“It is well established that a lively entrepreneurial sector has a positive impact on economies. This is because entrepreneurs bring increased competition, job creation and innovation to the table,” says Arnoux Maré, CEO of Innovative Solutions Group TM.
He understands the challenges entrepreneurs face because he started his business as a micro enterprise eight years ago.
“Entrepreneurs play a critical role in boosting economic growth, which is why they should be supported in their efforts through improved access to funding and skills development, as well as the creation of a favourable regulatory environment.”
Maré knows this because he grew his business into a multi-million operation without much support during the start-up phase. It took dogged determination and sheer hard work on his part to overcome the various challenges he faced.
This is why he believes entrepreneurs should be allowed to thrive, even when economies are struggling. To underline this view, he explores some of the major economic benefits to be derived from an active entrepreneurial climate.
When innovation is successful, it brings new products and services to the market as well as the potential to improve peoples’ lives.
Maré says individuals often resort to entrepreneurship when they identify a gap in the market and believe they have a viable (and profitable) solution to fill that gap.
“Others are unable to find suitable employment and find creative ways to generate an income for themselves. What often starts off as a seemingly simple idea can have far-reaching effects. Others have the technological know-how and financial resources required to satisfy a particular need in the marketplace.”
In Maré’s instance, it boiled down to identifying a need in the market and creating a service – staff outsourcing – to meet that need. Over time he was compelled to adapt his model to accommodate a shifting regulatory environment. His ability to embrace change ensured his business was able to survive and, ultimately, thrive.
“Irrespective of what leads people to becoming entrepreneurs, innovation and creativity are the amongst the most powerful driving forces. In this respect, innovation must be acknowledged as one the greatest benefits of entrepreneurism for any economy,”
South African has an unacceptably high unemployment rate, which hasn’t seen a significant shift over the past five years. Currently at 27.2%, the country desperately needs to find solutions to overcoming unemployment.
“It’s no secret that a flourishing entrepreneurial sector helps create jobs,”
“However, businesses need to evolve beyond being start-ups and grow into larger operations. To do this, they need the support of government and a regulatory framework that facilitates this growth.”
Research indicates that between 40% and 50% of the workforce in developed countries is employed in small- and medium-sized enterprises (SMEs).
“This is a strong case for nurturing small businesses in South Africa and helping them grow to the next level,”
Innovative Solutions Group TM is a good example of how a small start-up can grow from a single-digit employer to a massive operation that provides jobs for more than 10,000 people today.
Greater competition leads to more robust markets. When new businesses enter the fray, competitive activity increases. Existing businesses are compelled to up their game, improve efficiencies, reduce costs and pursue new markets. This is good for the economy and good for consumers.
Maré says successful entrepreneurs are disruptors and game-changers.
“They keep larger, more cumbersome businesses on their toes and promote transformation, which is essential for healthy and agile business environment.”
When entrepreneurs come up against saturated markets or formidable competition they often explore new markets outside of their domestic sphere. This generates foreign revenue and boosts the economy.
Maré says entrepreneurs tend to be more agile and open to new opportunities than established businesses.
“Entrepreneurs, by their very nature, tend to be out-of-the-box thinkers. They are often not constrained by borders – be they geographical or psychological – and find creative ways to transcend regulatory and other challenges."
No discussion about entrepreneurship is complete without mentioning social entrepreneurship, which is on the rise in South African and globally. These entrepreneurs offer viable solutions to social issues such as providing financial services to the under-banked or education programmes to marginalised communities.
“These initiatives draw previously excluded people into the economic sphere, thereby promoting an increase in economic activity. Many of these people, in turn, are enabled to pursue entrepreneurial activities of their own, leading to a decrease in unemployment and an overall improvement in living standards,”