BEE reinforces white domination of business ownership

White, middle-aged men dominate the self-employed sector - 72% of entrepreneurs are white compared to only 20% black. In addition, almost 80% of the entrepreneurs who responded to the survey are male, while 84% of them are 35 or older.

Confirming a view expressed by the DA spokesman for economic development in Gauteng, Gavin Lewis, in Independent Newspapers' Business Feature earlier this year, the survey shows that political strategy has had a significant impact on the self-employed sector.

"If BEE had done one thing, it has diluted the natural supply of entrepreneurs by absorbing them into the easier and more lucrative path of buying into existing businesses on preferential terms," explained Alan Todd, research head of RamsayMedia Research Solutions, the company behind the survey.

Entrepreneurs needed for economic growth

Citing the European Union's Entrepreneurship Action Plan, which aims to encourage economic growth in response to the debt-driven crisis in Europe, he said more needed to be done locally to teach entrepreneurial skills and the value of starting one's own business.

"The role of entrepreneurs is critical in any society - their ability to bring new products services and entities to market creates jobs, which grows demand, which in turn stimulates economic growth. The South African education system is producing too few entrepreneurs to make a difference - our research shows that only 17% of the TopEnd segment, a total of only 272 000 people, are self-employed."

Entrepreneurs are innovators and risk-takers, but the rewards are worth it, the survey shows. The self-employed are wealthier than their employed counterparts and are more likely to own several properties, both residential and commercial - 18% own three or more properties, compared to 8% of wage earners. They are also more likely to own shares and unit trusts.

Entrepreneurs are far more inclined to have some sort of side line income stream than employees. Not only do they own their own businesses, they boost their earnings by dabbling in opportunities that come their way - they are opportunists.

More reports to come

The Entrepreneurs' Report is the second of five reports coming out of RamsayMedia Research Solutions' TopEnd 2013 Survey into South Africa's economic upper echelon. The survey tapped into 1.6 million top-earning households to reveal their profiles, attitudes, brand preferences, spending habits, investments behaviour, media consumption and more.

The first report, which revealed invaluable insights into South Africa's millionaires, was released in April. The remaining three reports, which focus on TopEnd housewives (the people who actually spend most of the household income), TopEnd black South Africans (those with a personal monthly income of more than R25 000 a month) and TopEnd technology and online activities, will be released in coming weeks.

TopEnd 2013 was conducted in partnership with Caxton, Edcon, DStv, Pick n Pay, Nando's, YFM, Toyota, Lexus and Sanlam. Their combined customer base allowed RMRS to reach a record 49 000 respondents, making TopEnd 2013 the biggest, most in-depth survey ever conducted SA's most affluent consumers: the top 11% of economically active South Africans who account for almost 50% of the spending, a very powerful and exceptionally elusive group to reach.