Indentifying South Africa's four entrepreneurial archetypes

26 Nov 2015

SiMODiSA has conducted a recent study and research on the four main entrepreneurial archetypes in South Africa and how they can be understood to create a successful business and growing economy. This was done in collaboration with the Impact Trust and with the support of Omidyar Network Africa, FNB and SAVCA.

Through this research, it has identified entrepreneurial archetypes in the South African SME start-up sector. These archetypes are associated with specific and often localised ecosystem enablers that contribute to their success. An understanding of these four entrepreneurial archetypes, and how they might apply in the South African context, is vital for identifying priority constraints that hinder a thriving entrepreneurial ecosystem and in turn will contribute towards shaping the policy recommendation agenda for 2015 and beyond.

Four entrepreneurial archetypes

High-tech Entrepreneurship Model - Intellectual Property (IP) is developed at or near major research universities and research centres (government-funded innovation) and is commercialised, often with the help of angel investors and venture capital.
External Trigger Model - External events and/or circumstances trigger entrepreneurship, releasing many skilled and experienced people into the market, freeing them to start their own businesses. Entrepreneurial ventures become more feasible because of the sudden wealth of skilled, experienced workers in one place.
The Mothership Model - Businesses emerge from existing companies that spinoff smaller entrepreneurial ventures and/or employees who identify a commercial opportunity and set-up a new venture in order to pursue it. The 'mothership' or 'anchor firm' typically supports these smaller ventures as suppliers, customers or distributors.
Local Hero Model - The success of a great local hero inspires others to start businesses (inside or outside the local hero's industry). The type of exceptional individuals typically required for this model tend to be outliers and consequently, this model tends to be pursued less frequently and is recommended in the absence of the building blocks for the other models.

Strengthening systems

In order to realise an entrepreneurial ecosystem where any of these archetypes will be able to thrive in South Africa, it is important to strengthen the following components that affect all entrepreneurial ecosystems and types of entrepreneurs:

A favourable regulatory framework
Resources
Market access
Cultural support and entrepreneurial spirit

The figure below contains an overview of the key constraints identified in relation to each archetype, as well as those crosscutting issues that affect all entrepreneurs.

Matsi Modise, SiMODiSA MD, says, "Identifying key archetypes that exist within the South African entrepreneurial ecosystem and challenges that hamper their progress, is the first step in providing evidence based insights to guiding the public and private sector in their endeavours to support small businesses in South Africa."

This research and policy design programme seeks to identify key constraints and policy measures that represent critical barriers to the South African entrepreneurial ecosystem and refine and/or design policies specifically targeted to address these barriers.

It seeks to meet the needs of both start-ups and scale-ups to transform the South African entrepreneurial ecosystem into a more enabling environment, one that supports both the creation and growth of job-creating enterprises. The process demands coordinated action and collaboration, hinging on stakeholder engagement with entrepreneurs, practitioners, industry leaders, academics and government officials to identify and design practical policy recommendations that are in line with South Africa's National Development Plan (NDP).