South Africa scores poorly for entrepreneurship support in global study

Source: Magnific

The report found that South Africa scored 3.9 out of 10 on the National Entrepreneurship Context Index (NECI), ranking it among the lowest-performing countries assessed and below the global average of 4.7.

Developed by Stellenbosch Business School, the University of Johannesburg, North-West University and the Small Enterprise Development & Finance Agency (SEDFA), the report evaluated 56 countries on factors such as access to finance, government support, regulation, education, infrastructure and market access.

Researchers said South Africa's entrepreneurs demonstrate ambition and innovation but continue to face an ecosystem that struggles to convert promising business ideas into sustainable, job-creating enterprises.

"The problems of a substantial gap between good policies and on-the-ground reality are well-diagnosed," said Angus Bowmaker-Falconer, research fellow at Stellenbosch Business School and co-author of the report.

"What is needed now is not new policies or additional funding, but the political will and institutional discipline to translate the policies and financial resources we already have into action."

South Africa's score has remained largely unchanged over the past five years and trails countries including Indonesia (5.8), India (6.1), China (5.4) and Brazil (4.0). The United Arab Emirates topped the rankings with a score of 7.1.

The NECI score is based on a national survey of entrepreneurs, investors, policymakers, researchers, educators and industry experts involved in South Africa's entrepreneurial ecosystem.

Despite the low ranking, the report argues that the country's ecosystem has several strengths, including a sophisticated financial sector, expanding incubator networks, established universities, growing digital adoption and a youthful population.

Professor Natanya Meyer, acting SARChI Chair in Entrepreneurship Education at the University of Johannesburg and co-author of the report, said many entrepreneurs fail to access available support because government programmes are fragmented and difficult to navigate.

The report recommends creating a single digital platform providing information on government support programmes, eligibility requirements and application processes, alongside targeted awareness campaigns, particularly for young entrepreneurs.

Researchers also called for measures to reduce regulatory complexity, improve coordination between government agencies and streamline compliance requirements for small businesses.

Longer-term recommendations include expanding entrepreneurship education, improving broadband access in underserved areas and increasing competition in sectors such as finance, retail, telecommunications and energy to create more opportunities for smaller businesses.

According to the report, micro, small and medium enterprises contribute around 40% of South Africa's GDP and account for about 60% of employment, yet many fail within their first five years.

The report concludes that strengthening South Africa's entrepreneurial ecosystem will require simultaneous action to improve policy implementation, reduce administrative barriers and foster a culture that values entrepreneurship over the long term.