It found that businesses are now more confident than they have been for three years and, in the new climate of economic confidence, business decision-makers identified risk-taking as key to growth.
All global scores recorded this year were at their highest since the Business Index began in February 2011, suggesting that business confidence is recovering rapidly following the worst of the global economic crisis.
South African businesses are increasingly optimistic about their own prospects, rising 1.61 points to 65.80 points out of a 100. However, businesses are increasingly pessimistic about their country's economy. Confidence in the South African economy has fallen 3.11 points from 43.03 in 2012 to 39.92 in 2013. In contrast, confidence in the global economy is on the up, rising 2 points to 46.77 since 2012.
Nearly half (48%) of South African business leaders surveyed described themselves as risk takers, with 80% saying they needed to take risks in order to succeed, while only 32% of South African business decision-makers described themselves as risk averse.
According to 23% of South African businesses, the biggest challenge to doing business in the country is the preponderance of bureaucracy and business legislation. Furthermore, 15% name the government's handling of current economic challenges as an obstacle - more than any other country except Ireland, 48% argue that skills development and education are the most important issues the government should address in order to boost confidence, followed by bringing stability to exchange rates (47%) and reducing bureaucracy and business legislation (42%).
"We cannot make a dent in high unemployment without addressing education and training. The unemployment rate has been around 25% for the past several years and furthermore is not being assisted by weak economic growth," says Rob Wilkie, CFO of Sage AAMEA
Most South African businesses feel that banks and the government are behind the curve and are failing to make the most of opportunities for businesses. More than three-fifths (63%) of businesses agree that banks aren't doing enough to make funding available to small businesses and nearly half (48%) think the Government should put more pressure on banks to lend.
Just over half (53%) of South African businesses agree that they need to look at alternative funding sources.
Wilkie adds, "Interest rates at a 30 year low encourages businesses to spend and invest, thereby increasing economic growth. It is of little help however if banks are still reluctant to lend."
All scores recorded this year were at their highest since the Business Index began in February 2011, suggesting that business confidence is recovering following the worst of the global economic crisis.
Internationally, respondents felt that the prospects for their country's economy scored a global average of 48.85, an increase of 6.38 points on last year. While the prospects for the global economy scored a global average of 48.60, an increase of 6.01 points on last year.
Nearly half (47%) of business leaders surveyed described themselves as risk takers, with 73% saying they did so because they feel they need to take risks to succeed. While only 32% of business decision-makers described themselves as risk averse. In a snapshot of international attitudes to entrepreneurial risk-taking, UK businesses described themselves as notably more risk-averse than most, (39% versus 32% globally).
Globally more than two-thirds (69%) of businesses agree that banks aren't doing enough to make funding available to small businesses and a similar proportion (63%) feel that governments need to put more pressure on banks to lend.
Sage Group CEO, Guy Berruyer, said, "After years of financial hardship, business confidence is at a three-year high. Businesses around the world are more optimistic about their own prospects. This shows in their willingness to take chances to succeed. However, if businesses are to take advantage on the upsurge of economic confidence, then they need support and access to a wide range of funding sources, as in the US.
Our survey found that businesses in the US believe that the start-up and small business community should do the most to support itself, rather than looking to government or banks. More should be done to encourage investment in small businesses the world over. I believe that the development and encouragement of more diversified funding sources, such as angel investment, venture capital, peer-to-peer and crowd funding, should be a priority. Confidence is returning; a lack of support and access to finance now for small businesses could have detrimental effects on a national and international level."
Due to this perceived lack of support from banks and government, more than half (57%) of businesses agree that they need to look at alternative funding sources. However, while 42% of small businesses feel positive towards peer-to-peer lending and crowd funding, the majority (53%) feel they do not have enough information about it, while only 4% have already used it.
The Index also found that the biggest challenge for businesses globally was winning new customers, managing cash flow and attracting and retaining the right employees were ranked the second and third biggest challenges globally. Other challenges noted by businesses included automating and streamlining processes and expanding to new markets or geographies.
More broadly over half (51%) of businesses feel that the responsibility for supporting start-ups and small businesses falls on governments. In contrast, just 7% think that governments currently do the most to support them.
The only country where this trend was reversed was in the US where businesses are more self-sufficient. Unlike every other market surveyed, just 43% of small and medium sized businesses in the US believe that the government needs to put more pressure on banks to lend to small businesses, compared with 63% of all businesses surveyed globally.
Summary of key statistics
