our competitive advantage when it comes to exporting.

If one compares this low 36% with the 79% of those that said “Yes” to “Remove barriers to free trade”- which is essentially the same question – leads one to conclude the following: Disparities in scores of questions that explore essentially the same issues from different vantage points – indicate that more solid grounding in economic theory may be required.

Another example of this “split” thinking is that 23 participants - 70% - felt that taxes on business should be reduced. This is a substantial number of people that realise that businesses are the engines of wealth creation and taxes on business reduce job and wealth creation. 81% however said that small businesses should be subsidized! – they do not quite understand the relationship between taxes and subsidies.

A particular highlight is the fact that virtually all of the respondents - (30) said "remove laws that make it difficult to start a business" If this could be achieved in the Northern Province we will have a chance to exceed the 6% growth target set by the Deputy President.

SUMMARY

The responses tend to be very mixed - one can say confused, but the message is clear - there is hope for the free market in South Africa as proclaimed by its Government officials!

The group could benefit from some more exposure to modern economic and entrepreneurship development thinking.


If you wish to measure these and other concepts and perceptions that people hold - contact:

Charl Heydenrych
082 637 3710


Leaders in entrepreneurship development
proplib@tiscali.co.za