If there is one thing all South African business school heads have grappled with at one time or another, it’s how to inculcate an entrepreneurial culture or mindset into their MBA programmes.
Globally, most MBA programmes focus on preparing students for the traditional job market. After all, many MBA students are funded by their employers, large corporates that are not paying for their most promising talent to rush off and start their own ventures.
And yet, the South African economy isn’t going to rebound unless it can stimulate the rapid growth of existing businesses as well as the creation of new ones. Entrepreneurial skills have never been more critical.
However, early-stage entrepreneurial activity in South Africa has declined below pre-pandemic levels, with fewer people than ever considering starting a new business, according to the 2023 Global Entrepreneurship Monitor.
To a large extent this is an outcome of South Africa’s poorly performing economy, says North-West University (NWU) Business School economics professor Raymond Parsons, including the impact of load-shedding and the ever-increasing regulatory burden on business.
“These have undoubtedly combined to hamper and create unnecessary risks, in particular for business start-ups,” he says.
But there’s more to it than that. All the business schools canvassed by the FM lamented South Africa’s lack of entrepreneurial culture and believe that part of the solution is to intervene as early as possible — at school level.
“There’s a lot more that can be done to deepen the entrepreneurial spirit of young people in the country, one of which is to deliberately make entrepreneurship a key component of our school curricula,” says Udo Osuigwe, who leads the MBA entrepreneurship focus area at the University of Pretoria’s Gordon Institute of Business Science (Gibs).
“In that way, we can dispel major prejudices that people have about entrepreneurship.”
A primary one is the myth that entrepreneurs are born, not made.
“A lot of people are hesitant about entrepreneurship education as a result of this prejudice,” says Osuigwe. “We have to nip it in the bud by entrenching entrepreneurship from the early schooling system.”
His colleague Hayley Pearson, executive director of academic education at Gibs, agrees: “We broadly know that entrepreneurial propensity in Africa is low — people would prefer the security of a pay cheque, and entrepreneurial activity is seen by many as a survival mechanism rather than a desirable option.”
One way to deepen South Africa’s entrepreneurial culture, says Henley Business School Africa dean and director Jon Foster-Pedley, is by nurturing a different form of excellence in the classroom.
He believes that, just as some schools identify and nurture sporting talent early on, we should be recognising and encouraging those budding entrepreneurs who can think out of the box, find solutions and monetise them.
They may not be “A” or even “B” academic candidates, says Foster-Pedley, but “the simple truth is that accountants and attorneys, valuable as they are, don’t kick-start the economy — and at this stage, our economy is deindustrialising. We must turn it around, not manage the little that is left.”
To do this, South Africa is going to need more entrepreneurs.
Gibs has always believed in early intervention to create change. For instance, through its Entrepreneurship Development Academy, it has been running the Spirit of Youth leadership and entrepreneurship programme aimed at grade 11 pupils since the late 2000s.
Over five months, young delegates must develop a viable community project in line with the UN sustainable development goals. The winning teams get funding to start their projects. The same school-based incubation model is being adapted and will be replicated in schools in Kenya and Ghana.
The conventional approach to teaching entrepreneurship at business school is to have an add-on module on entrepreneurship, perhaps with a few guest speakers, a couple of site visits, in-person or online classes, and an assignment. However, Foster-Pedley doesn’t believe this is very effective.
As someone who used to lead an entrepreneurship incubator in New Zealand, he came to realise that well-structured experiential learning for entrepreneurs that builds practical skills and psychological resilience is more effective than most formal theories offered in entrepreneurship programmes.
His favourite definition of entrepreneurship is “the capacity to create a successful business without the necessary resources that make that possible”.
What South African business schools need to do, he says, is to create “great flight simulators” for entrepreneurship so that many of the learning mistakes can be made under pressure but without fatal consequences.
So, while classroom learning is helpful, Foster-Pedley feels “there is no substitute for experiential and immersive learning under pressure, not just to understand how hard it is to run a business, but also to build the resilience and resourcefulness to make up for the lack of resources”.
Most students don’t want to become experts in entrepreneurial theory; they want to become expert entrepreneurs
In short, his view is that if you want to learn to be an entrepreneur through a business school, look for an entrepreneurial business school that is progressive and doesn’t fall under conventional definitions.
“After all,” says Foster-Pedley, “most students don’t want to become experts in entrepreneurial theory; they want to become expert entrepreneurs.”
This is, of course, far easier said than done.
Part of the challenge for MBA programmes is that South African school and university education focuses more on managerial and predictive logic than entrepreneurial or creative logic, says NWU Business School entrepreneurship lecturer Stéphan van der Merwe.
“Students, therefore, cannot come up with creative and innovative solutions to their problems. Furthermore, many students lack basic ... mathematical or reading skills.”
Another challenge, he finds, is that prospective entrepreneurs often overestimate the benefits but underestimate the hard work required to create a successful, sustainable business.
“[Some] young prospective entrepreneurs believe it is a get-rich-quick situation and are unwilling to work long hours to succeed,” he says.
Lerato Mahlasela, the director of Gibs’s social education division, says Gibs doesn’t teach entrepreneurship just in the classroom but also in real-world contexts, including townships and rural areas.
“Through [various] programmes we work closely with local entrepreneurs and facilitators to ensure the content is relevant and practical,” says Mahlasela. “This localised approach enables us to address the unique challenges faced by entrepreneurs in these areas, including limited access to resources and markets.”
The impact of these programmes is seen not only in business growth but in fostering a spirit of collaboration and community resilience.
The school’s recent “Township Entrepreneurial Ecosystem” report finds that because of the tough township business environment and the absence of formal players, entrepreneurs create their own informal or “shadow” networks to support their business activities. These are highly efficient despite going unobserved in the formal economy.
Osuigwe adds that Gibs aims to enable students to focus on solving social challenges — either through starting their own businesses or through their entrepreneurial activities within their corporate setting.
The overarching goal is “to create an entrepreneurial ecosystem that empowers individuals, regardless of their location, with the skills and confidence to drive change and affect their communities”.
In this sense, entrepreneurship is not just about starting a business but more about impact and fostering sustainable economic development — in other words, entrepreneurial behaviour that seeks to address pervasive social challenges.
“The value of entrepreneurship to society is such that entrepreneurship as a way of being should be a core outcome of South African MBAs, irrespective of whether entrepreneurship is a defined focus in an MBA or not,” says Osuigwe.
Tasneem Motala, head of the MBA programme at Stellenbosch Business School, says fostering entrepreneurship is not a core focus of its MBA. Rather, the primary objective is to develop responsible leaders, whether they choose to start their own ventures or not.
However, she feels the mindset required to be an entrepreneur and a responsible leader is very similar in that it involves nurturing an appetite for risk-taking, breaking down internal barriers to innovation and being comfortable operating in uncertain environments.
In fact, she says, the responsible leadership journey undertaken as part of the MBA requires such deep introspection that many students from corporate backgrounds come to realise that their purpose is more aligned with starting a venture in a different field. These students often make the career change to entrepreneurship after completing their studies.
Henley encourages its MBA students to share their entrepreneurial and management skills and abilities during their studies with nonprofit organisations (NPOs) that can benefit from the assistance. It uses its MBAid social outreach programme as a vehicle to do so.
Over the past 15 years, hundreds of Henley MBA students and staff have worked with more than 300 organisations and provided 75,000 hours of free business support to SMEs and NPOs through the MBAid programme.
“It’s a win-win situation,” says Foster-Pedley. “The organisations receive immense value, and our students accelerate their learning through fast-track immersions into building small businesses in real life, not in the classroom.”
He says he hears over and over again from graduates that it is the ability to practise what they are learning, as they are learning it, that makes all the difference. “It is in this process of learning and applying, failing and trying again that people can start to build their resilience and wisdom,” he says.
“This is where the rubber hits the road. Rather than just seeking to motivate people or give them the high-level theory, we need to give them the ability to try this out as they deal with the challenges they encounter every day at work.”
Mikael Samuelsson, who teaches entrepreneurship at the University of Cape Town’s Graduate School of Business (GSB), says the school faces a unique challenge in that its MBA graduates are highly sought after in the job market. This offers them secure career paths with minimal personal risk — the complete opposite of starting a business, which involves considerable risk and uncertainty.
“Globally, most MBA programmes and higher education in general focus on preparing students for traditional job markets,” he says. “Our approach is different. We equip students to excel both within established organisations and in independent start-ups.”
The GSB uses a research-based approach that combines cutting-edge knowledge with an effective pedagogical model. In practice, this means it teaches students specific skills to build both expertise and the ability to launch efficient, sustainable ventures.
In short, the GSB MBA teaches students a staged approach to entrepreneurship and innovation, helping them minimise risks while pursuing their entrepreneurial ambitions.
But even if South African business schools get this 100% right and turn out thousands of competent and resilient entrepreneurs, international research shows that there is another element that must be taken into consideration: the importance of mentorship.
A landmark US study by the MIT Sloan School of Management across 2.7-million company founders between 2007 and 2014 found that a 50-year-old business owner was almost twice as likely to succeed as a 30-year-old, while those in their 20s had the lowest likelihood of success.
So, ideally, younger entrepreneurs should be apprenticed to experienced, older entrepreneurs so they can learn valuable skills before starting their own ventures.
One way to do this is through initiatives such as the Professional Fellows Programme, which is facilitated by Gibs and sponsored by the US state department. It allows South African entrepreneurs to visit Michigan State University for a few months where they are paired with mentors in similar fields. Next month, Gibs will host the US mentors to see the projects their mentees have implemented in their local communities.
On a more fundamental level, the remedy lies in plain sight.
For the first time in 30 years, South Africa has new leadership in the form of the government of national unity (GNU). Its primary goal is to kick-start inclusive, jobs-rich growth. There is widespread acknowledgment that to do this, it will need to create a more enabling environment in which all businesses can flourish, but especially SMEs.
If it can achieve this, the GNU will have given entrepreneurs a fighting chance. Growth and jobs will surely follow.
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