About Gems, Tea and the Work of TSiBA Education

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What do gems and tea have in common? Entrepreneurship, of course!
GEM stands for the Global Entrepreneurship Monitor and is the world’s largest study of entrepreneurship. It is an annual assessment of the entrepreneurial activity, aspirations and attitudes of individuals across a wide range of countries.

Now where does the tea come in? The primary measure of entrepreneurship used by GEM is the Total early-stage Entrepreneurial Activity Index or TEA for short. TEA is the percentage of a country’s adult population (18-64 years) active in young (up to 3 1/2 years old) businesses.

GEM South Africa is based at the Graduate School of Business (GSB) at the University of Cape Town. Last night, I listened to Mike Herrington and his research team from GSB present the latest 2011 figures on the state of entrepreneurship in South Africa.

On the whole, the news for South Africa is not good. While there is much room for improvement, we do seem to be making slow advances. Here some highlights:
•In terms of early-stage entrepreneurial activity, South Africa is in the bottom fifth of the barrel. South Africa’s TEA index stood at 9.1%, whereas a number of countries with similar economies (the so-called efficiency economies) scored well over 20% (e.g. Argentina, Chile, China, Colombia, Panama, and Peru.)
•The average in comparable economies is 14.1%, well above South Africa’s performance.
•Of the BRICS economies, Brazil (14.9%) and China (24.0%) are doing very well. There was no data for India and South Africa only beats out Russia (4.6%)
•South Africa leads the pack in gender inequality. While the gender gap in South Africa is becoming smaller, it is still significantly higher than in the other BRICS countries.
•Concerningly, given South Africa’s high youth unemployment rate, entrepreneurial activity in South Africa is more predominant in older generations. South Africa loses out to every Brics country (even Russia!) in early-stage entrepreneurial activity among 18-34 year olds.
•On a positive note, it does seem that our TEA index is slowly improving over time. From 2002 until 2006, the TEA index hovered around the 5% mark. The World Cup 2010 seems to have bumped us up to 9% and in 2011 we managed to stay there.

There is clearly much work to be done in South Africa regarding the fostering of an entrepreneurial mindset. We at TSiBA Education can be extremely proud of the fact that this year’s GEM report showcases our work in fostering and nurturing the entrepreneurial spirit of South Africans. For more For more, see the interview with Leigh Meinert on page 13 of the report.

Peter Kraan

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