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Spreading the Wings of Angel Investing in South Africa.

Spreading the wings of Angel Investing in South Africa.

KIZITO OKECHUKWU | JULY 22, 2019

Source:  lowvelder.co.za

Start-ups face various challenges when launching their businesses, the most notable and obvious one being access to capital – given that at a very early stage, one doesn’t really know if a business will succeed and scale. Institutional and traditional investors are also more risk averse and prefer to deal with fledgling companies at a much later and safer stage of their business growth.

This is where the concept of angel investing comes into its own. It’s supported many start-ups to bootstrap and get their business to a level where they can access larger funding pools in the market. Angel investment has been around for hundreds of years, even though the terminology only really became known in the 1970’s and it’s basically capital support given by a ‘wealthy’ individual to a start-up to help them launch when other potential funders shy away.

Many deem angel investing as something reserved for the wealthy, yet the reverse is the case. Angel investing even translates into assisting a friend and paying for their education for example, because perhaps their parents could not afford, or their profile does not make them bank loan worthy. Who knows, perhaps the investee may go on to be a huge business success.

We all do angel investing in one way or another without really realizing it. So how do we garner more support and promote the concept – even to employees, CEOs and retired successful business people that have the capital, no matter how small, to invest in start-ups?

Many start-ups that are poised for success require as little as R50k to R3m at their early stage. Imagine if you invested R1m in Uber at its seed stage or in Facebook or another unicorn? Closer to home, imagine if you invested in South African start-ups Yoco, Sweep South or Jumo – or in Nigerian start-ups Andela, Kobo360 and Jumia?

The fact remains that these businesses have all withstood the test of time and have scaled to create much-needed jobs, provided greater benefit to the economy of their countries and changed how the world thinks and does things. Recently, we published a deal book for some of our promising, potentially unicorn start-ups, which we shared with some investor partners.

Back to angel investing. We have now partnered with Jozi Angels to launch the Angels in Residence programme at 22 on Sloane, which will potentially kick-off in early September and run every quarter for potential angel investors. The programme will help companies and their staff become more entrepreneurial, understand the dynamics and the opportunities in the start-up world and even familiarize themselves with some disruptions in their industry.

Jozi Angels led by Abu Cassim is a Joburg-based network of angel investors that invests in early stage start-ups. It provides capital, knowledge and business linkages; typically in exchange for equity. It also offers an entrepreneurial immersion programme that transports your employees into the energetic and exciting start-up world. What’s more, it creates like-minded leaders, drawing on the work of today’s best innovators,

resulting in a more productive and passionate workforce that is better equipped to identify opportunities in today’s innovation economy.

The programme includes a two-day sprint where your employees do deep-dives to learn more about intrapreneurship and start-up principles, including lean start-up methodologies and design thinking. They’ll then work alongside start-ups to implement learnings and get hands-on experience with specially designed challenges.

Unique to Jozi Angels’ offering is the period after the sprint. During this phase the programme will train your employees to become angel investors, sharing best practices and allocating a network member to mentor them as they integrate into the space. Being an angel investor allows your employees to have regular touch points with entrepreneurs, giving them further practical experience in the field and reference points to truly understand what entrepreneurship entails. Training will be tailored to your business sector to ensure there is alignment with their journey and your future.

This programme targets middle and senior managers within various organisations. Those that can drive change and create impact. Sprints of up to twenty people can be accommodated at our 22 on Sloane start-up campus from September 2019.

Today, I vehemently believe that as a continent, we must work together to build and sustain a strong angel investor community for the benefit of all our aspirant and early stage entrepreneurs. Tom Davies, the President of the African Business Angels Network (ABAN), which is a partner to the Global Entrepreneurship Network (GEN), has been leading the acceleration of angel investing in Africa. We should also refrain from leaving angel investing to the super-rich and rather, even with what little we have in comparison, angel invest in African start-ups.

In conclusion – a little motivating food for thought. Peter Thiel was one of the first investors in Facebook with USD500k, which later turned into USD1billion. Lance Armstrong invested USD100k in Uber in 2009. Today, Uber could be worth over USD120bn. I need not say more!

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

Mandela Day Should Be About Building Social Capital

Mandela Day Should Be About Building Social Capital

KIZITO OKECHUKWU | JULY 15, 2019

Photo: Nelson Mandela Day charity event poster.
Recently, I wrote on the importance of human capital in building a developmental and entrepreneurial state. I also attended an event hosted by Duke Corporate Education, titled the Davos of Human Capital, where all the speakers unanimously concurred and spoke passionately about the urgent necessity to build future skills by leveraging the power of people to create exciting, relevant and sustainable technologies for our years ahead.

Last year, in celebration of what could have been the 100th birthday of Nelson Mandela, I penned a compilation of Madiba’s most empowering and inspirational quotes – 100 to be exact. While compiling these, it quickly became evident to me that South Africa’s best-loved statesman wanted us all to feel a sense of shared identity, shared understanding, shared norms, shared values, trust, reciprocity and cooperation. He wanted to build a society with a network of relationships, where people support one another.

Recently, I wrote on the importance of human capital in building a developmental and entrepreneurial state. I also attended an event hosted by Duke Corporate Education, titled the Davos of Human Capital, where all the speakers unanimously concurred and spoke passionately about the urgent necessity to build future skills by leveraging the power of people to create exciting, relevant and sustainable technologies for our years ahead.

Recently, I wrote on the importance of human capital in building a developmental and entrepreneurial state. I also attended an event hosted by Duke Corporate Education, titled the Davos of Human Capital, where all the speakers unanimously concurred and spoke passionately about the urgent necessity to build future skills by leveraging the power of people to create exciting, relevant and sustainable technologies for our years ahead.

Last year, in celebration of what could have been the 100th birthday of Nelson Mandela, I penned a compilation of Madiba’s most empowering and inspirational quotes – 100 to be exact. While compiling these, it quickly became evident to me that South Africa’s best-loved statesman wanted us all to feel a sense of shared identity, shared understanding, shared norms, shared values, trust, reciprocity and cooperation. He wanted to build a society with a network of relationships, where people support one another.

Bluntly put, the concept of social capital is all about helping each other out. It involves creating connections and building solid, mutually beneficial relationships that can weather any storm during our todays and our tomorrows. For example, when someone is looking for a job, the odds are that most of us probably know someone who knows someone that can provide this job. Ultimately, it’s about “I’ve got your back and I know you’ve got mine.” We must create a proactive ‘caring society’ so to speak, by helping to provide opportunities for those around us. It is all about opening doors for the people behind us and even for those ahead of us.

According to the Organisation for Economic Cooperation and Development (OECD), social capital has existed for almost a century. It may first have appeared in a book published in the US during 1916 that discussed how neighbours could work together to oversee schools. Author Lyda Hanifan referred to social capital as “those tangible assets that count for most in the daily lives of people, namely goodwill, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit”. This gives an even broader sense of what’s meant by social capital, although today it would be hard to come up with a single definition that satisfies everyone. For the sake of simplicity however, we can think of social capital as the links, shared values and understandings in society that enable individuals and groups to trust each other and so work together.

On Mandela Day, we’re continuing our drive at 22 on Sloane to build social capital by gathering together a community of entrepreneurs, mentors, coaches, entrepreneur support organisations and other relevant parties. We are even challenging seasoned executives to network with our startups for 67minutes.

So, how do we build trust and how do we ensure that our start-ups build social capital by operating in a trusting, transparent and well-networked environment?

I think the Global Entrepreneurship Network (GEN) has gone a long way in helping to address this. The dynamics of the network we have built over the years instils a strong sense of trustworthiness and reputation, where for example, a US-based business knows it can trust a GEN-linked provider from anywhere in the world. Led by the President Jonathan Ortmans, the network has now expanded into 170 nations with millions of members.

Yet, I must stress that as an entrepreneurial collective, we never prevent or limit non GEN-linked providers from participating and encourage all to feel a sense of belonging to the network.

Going back to unpacking social capital, there remains much debate over the various forms that social capital takes, but one straightforward approach from the OECD divides it into three main categories:

Bonds: Links to people based on a sense of common identity (“people like us”) – such as family, close friends and people who share our culture or ethnicity.

Bridges: Links that stretch beyond a shared sense of identity, for example to distant friends, colleagues and associates.

Linkages: Links to people or groups further up or lower down the social ladder. The potential benefits of social capital can be seen by looking at social bonds. Friends and families can help us in lots of ways – emotionally, socially and economically.

In the UK for example, a government survey found that more people secure jobs through personal contacts than through advertisements. This is not unique to the UK and it’s a global phenomenon. Even in business, most people will prefer to work with people they know, have known of or at least were recommended by a trusted friend. Even times when we need a plumber for example, we prefer to get a recommendation from someone we know, or who knows someone. To this day, marketing experts still deem ‘word-of-mouth’ to be the strongest, most reliable and trusted form of advertising.

Trusting, networking and believing in one another also helps with crime reduction and creates a safer space to network. At the recent annual general meeting in the estate where I live, I noticed that 70% of our annual budget goes to security. Though we all applaud this as residents, but it begs the question of the lack of trust in our own communities where we must feel protected at each given time. Another great example is the Neighbourhood Watch system, where vigilant suburb residents hold regular interactive meetings and constantly share vital intel on burglary patterns, other potential safety and security concerns, as well as trusted service and product providers, from garden services to babysitters.

To celebrate Mandela Day, we will be hosting an open day at 22 on Sloane. Stakeholders can pop into our campus, meet our start-ups, build a relationship with us and identify ways in which they can help to build the next generation of socially- impactful and capitalised entrepreneurs.

We also want to help existing big businesses design their future and understand which start-ups are disrupting the industries in which they operate. A few tickets will be on sale and lunch/snacks will be served. All proceeds from the event will be donated to the Minerva High School in Alexandra Township and Sunrise High School in Diepsloot. We’ve also invited some kids from these two schools to join us for the day.

In closing, we must acknowledge and appreciate that human and social capital are interlinked and inseparable, where social capital promotes the development of human capital, which our beloved African continent needs desperately.

Let’s not forget the sage words of Nelson Mandela, “life is about building good relationships at the individual and collective level”.

Happy Mandela Day and don’t forget to spend your 67minutes with us at 22 on Sloane startup campus!

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The Economics of the Animal Kingdom

KIZITO OKECHUKWU | JULY 08, 2019

Photo Supplied: Vodacom Durban July took place on Saturday 6 July

This past weekend, the glitz and glamour of the Vodacom Durban July took place and attracted the usual affluent suspects and who’s-who from various industries. Although a friend said I could hitch a ride with him to the event, I abstained as duty called, but it is still on my bucket list.

Last year’s winner “Do it Again” did it again and pipped others to the post to snatch the whopping R4.25m prize. Staying on the money, various reports have estimated that the event raked in close to R400m and I believe that today, the horse racing industry is estimated to be worth R3bn in South Africa.

Before I get into the crux of this piece, I must confess that I have developed an estranged relationship with animals over the years. It first began when I was working on a pig farm at my boarding high school (where I was also bitten by a scorpion), visiting a snake petting farm in the Western Cape, which creeped me out, to eventually not wanting to have dogs at home, even when my family wanted to – fuelled by the fear that a buddy of mine was badly bitten by a dog during our youth.

But now I look at animals in a different light, an economics one to be precise. First, let’s get a snapshot of the wealthy equestrian-loving environment. For example, the Noordhoek area in the Western Cape is arguably one of the country’s leading ‘horsey’ havens and hosts regular dressage and jumping events for all ages and offers many top-end places for stabling.

But the costs associated with this sport (or dare I say ‘past-time’) are staggering, according to someone I know in the area. For a well-bred horse (with partially guaranteed re-sale value), expect to pay from R250k upwards to around R1.5m. Then there’s stabling at R7500 per month, a decent horse-trailer for around R100k, six weather blankets at R2k each and a good saddle will set you back around R30k. Also, don’t forget the jodhpurs and boots, regular chiro, physio and dentist appointments (not for you, for the horse!). The list goes on and on and many costs, besides the horse, are not once-off either. Yet this elitist micro animal economy is thriving and creates and sustains many jobs, for both the skilled and unskilled.

The animal-based industry presents lots of opportunities and seems to be a good future investment arena. Globally, it could be worth hundreds of billions, if one considers the abundance of pedigree dog-breeders, exotic birds (like parrots, etc.), other pet species and the obvious myriad of food sources it provides, such as chicken, beef, pork and fish.

Looking abroad, Mintel estimates that people in the UK will spend £2.1bn on pet care products and services by 2023, a 25% increase from an estimated £1.7bn in 2018. One of our start-ups, Anylytical Technologies recently built a technology for the UK market to manage mad cow disease.

Locally, some innovative local start-ups have also taken advantage of the lucrative nature of the animal industry and have developed business concepts to lure people that would not usually invest in it. “Shares are complicated, cows are easy” says Ntuthuko Shezi, founder of Livestock Wealth. The company invites individuals to invest in cows and track them through their app as they grow and develop, while also earning an investment return.

The land expropriation debate remains a thorny and sensitive issue in South Africa. Yet, if implemented with due and fair process involving all key stakeholders, it could present a wide array of opportunities for newcomers into the animal industry, such as opening more abattoirs to produce meat for export.

Usually when I travel abroad, the first thing some people say is “Oh, you’re from Africa! I’m dying to go on a safari there to see all the wild animals”. It’s no secret that private game parks and wild animals are big business across the continent and South Africa has the crown jewel with the Kruger National Park.

According to The Valuator Group, the number of game farms in South Africa since 1980 has risen at a phenomenal rate and today there are over 2000. This rise was due to three new trends. The first was a related rise in the number of game auctions, the second was a big increase in high-priced hunting establishments catering for the affluent amateur hunter (operating under very strict government controls and conservation principles).

 

The third new trend has been a swing towards estate management and controlled breeding programmes. These innovations ensure that, as in the agricultural sector, the stock is continually improved along with the animals’ appearance and their ability to resist disease and tough climatic conditions. Certain game farm breeders have also become exceptionally clever in learning how to breed the rarer, more exotic species such as black and red impala and golden wildebeest, which command very high prices. The escalation in the price of wild animals has been higher than any previous forecasts and in some cases world records have been set. I recently read that a buffalo bull sold for R40m, a kudu bull for R9m and a sable antelope bull for R12m.

 

For most of us, animals form a large part of our lives, whether for breeding, investment, fun and recreation, companionship or just as a food source. As the animal industry fast becomes rifer with prospect, we must find ways to open doors for new entrants in the industry, such as our youth, and help create a plethora of much-needed jobs.

 

Back to what spurred my interest in this topic. I just wonder if all the attendees at the Vodacom Durban July were there for the horses and the betting, or was it just a cool place to network, dress up and mingle with South Africa’s diverse and colourful mix of culture and creed – and jointly release their wild sides…

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

Building a Developmental and Entrepreneurial State

Building a Developmental and Entrepreneurial State

KIZITO OKECHUKWU | JULY 01, 2019

Photo: International business team with papers in city.

Recently, I heard a few stakeholders mention that South Africa should be an entrepreneurial state. The President also mentioned this in his recent parliamentary speech. Yet over the years, South Africa’s notion was to be a developmental state and now it seems to be moving to an entrepreneurial one. This led me to think what makes an entrepreneurial state?

There are so many metrics on how one can measure whether a state is developmental or entrepreneurial. One cannot write about an entrepreneurial state without thinking of Mariana Mazzucato, who argued in her book that the result of the USA’s economic success has been due to state-funded investments, innovation and the government’s role in leading industry developments. In the same light, one cannot ignore the thinking of the late Professor Chalmers Johnson who coined ‘developmental state’.

To summarize, a developmental state simply means the ability of the state to rapidly industrialize, control and develop policies that will foster the growth and development of its nation.

An entrepreneurial state basically looks at the ability of the state to build a knowledge economy, innovate, and also privatise key institutions that will enable the growth of the economy. Of most importance, is to become a risk-taker.

Which one is South Africa? Many argue that these terms have been politicised and there is no evidence that suggests we have achieved one or the other. The micro-governance issues being faced by municipalities (among many others) are evidence that the concept is misconstrued in our case, where some officials see flouting rules as being developmental.

The recent report by the AG on the calamitous state of most of the municipalities is quite incomprehensible and drew the fierce ire of most South Africans on a radio show last week. During my recent chat with some public and private sector representatives, many argued that the Public Finance Management Act (PFMA) is to blame for these problems because it is very rigid and does not consider the environment where many institutions and project operate from.

Whether entrepreneurial or developmental, our systems and actions are meant to be the empowering machines for our respective communities. Yet they’re having a crippling effect on many start-ups and SME’s within the entrepreneurial ecosystem, which are constantly experiencing infrastructural and other supportive challenges.

In relevance to the above, according to the ANC’s Jackson Mthembu piece just this weekend, “A capable developmental state requires effectively coordinated state institutions with skilled public servants who are committed to the public good and capable of delivering consistently high-quality services, while prioritising the nation’s developmental objectives”.

Moving on, I argue that South Africa can be both a developmental and entrepreneurial state and I have provided a few key points on how we can achieve this focusing on three key areas.

– Value Creation: This is one of the most important part of building a developmental and entrepreneurial state. Any work can create value, but one must ask, how much value? Value is created through an irreversible process which gives a resource greater usefulness to other humans. Manufacturing companies create value by acquiring raw materials which it uses to create an end-product that is valuable to the consumer. For a country to create value, it must first prioritise its people. People are the greatest value creators and we must build and change the mindset of our people to see value in themselves, while government works to build an ecosystem that can bring out the best in its people. The Porter’s value chain matrix thinks of primary and support activities needed to achieve this. The key thing is also looking into our primary industries, manufacturing, services and building human capacity that will build the country. The Human Capital can also be exported at a cost to other countries. Countries that has achieved greatness did that through the competitive advantage of human capital.

– Governance: Governance also needs to look at the condition of the state to govern its people. Its ability to develop policies focused on economic development and growth. Improved macro-economic conditions (create a stable economic climate of low inflation and positive economic growth). Free market supply-side policies – privatisation, deregulation, lower taxes, less regulation to stimulate private sector investment.

– Creating the Future: To create an entrepreneurial state, we have to be risk-takers and acknowledge that the future is always uncertain, although we believe that it will be bright. We must create the future that we want and build ecosystems that will make that future being realised. An entrepreneur takes risks and the state must be able to lead the creation of entrepreneurial thinking, actions, institutions and entrepreneurial capital. Though many will argue that this is a private sector role, the fact remains that private sector will only really engage when they believe that the state is leading the process. Risk-taking will always be a given; whether its investing in new innovation, providing capital for start-ups and driving growth, the state can play a pivotal role in the country’s development by risking its capital at a very early stage to invest in initiatives that could potentially generate wealth for the country.

To create an ideal state, it is healthy to dream big, but it’s crucial that we first fix the little things that can make a big impact on the future of our people, country and continent. Without building our human capital, we will not be able to achieve the desired economic value.

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

22 on Sloane Youth Empowerment Programmes

22 on Sloane proud to provide its third year of youth empowerment programmes

KIZITO OKECHUKWU | JUNE 24, 2019

Photo: Youth taking part in the Youth Weekend Programme at 22 On Sloane.

As Youth Month comes to an end, we must ask ourselves, what have we done differently to make our communities, cities, countries and continent better?

Last week, President Ramaphosa delivered his State of Nations Address (SONA). It was praised by some, but also criticized by some because of its dream-lined fantasies and undertone. Most argued that concrete steps about turning these dreams into reality should have been provided. My guess is that these concrete steps have to be provided by each individual Departments led by the Ministers that he’s appointed.

One cannot also blame these reality-seekers. We are swamped in a code-red youth unemployment crisis, which needs rapid, laser-sharp solutions. Yet we can’t place the blame solely on the President because, as a leader and former businessman, his key focus is on attracting direct foreign investment to create these jobs – and investors need a dream, a vision, to believe in – and assurance that the future is indeed investable.

We’re also not alone here. This is a global problem, although, it seems some countries are better prepared to tackle this problem than others. Recently, Multichoice announced it’s about to cut up to 2000 jobs because of the rise of new technologies. One cannot ignore the fact that competition in this industry has increased dramatically over the past few years with entrants such as Netflix, Amazon Prime, Black and others joining in.

Yet job cuts are quietly becoming a swift reality in all industries, as the need for human resources continues to decline. Take Standard Bank for example, which has begun cutting down on brick and mortar branches, preferring to offer a more streamlined and digitized experience. Many more are soon to follow and I believe the emphasis will be on those linked heavily to connectivity, such as financial services, where fintech start-ups are now disrupting the market. Facebook has also just announced its plans to launch Libra, which is a Cryptocurrency that processes payments via its WhatsApp platform. Other industries include insurance and retail, which employ most of the low-skilled workers, especially in call centres and customer services.

On the flip-side, in the public sector, Eskom is expertly-deemed to be a whopping 66% overstaffed with a massive wage bill. Cutting those jobs (mostly redundant, middle-management ones and not those tech-threatened) could actually help save Eskom financially in the long term.

For South Africa, speed is of the essence. It’s feeling the pressure because it has the advanced infrastructure to embrace and exploit digital solutions to compete globally, yet hasn’t really done so, whereas a lot of African countries still don’t even have the capacity yet.

Thankfully, in 2017, we foresaw many of these challenges, prompting us to launch the Youth Weekend Programme that targets young people aged from 13 to 17.

The programme aims to develop an entrepreneurial mindset and groom the next generation of founders and game-changers, who seek to improve the communities where they live and also advance disruption in various other industries.

The programme usually runs for six months on selected Saturdays and covers the following modules: Introduction to design thinking and entrepreneurship; Concept development and testing; The consumer value proposition; Disruption and future industries; Designing a winning pitch; Coding and drone technology.

After completing the modules, participants have the opportunity to enter the Youth Innovative Business Competition, which drives innovative thinking and the creation of youth-owned business ideas that are presented to a panel. Cash prizes are up for grabs and the chance to attend the Global Entrepreneurship Week, hosted by GEN Africa at 22 on Sloane in November 2019.

Last year, we had ten participants from the suburbs and we judiciously matched them with another ten participants from the Diepsloot community, which we subsidized with the payments made from the suburban kids’ parents. The programme also boosts community interaction with idea exchanges, all of which help build a brighter future for the youth.

This year, we hope to do the same and the first programme will start on Saturday 6th July. For more information, please visit www.22onsloane.co/youth-weekend-programme/

Today, there are many youth development programmes and we are proud to be a significant part of the mix as key stakeholders, working together to empower the next generation of young, aspiring entrepreneurs.

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

Advancing Our Youth must be a Team effort

Advancing Our Youth must be a Team effort

KIZITO OKECHUKWU | JUNE 18, 2019

Photo: Prince Albert II of Monaco at the launch of the Monaco Sports Academy (MSA) on Friday 14th June.

Last week, I had the privilege of attending the launch of the Monaco Sports Academy (MSA) under the auspices of His Serene Highness (HSH) Prince Albert II of Monaco.

This initiative is a collaboration between the Yacht Club de Monaco, presided by the Prince, its General Secretary Bernard d’Alessandri and Philippe Ghanem. The primary objective of the MSA is to groom and support young athletes living in Monaco to reach their highest levels in sport.

Coincidently, South Africa is now celebrating Youth Month, which has a special significance in the history of the country. It recognises and remembers the brave young activists that lost their lives during the 1976 uprising in Soweto on June 16th. Personally, the month of June and day 16 has a special place in my life too given that I celebrate my birthday on this auspicious day.

The power of the youth can never be underestimated, and it must be taken very seriously. Take the recent uprisings in Sudan and Algeria – and the massive protests in Hong Kong, all largely led by the youth.

To put this into context from a youth perspective for the article, I would like to share a few simple, yet inspiring sports analogy take-outs I learnt from the MSA speakers during the launch especially from Yohann Taberlet the renowned French Skier; ones which are generic enough to really help and motivate myself and other young people to never give up finding ways to better both ourselves and the world we live in.

If your job is your passion, it won’t even feel like a job! So choose something you love doing.

Identify your objectives and priorities. Yes, you will have many choices, but you must have priorities and create the means to achieve these.

If you want the boat sailing fast, you need a team. When you’re in a team, it’s your family. Remember, your family and friends are also your team.

Your path is so important. A coach will help you take the right one. It’s not about the target, it’s about the path to get there.

I used to cry after losing a game, but year-in and year-out, I learnt the pleasure of winning. Sports helps with physical and mental health.

Have a goal. You’ve got to dream it, believe it and live it. There’s no ‘ifs’ or ‘buts’, when you want to achieve your goal, just go for it.

You reactivate what you experience. It’s all in your brain. And you can alter 50% of what’s in your brain.

Be careful, emotions often take over our rationality.

Allow yourself to make mistakes. Once you can do that, you make less and less mistakes.

Sport is a universal language and on the basis of that you can create a dialogue. In sport, people leave their religion, emotions and fears, etc. behind.

Energy, mind and body must work as one.

Persistence and passion is the basis of your success.

You can’t know how strong you really are until you test yourself. Don’t be afraid.

You have to be in action to see the reaction of life.

Mental power can help influence positivity in any environment and help you to stay on course.

Sport plays a pivotal role in building tomorrow’s youth and it shares such obvious common values, characteristics and objectives with entrepreneurship. After all, they’re both all about the mentality, the attitude, the self-belief and the willingness to go the extra mile.

As the only yacht club offering this high level of training to athletes, the approach maintains a balance between their sporting, academic and personal lives, in the belief that long-term constructive investment in the future generation will lead them towards a life where values shared by top-level sport and professional success will prevail.

Monaco, a recognised yachting capital, constantly seeks ways to drive this innovative, hi-tech and progressive industry forward. As a key player promoting and guiding the sector, the Yacht club de Monaco aims to interest and integrate young people to share this passion through instruction, sharing experiences and intergenerational exchanges.

From the throngs of wealthy tourists that frequent the principality in roaring top-end supercars and the opulent lifestyles of yacht-trotting billionaires to the residents who, I was told, pay an average of €48 000 per square metre to own a home here, overall, my experience in Monaco was an absolute eye-opener.

What’s more, I was very excited to realise that there’s also a healthy and vibrant start-up scene, after chatting with Monaco Tech, which supports local start-ups.

Yet, on my way home, I could not help remembering that South Africa’s youth unemployment rate sits at 55%. Another stark reminder is that the African Development Bank (AfDB) has warned that 100 million African youths, who would be new entrants into the labour market, will be unemployed by 2030 if the current trend is not reversed.

In its African Economic Outlook report, the Bank predicted that most of the jobs will be generated by the informal sector where “productivity and wages are low and work is insecure, making the eradication of extreme poverty by 2030 a difficult task”.

Raymund Furrer, the Bank Governor for Switzerland and part of the Boost Africa initiative, which aims to create 25 million jobs in 10 years, says that these days it’s important that partners work together to put talents together in a complementary fashion. These are two areas which are forward-leaning and positive for the African continent.

There is no doubt that advancing the youth towards a brighter future is going to need a massive team effort from all (especially governments) that recognise that uplifting and empowering the youth is of international importance.

Our youth must have something to believe in and it’s us, as a collective, who have to provide this. Youth Month is the ideal backdrop to reflect on what more we can do to move our young society forward and create a conducive environment for their growth and leadership.

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

GES 2019 thinks of: The Future Now

GES 2019 thinks of: The Future Now

KIZITO OKECHUKWU | JUNE 10, 2019

Photo: Queen Maxima being welcomed at the GES by the Dutch Minister of Foreign Trade and Development

While driving from Amsterdam to The Hague to attend the Global Entrepreneurship Summit (GES), I couldn’t help noticing the plump, almost cartoon-like cows and the lush, protein-rich emerald grass, which I presume has made them so healthy. I also noticed many young and old using bicycles to get from their A’s to B’s, thereby minimising carbon footprints.

Yet I digress. Another thing the Dutch take very seriously is the power and impact of start-ups. The GES is the preeminent, by invite-only gathering of entrepreneurs and investors, which attracts some 2000 attendees. It’s also a platform that the US government uses to build partnerships with host countries and explore ways to advance enterprise development.

This year, the GES was hosted by the Dutch government in The Hague, attracting some 1200 competitively selected entrepreneurs, 300 investors, 500 guests and other hand-picked entrepreneurial champions. Among the A-listers at the summit were the US Secretary of State Michael Pompeo, the Dutch Prime Minister Mark Rutte, the Mayor of Hague Pauline Krikke, Her Majesty Queen Maxima of the Netherlands (whom I believe also cycles to meetings), Prince Constantijn, Ivanka Trump and the Dutch Foreign Minister of Trade Sigrid Kaad, next to whom I found myself seated at the Investor lunch on Tuesday. There were also other ministers and key figures from both the US and Dutch governments, NASA, CEOs from MasterCard, Softbank, Silicon Valley Bank and OPIC, to name just a few.

Pomp and ceremony aside, all the speakers were well-informed and brilliant, and I think this is one of the most insightful and inspirational GES’s ever held, offering great content and establishing invaluable networks.

I would like to focus specifically on her Majesty’s speech and also add a sprinkling of content from other speakers into the mix. But first, we cannot ignore the role of Dutch start-ups across the world with their inventive innovation and the support they receive from their government. At the GES, the Dutch government committed €65million to the Dutch start-up lobby group Start-up Delta, which was renamed at the event as Techleap.nl. Its main aim is to position the Netherlands as a unicorn nation globally and build partnerships with selected key nations.

All of us at the GES committed to a different future and a better future by being part of the ecosystem that creates and innovates using technology as the primary and sustainable game-changer. We also need to ensure our approach is inclusive and bridges the divides, while we strive for a fair game and create ideal conditions for investment that helps everyone.

Queen Maxima opened her address by saying that “we have to keep the road liveable for everyone. To achieve the Sustainable Development Goals (SDGs) is to achieve sustainability. The GES aims to tap into convening the power of private/public partnerships. There are so many business opportunities to be found in social issues that will create lasting impact. There is no zero sum game when society is your big client. What divides us is smaller than what brings us together. As the Netherlands, we consider ourselves as a gateway to the future and to Europe. For global challenges, there is always a Dutch solution, provided we keep investing in entrepreneurs, we are on the right path”.

Photo : Photo: The US Secretary of State, Mayor of Hague & Dutch Prime Minister

The Queen reiterated that an entrepreneurial culture is the foundation of any thriving economy. Entrepreneurship is a key part of our nation’s agenda. About 1.7 billion people globally cannot access financial services and we have to do something about this. Many MSMEs lack financial access to scale their businesses. Traditional entrepreneurs have been the backbone of various economies over the years. Today, we are seeing the rise of young start-ups that are using technologies to disrupt various industries. Technology enables various sectors like health, water, agri and financial services, etc. Governments in developing economies should also guard against the possibility of businesses growing into monopolies or oligopolies.

She added that “as new technologies appear, the likelihood of a winner-takes-all situation could be more pronounced in emerging economies, especially in the digital space. It’s therefore important for regulators in developing countries to mitigate against excessive market concentration.

For all these things to work in an inclusive and fair way, we will need certain prerequisites. These include cyber security, digital ID systems, customer data protections, financial and digital literacy, data privacy and connectivity to all segments of the population.”

Here are six key points that, according to the Queen, need attention:

– Access to finance: Lack of credit history makes it difficult for young firms to access finance.

– Technology: Technology and digitization can help reduce costs and help entrepreneurs to scale much faster.

– Customer-centric: This is key for usage, scale and impact. For example, Go Jack, an Indonesian start-up has now scaled and offers 18 different services, including a digital wallet.

– Enabling environment: Government must provide a conducive environment. The speed and complexity of new technology can be a problem for some governments, but regulation should not stifle the innovation and growth of start-ups. My fintech working group recently released a report on how policymakers can regulate without hindering innovation.

– Level playing field: Entrepreneurship should be inclusive. Women receive less funding in early stage start-ups than men – and sadly, women start-ups deliver way more than male start-ups.

– Strategic partnerships: Business does not operate in isolation. We have to look at open innovation because this accelerates innovation when we work together.

Summing up, she said that “at the end of the day, technology needs to improve the lives of everyone. We must support the global spirit of entrepreneurship, so together we can all have a better world”.

According to the COO of Softbank, Facebook has only disrupted 1% of the world’s GDP while Amazon has disrupted 5%, so we still have 94% to be disrupted. He then posed the questions of how do we have things that move connect with things that do not move? How do we integrate technology in a safe way to secure the future that we all want to live in?

The European Commissioner focused on the waves of progress, saying that on the first wave, Europe was the leader. America took over the second wave and he thinks that Europe will take the third, because it has the passion for deep technology in a deep wave.

Personally, I think Africa has a vital role to play on the third and fourth wave, although the reality is that we are too far in the development chain to achieve this yet. Our leaders have to work together to advance Africa’s development.

So as Africans, how do we have smart regulation? How can we regulate the future we do not know? How do we open opportunities for African start-ups? How do we ensure that African start-ups move from ideation to commercialisation? How do we make it easier for African start-ups to access credit and scale? How do we advance Africa’s development in a sustainable way?

I firmly believe we should regulate principles and not products as other speakers concurred. Entrepreneurs have a vital role to play and must be invited to sit in open, transparent forums with politicians and regulators.

Because the future is now!

Remember those Cartoon-like cows, we had a taste of it at the closing ceremony of GES at Scheveningen beach!

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

African cities can learn from the South Korean Development Model

African cities can learn from the South Korean Development Model

KIZITO OKECHUKWU | JUNE 10, 2019

Photo: Night descends upon the bright lights, hustle, and bustle of Seoul.

The concept of “cities and cities” was conceptualised during my trip to Togo a few months ago. While having a discussion with my long-time friend Simon Rweyongoza, we analysed Africa’s development and explored what it will take to re-invent it.

Also influencing this piece is my recent interaction with the South Korean Ambassador to South Africa, His Excellency Dr Jong-Dae Park, who visited 22 on Sloane in April and invited me to a seminar which he hosted at the Institute of Security Studies in Pretoria.

The seminar was themed Endless Opportunities: Africa’s Fourth Industrial Revolution. Among the speakers were Ottilia Anna Maunganidze, Head of Special Projects at ISS, Dr Martyn Davies from Deloitte and Marius Oosthuizen from GIBS

Some of the speakers argued that Africa has to go back and ensure that it achieves the 1st, 2nd and 3rd industrial revolution before thinking of the 4th. The issues of bad governance and lack of good management were also pinpointed as key factors that were inhibiting the advancement of Africa’s development.

During his visit to 22 on Sloane, Dr Jong-Dae Park gave me a book he wrote on Africa titled “Re-Inventing Africa’s Development”. This gave insights into how linking Africa to the South Korean Development Model will help the continent advance towards success. A book written by an Asian diplomat on African development speaks volumes on where and how we have missed the mark – and continue to do so – and how we can get back on track to build our cities, countries and continent.

So what makes Dr Jong-Dae Park’s book so relevant to Africa you may ask? What makes Seoul different from say Johannesburg, Lagos, Nairobi or Kampala?

The economy of South Korea is one of the largest in Asia and one of the top ten in the world. From being one of the poorest countries, it rose to become one of the most highly-developed and richest in just a few generations. As the Ambassador mentioned in his book (and I paraphrase), “South Korea moved from being an aid recipient to an aid donor, making it a prominent example of successful economic and political transformation and the South Korean contemporaries are living proof of this experience”.

In many ways, the smart city concept is simply good urban planning that incorporates both advances in digital technology and new thinking in the age-old city concepts of relationships, community, environmental sustainability, participatory democracy, good governance and transparency.

Often, the intelligent city concept involves a re-urbanization of cities, encouraging urbanites to focus their time, energy and abilities on the ongoing urban project through a new layer of electronic connectivity. A virtuous circle is thus formed, in which the city empowers its citizens to power its evolution, creating a positive feedback loop. Above all, smart cities are interactive cities.

So how do we build African cities that mirror the South Korean Development Model? Although I have not finished reading Dr Jong-Dae Park’s book, I did find three key points that can help us rebuild or reinvent our cities and towns.

Strong role of government: Government is very critical in the development of any country in the world, in policy, management and driving active citizenry. Many authors have written pieces on why Africa still lags behind and the suggestions seem unanimous that our challenge on the continent is a management one. Many governments in Africa still lack the skills and willingness to drive their country’s development. Although many still argue that the colonial past hurts us, which is acknowledgeable, the cold hard truth is that it’s simply poor management. What’s more, a severe lack of good, visionary leadership has hampered our development and where many from outside the continent see opportunities, our youth sees despair and clamours to get a better life outside of it.

Active entrepreneurship of corporations: No matter how big or small, we have to actively advance the importance of entrepreneurship and help companies to advance this internally, while supporting the growth of new businesses. Entrepreneurship is all about designing, disrupting, creating, building, scaling and innovating. The world’s dynamics continue to change rapidly, so too must we. As the IBM CEO, Ginni Rometty said last week, “corporations owe it to society and their shareholders to help prepare people for AI-driven changes to the workforce”. In a world where it is expected that AI will impact every existing job, she said business leaders have an important social, corporate and economic responsibility to help high school students develop skills for what she called “new collar” jobs at the intersection of business and technology. Think cloud and cyber careers. She concluded by saying that there’s a different paradigm that I think is going to be needed to make this an inclusive era. It is one of the things I worry about the most.

Extraordinary levels of work ethic: We live in a society where most prefer the 9 to 5 gig. Now, without promoting workplace abuse, we have to consider making our people more productive with a good work ethic, which is a belief that hard work and diligence have a moral benefit and an inherent ability, virtue or value to strengthen character and individual abilities. To borrow from JFK, we must build a work force that thinks “not only what can my company do for me, but what can I do for my company” – and how do I work hard to ensure the survival and advancement of the company? A few weeks ago, many people criticised Jack Ma, billionaire and founder of Alibaba, China’s biggest e-commerce platform, for saying that “to survive at the

Alibaba Group, you need to work 12 hours a day, six days a week”. Ma told an internal meeting that Alibaba doesn’t need people who look forward to a typical eight-hour office lifestyle, according to a post on Alibaba’s official Weibo account. Instead, he endorsed the industry’s notorious 996 work culture – that is, 09:00 to 21:00, six days a week.

To conclude, there are various avenues open, most of which are proven and successful like the South Korean Development Model, to totally reinvent the personality, presence and power of African cities to prosper more and thrive.

And we can’t delay this anymore, we’re already too far behind…

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

Time to Address South Africa’s Unemployment Crisis

Time to Address South Africa’s Unemployment Crisis

KIZITO OKECHUKWU | MAY 20, 2019

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As Statistics South Africa (Stats SA) released its report last week, I was sitting with Dr Pali Lehohla, the former Statistician General of South Africa and the question we kept asking ourselves was, ‘what has gone wrong?’ Not ‘what could go wrong?’ as the well-known Santam insurance TV commercial asks.

Stats SA revealed that our unemployment rate increased from 27.1% to 27.6%, while, in parallel, a TIME magazine piece earlier this month stated that our society is the most unequal in the world. So, to try and decipher what exactly went wrong, I compiled a few scenarios of what I think happened – and what we could do to solve this rather pressing predicament.

To set a backstory, South Africa prides itself on having some of the best policies and regulations in the world. But whether the lack of implementation of these policies inhibits job creation is something we must pay serious mind to. Yes, South Africa has a plethora of institutions (estimated at over 400) mandated or involved in creating jobs and supporting the growth of businesses, such as the Small Enterprise Finance Agency, the Small Enterprise Development Agency, the Department of Trade and Industry, the Industrial Development Corporation, the National Empowerment Fund, the Technology Innovation Agency, Provincial Local Economic Development Agencies, incubators, accelerators and various other private sector Enterprise Development initiatives and the list goes on and on. It is believed that these institutions combined, spend in excess of R100bn per annum.

Yet, the fact remains that all these great programmes, resources and initiatives have not really addressed the issue of rising youth unemployment, which is now at 55% and a ticking time-bomb. The challenges we face are systemic and hence have to be handled as such. Though I applaud the solid principles and intentions of the Government’s Youth Employment Service (YES) programme, and the impact it has made thus far, it’s just a quick fix. We must dig deeper and solve some systemic issues first if we are to have a long-term impact.

I’m obliged to keep to my weekly word-count quota, so I’ve identified four key areas which I think when addressed will help accelerate new small businesses and scale existing ones, while creating much-needed jobs in the economy. I believe that over the next five years, South Africa can reduce its unemployment figures to about 20%.

Here are my four points:

1. Lack of an open economy: Professor Michael Pence from the New York State University described that the word “openness” has two related but distinct connotations. It can mean that something is unrestricted, accessible, and possibly vulnerable; or it can mean that something, such as a person or institution, is transparent, as opposed to secretive. The first meaning is often applied to trade, investment and technology (though most definitions do not match opportunity with vulnerability), which have always driven structural economic changes, especially with respect to employment. Structural change can be simultaneously beneficial and disruptive. And policymakers have long had to strike a balance between the abstract principle of openness and concrete measures to limit the worst effects of change. Though South Africa operates an open economy in relation to trade with other countries, its internal economic policy has been somewhat closed.

A basic example is an SME that wants to start a cement factory, yet may have to go through a long process of setting up this facility, which includes going through an approval process with a Bureau of Standards (like the SABS), finding capital and a location. This is all expensive and most early stage funders shy away from backing the

initial set-up process, resulting in the industry being monopolized. Same goes with access to many of the industries.

 

At the same time, there’s also all the red tape to deal with and lack of access (capital) to key processes that can help to set up. If the economy was open, then our processes needed to ensure that if the SME was good in what he/she does and has a great business model and plan, they can be supported to access institutions like the Bureau of Standards (at an affordable/subsidized cost) and receive the needed funds to set up operations.

 

Lack of an open economy limits the involvement of young firms making it into the formal economy and contributing to the needed jobs and growth of the economy. While visiting the 22 on Sloane startup campus last year, Minister Ebrahim Patel mentioned that he was working with the competition commissioners to sign an agreement regarding unfair competitive behaviour from businesses in order to enable ways to support more small businesses to compete fairly with them. This, I believe was signed late last year. And hopefully, if we monitor this process and support more SMEs and keep the economy more open, we can see signs of mushrooming new businesses and job growth. A closed economy creates an unfair and harsh competitive landscape, severely curtailing entrance for new small businesses. Ultimately, SMEs in South Africa stand little chance because capital and access is king to break into any market.

 

2. Lack of access to strategic resources: By resources I mean skills, mentors, knowledge and finance, which remains the main issue faced by SMEs in South Africa. This is not unique to South Africa. This is a challenge faced by many SMEs globally, especially on the African continent. This may be because although the money is there, but the people (often qualified, but with no business experience to vet applicants) tasked to deploy it fail dismally, or perhaps the SME is unable to get the requisite support needed to access the capital.

 

Recently, we completed a report with the World Bank on the SME Finance Gap and the above was evidenced within it. Unfortunately, I am not at liberty to share the key findings yet till it’s published within the next few weeks, but I’m sure they will be an eye-opener for ecosystem stakeholders to understand how funds are being deployed and who gets access to it and who are the under-served group in the startup/SME space.

 

Information and data remain critical. Many of the township and rural small businesses simply do not know how and where to access the information – and even if they do, data costs are prohibitively restrictive. This is also sometimes the case for SMEs in the suburbs.

 

Mentors to nurture the fledglings. Many of our communities live in dream-crushing, isolated silos and it seems most of the knowledgeable individuals either do not have time to mentor them or simply don’t want to get involved. We need to build a mentor-driven capital model. There are many wealthy South African business people who can put on their philanthropic hats (or delegate an associate to do so) and commit to mentor one startup a year and report on the success/failure, lessons learnt and how best to drive development. Imagine if the CEO’s from the top 100 JSE-listed firms mentored just one startup each a year? These are the leaders that can create sustainable jobs. Entrepreneurs also need to network with their peers who have been through the

journey and what this means is that an ecosystem, such as conducive co-working spaces or a network needs to be created to engineer such engagements amongst peers. Obviously, these initiatives need proper design, thought-out processes and systems.

 

Innovative SMEs are largely influenced by knowledge spill-overs, access to networks and opportunities to partner with other players, including larger enterprises. Globalisation has increased the importance of cross-border collaboration in innovation – both in obtaining inputs for innovation (ideas, finance, skills, technologies) from abroad and in exploiting its outputs (products and services, patents, licenses, etc.) in foreign markets. How do we ensure that our SMEs think beyond borders? By this I simply mean, even thinking outside of one’s city/province and ensuring that various programmes run by private sectors within the Enterprise/Supplier Development (ESD) space are targeted and sustainable and that the SMEs connect with their peers outside of their provinces and find better ways to grow their businesses and, most importantly, become part of some local/global network that they can leverage for market access.

 

3. Make startups and SMEs a national priority: So much attention and cotton-wool care is given to big businesses to ensure that they keep investing in South Africa. Yet, the same level of attention is not given to SMEs, which in fact are the real new job creators. According to the Organisation for Economic Cooperation and Development (OECD) report in 2016, in the OECD area, SMEs are the predominant form of enterprise, accounting for approximately 99% of all firms. They provide the main source of employment, accounting for about 70% of jobs on average and are major contributors to value creation, generating between 50% and 60% of value added on average.

 

In emerging economies, SMEs contribute up to 45% of total employment and 33% of GDP. When taking the contribution of informal businesses into account, SMEs contribute to more than half of employment and GDP in most countries, irrespective of income levels. We recently did an analysis and picked up that the informal market in South Africa, if supported and equipped, could double its annual revenue from the R350bn that it is currently at to around R700bn. This is a recipe for an inflow of jobs into the economy. Even the formal SME market can also grow in the same proportion, if proper targeted support and nurturing is provided.

 

In addition, SME development can contribute to economic diversification and resilience. This is especially relevant for resource-rich countries that are particularly vulnerable to commodity price fluctuations. SMEs play an important role in the wider ecosystem of firms. Start-ups and young firms, which are generally small or micro firms, are the primary source of net job creation in many countries.

 

The OECD report also highlighted that stronger participation by SMEs in global markets can help to strengthen their contributions to economic development and social well-being, by creating opportunities to scale up, accelerating innovation, facilitating spill-overs of technology and managerial know-how, broadening and deepening the skill-set and enhancing productivity.

 

What’s more, greater flexibility and capacity to customise and differentiate products can give SMEs a competitive advantage in global markets relative to larger firms, as they are able to respond rapidly to changing market conditions and increasingly shorter

product life cycles. Some niche international markets are dominated by SMEs and innovative small enterprises are often key partners of larger multinationals in developing new products or serving new markets. We need to encourage and find ways to coerce more big businesses to partner with small businesses. The sustainability of big businesses critically depends on partnering with small ones to grow – or else even they face extinction.

 

At the same time, closer global integration increases competition for SMEs in local markets, in some cases with disruptive effects, demanding enhanced market knowledge and increased competitiveness for small businesses that do not operate internationally.

 

4. Clear understanding on consumption and production patterns: This has been one of the topics that Dr Pali Lehohla has been passionate about. China and the US, among a few other nations, have mastered this model. The key challenge we face is that we have not succinctly understood the patterns of what we consume, who consumes it, why and where – and the same applies to what is being produced.

 

I read a lovely piece over the weekend on Business Insider Online, written by Paige Leskin, who analysed how Google is scanning our Gmail inboxes to keep a detailed list of everything we buy and consume. However, regarding the article, a Google spokesperson said this is private and not meant for ad targeting, but I think they have mastered and clearly understood the importance of keeping our production and consumption patterns. Any country that also masters this is a winner. So we must find ways to analyse what we’re doing and also what our neighbouring countries are, in order to use this as a competitive advantage to get more SMEs into the marketplace and create more much-needed jobs in the country.

 

Other points I would have liked to cover include issues such as reforms in our education and skills system, which will incorporate instilling the entrepreneurial mind-set, government possibly creating labour-intensive jobs for the unskilled though this will be short term given the technology revolution that is upon us, equipping young people with digital skills and the impact of digital technology on our everyday lives and businesses. I hope time will allow me to share my analyses on these and others in the near future!

 

As Mr Jabu Mabuza (Chair of Telkom and Eskom) said in his opinion piece for Financial Mail last week, “the stakes couldn’t be higher. Everyone must take a hard look at themselves and see whether they are part of the solution or the problem. It is no time for bystanders”.

 

In closing, I must mention that getting this process right, will also assist the SMEs to tap into the opportunity that exists with the Africa Continental Free Trade Area Agreement (AfTCTA), which is set to be one of the world’s single largest markets accounting for US$4tn in spending and investment across all 54 African nations. The production and consumption patterns of Africans is also key to making this continental agreement a success.

Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

Call For Applications: GEN 22 On Sloane Youth Weekend Programme

CALL FOR APPLICATIONS: GEN 22 ON SLOANE YOUTH WEEKEND PROGRAMME

Empowering The Next Generation of Entrepreneurs

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GEN 22 On Sloane is looking for the next generation of Founders and game changers who are passionate about innovation, entrepreneurship and the disruption of industries using technology. 22 on Sloane is calling for young people aged 13 – 17 to apply to participate in a 6 month Youth Weekend programme.

The 22 on Sloane Youth Weekend Programme will run for a duration of 6 months and participants will attend one weekend session per month. The cost of the programme is R3000 for seven programme modules. The programme will cover the following modules, amongst others:

– Introduction to Design thinking and entrepreneurship

– Concept development and testing

– Consumer Value proposition and competitor analysis

– Disruption and future industries

– Designing a winning pitch

– Coding and Drone technology

Upon completion of the above modules, participants will have the opportunity to enter the Youth Innovative Business Competition with the aim of driving innovative thinking and the creation of youth owned businesses. Youth Innovative Business Competition participants will pitch their business ideas to a panel and stand a chance to win a cash prize and attend Global Entrepreneurship Week, hosted by 22 on Sloane in November 2019.

22 on Sloane commits to allowing complimentary participation of young people from disadvantaged communities for every one paid participant.

Contact: Ms Ovayo Jajula on (011) 463 7602
Email: ovayo@22onsloane.co

ovayo@22onsloane.co

Website : https://www.22onsloane.co/youth-weekend-programme/

Mandela Day Should Be About Building Social Capital

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

The Economics of the Animal Kingdom

The creative industry is one of the most lucrative and influential economic sectors in the world. Truth be told, It’s actually a ‘god’ economy in its own right (I use lower case for ‘god’ to denote idolism, as opposed to a Supreme Being).

read more

South Africa starts its path to glory

South Africa starts its path to glory

KIZITO OKECHUKWU | MAY 14, 2019

Caption : 16 MBA students from George Washington University US
With the elections done and dusted, all eyes will now be on the governing party to deliver on its election promises, mostly underlined by “Let’s Grow South Africa Together”.

For most people, especially the previously disadvantaged, this translates into creating much-needed jobs. Yet these can only be created by supporting small businesses and drastically reducing the sticky red tape engulfing them, improving service delivery, sustaining good governance and, most importantly, attracting investment into the country.

My article last week included a survey conducted with 3000 small businesses and ecosystem stakeholders that revealed crucial data on what start-ups want in return for their vote.

Also in the survey were voting outcomes. The participants predicted 60% for the ANC, 18% for the DA and 8.5% for the EFF. The result was not far off, seeing 57.5% for the ANC, 20.7% for the DA and 10.7% for the EFF. This means that what our small businesses and the entrepreneurship ecosystem think and say should be taken seriously and their pain points should be a top priority on the President’s to-do list.

As the continent’s economic powerhouse, South Africa has faced many challenges, many of which are quite common across the globe. These include bad governance, the rise of rightists and leftists, youth unemployment and being too inward-focused. Countries which fail to radically address these, do so at their peril

Yet challenges open the doors to opportunity, such as creating new thinking, new processes, procedures and protocols, while offering totally transparent accountability. So now is the ideal time to question more and critique more. Many African countries will still experience this transition and the youth across Africa will continue to rise and fight for their rights, holding government to public account.

I believe that South Africa is one of the best democracies in the world. Although it’s one of the most (if not the most) unequal socio-economic countries in the world, its democratic structures and processes are strong enough to rectify this, especially if the elected President takes the baton. At his speech at the IEC centre on Saturday, he assured the media to go and rest and leave the work to them, which has instilled hope and faith in many everyday South Africans.

Last week, we hosted 16 MBA students from the George Washington University at 22 on Sloane to learn, observe and engage. After interacting with them, I quickly realised just how many people of all ages across the globe still have high hopes for South Africa. These students could have chosen many other countries to visit, but they chose South Africa because they wanted to understand what makes our entrepreneurship ecosystem tick, how it connects with the rest of the continent and what opportunities exist within the ecosystem. They also reviewed ideas and the challenges faced by a few select entrepreneurs and devised solutions to address these.

As a country, we have so much to be proud of and I hope that we are a working model for the continent on how best to conduct free, fair, peaceful and inclusive elections – and always put the will of the people first!

The future is ours and only we can make it bright. I wish the new administration the very best on their path to make South Africa great again!

Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

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What Small Businesses want in return for their Vote

What Small Businesses want in return for their Vote

KIZITO OKECHUKWU | MAY 06, 2019

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For some time now, political parties have been criss-crossing the entire country campaigning to lure and convince South Africans to vote for them.

As with any election, the parties make loud, clear and passionate promises as they pack-out sports stadiums and other venues. Life will be better once they are in power, or if you keep them in power, blah, blah, blah. It’s common political rhetoric in any country. Yet, there is always some sort of a pain-point for specific voter sections, such as in the entrepreneurial space, which political parties or candidates must address.

South Africa holds its national and provincial elections on the 8th of May, and this promises to be the most contested since the dawn of democracy. Dozens of African countries are also scheduled to hold elections this year. Nigeria held theirs just a few months ago – though it was dramatically postponed by a week just a few hours before voting was set to begin. Fortunately, from what I can see, South Africa’s electoral commission is up to the task in terms of delivering free and fair elections.

Having perused the manifestos of the three major parties, the ANC, the DA and the EFF, I believe that a party that can really help create jobs (not just pay lip service) and offer small business support, should have your vote, also considering the massive amount of youth unemployment.

In November last year, we interviewed over 4000 startups, small businesses and people within the entrepreneurship ecosystem. They shared many pointers on which political parties should focus to win their votes. Here are a few key ones:

1. Support for the development of small businesses: Although they praised the ANC government for the support they have provided over the years with programmes at the Department of Trade and Industry and the introduction of the Department of Small Business Development five years ago, they believe that support still lags behind, especially when it comes to developing quality programmes and support structures. These includes financial support, such as early-stage seed grants, affordable work facilities, mentors and access to markets. Startups also stressed the amount of time it takes to secure capital from various Development Financial Institutions (DFIs) and the lack of support for township entrepreneurs.

2. Skills development: Ensure that universities focus on providing young people with the relevant future skills to meet the demand in the job market.

3. Sound policies for economic development: South Africa prides itself on having some of the best policies on the continent but implementing these remains a major problem. Our survey revealed that the entrepreneurship ecosystem hopes that the next government will focus more on implementing policies that will create jobs. For example, making it easy to obtain tourist visas to boost the tourism industry, developing competition clauses that will help small businesses to compete with big ones and impose stiff penalties for anti-competitive behaviour, as well as creating policies that force big businesses to support small businesses.

4. Land redistribution: This has been a seriously hot campaigning topic for most parties. The entrepreneurship ecosystem hopes that the land redistribution issue should be accelerated, and more young black people should be trained and equipped with the skills and capital to till the land, ensure food security, create jobs and boost the economy via export initiatives.

5. Tax incentives and Prompt Invoice Payments: The government should offer small businesses tax reduction and relief. Small Businesses also do not understand the 30day rule payment. They prefer that payment is made within 7 days of delivery.

6. People-centric: Political parties need to be more people/citizen-focused than overly party-focused. This includes being inclusive, transformative, results-driven and selecting the best leaders in all key positions, while shunning cadre deployment.

Our survey also revealed that most have great faith in President Cyril Ramaphosa and his ‘New Dawn’. This could be due to his history of business success and his passion for supporting small businesses, such as the Shanduka Black Umbrellas incubator (now called the Black Umbrellas), which he founded. Small business support was also a key topic in all his addresses along the campaign trail, so there is no doubt that this sector will be a priority in his mandate if he’s elected head of state.

From the 3000 respondents, over 60% seems to be aligned with the ANC; 18% with the DA and 8.5% with the EFF, while 13.5% are spread across various other political parties. We all know that polls do change constantly, however it seems the pecking order of the top three will remain basically as is.

Whoever wins, it is vital that small business support forms a critical part of their mandate. Of key importance is ensuring that officials (private and public sector) placed to support them understand their mandate and deliver on this.

Happy voting!

 Kizito Okechukwu is the co-Chair of the Global Entrepreneurship Network (GEN) Africa – 22 on Sloane is Africa’s largest startup campus.

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