Digital technology has the ability to turn necessity entrepreneurs into opportunity entrepreneurs
Necessity entrepreneurs are individuals who work for themselves because they do not have another means of generating an income. This class of entrepreneurship is prevalent in economies such as South Africa’s township economy where there is a high level of unemployment and people are forced to start small businesses to provide for themselves and their families.
Opportunity entrepreneurs are those people who start a business because they spot an opportunity, one that meets market needs, and choose to pursue it. Opportunity entrepreneurs are far more likely to grow their businesses, create job opportunities for others and contribute to the economy.
In South Africa it is reported that opportunity entrepreneurship is on the decline. The Global Entrepreneurship Monitor (GEM) 2017/2018 report finds that significantly fewer South Africans believe that they have either the opportunity or the capability to start their own business. This year’s study found that only 39.9 percent of South Africans believe that they have the required skills and knowledge to become entrepreneurs – up by only two percent from last year.
Digital technology is a valuable tool in stimulating opportunity entrepreneurship in townships
The Cape Digital Foundation believes that providing easy access and stimulating the uptake of digital technology plays an important role in changing the mind-set of necessity entrepreneurs – giving rise to the realisation that they could run a business that has the potential to grow. In the main, necessity entrepreneurs in our townships cannot afford to get connected and do not have the know-how to harness technology to grow their businesses – and many unemployed township citizens are not aware of the benefits of using technology to become smart citizens and entrepreneurs.
Bridging the digital divide for necessity entrepreneurs
Baratang Miya, who founded GirlHype Coders in 2003 with the aim of teaching girls how to code, is passionate about empowering young South Africans. She firmly believes in the power of smart citizens who have been digitally enabled to use technology to change their career prospects and grow their capacity to run their own profitable businesses.
Prior to 2003, working as a development manager, many of the necessity entrepreneurs Baratang met were women who had run a micro business in the townships for a number of years, but who were not computer literate. She started teaching a group of women computer skills, dispelling their fear of the unknown and turning them on to the fact that their smart phones were a computer in their hands. She found that there were two distinct stages in the outcome of this computer training. In the first instance the group were taught a new set of skills, after which they were enabled to use what they had learned to improve their quality of life. Her students started by learning basic computer skills and were excited to use the Internet as a communication tool – to be able send an email. But, the catalyst for change was being taught to use social media. It made all the difference as an enabler in these women’s lives and businesses – it opened up the world to them. “As a great example,” says Baratang, “since I taught a business owner who cooks and sells ‘shisa nyama’ by the roadside computer and social media skills, her Facebook page is such a hit with the community that it has grown her personal profile and her business tremendously. Giving women this sort of confidence has a knock-on effect – they go on to share their knowledge with other women and enable their children.”
In 2015, the CoLab for e-Inclusion and Social Innovation at University of the Western Cape (UWC), led by Dr. Leona Craffert, developed a digital skills training programme “Mobile Technology in Support of SME Business”, aimed at enabling entrepreneurs that operate from a disadvantaged standpoint to develop a business owner mind-set, and learn how mobile technology can be used to support and grow their businesses. Since 2016, over 200 SMEs from across the Western Cape have attended this course and, through a combination of face-to-face training, peer learning and on-line education, have been educated in the facets of running a business and where mobile technology can be leveraged to grow their businesses.
Digital technology lowers the barrier to entry for micro enterprise
Training outcomes of this nature serve to give insight as to how digital technology is an enabler in lowering the barriers to entry for individuals who want to start their own business – and facilitates business growth. They illustrate a starting point in moving the needle for people from being necessity entrepreneurs to having choices as opportunity entrepreneurs.
The Foundation believes that the uptake of digital technology opens up greater possibilities for innovation. The key is to give everybody the ability to connect followed by teaching digital know-how and enabling collaboration. There is also a need to stimulate a more entrepreneurial and business owner mind-set – and to accelerate the smarter use of ‘digital’ technology to grow smart citizens in smart townships in South Africa.