By Edwin Naidu
With small businesses struggling in South Africa, the Technological Higher Education Network South Africa (THENSA) offers hope that could change the narrative.
THENSA has embarked on an ambitious project with the Cape Peninsula University of Technology (CPUT) and several other Universities in South Africa and Namibia.
This higher education consortium has been awarded a grant to establish a Southern African Entrepreneurship Venture Builder (EVB). The EVB will initially be hosted by the Centre for Business Innovation and Incubation. Through its bespoke mentor-in-residence programme, it aims to identify and address the barriers to entrepreneurship development. The project went live last week.
Its founders have called for a broader, urgent conversation on why South Africa faces such low start-up success rates. THENSA Project Manager Dr Sershen Naidoo stressed that the establishment of the EVB must be seen as an opportunity for South Africans to start asking themselves some tough questions — why is South Africa lagging both global and African levels of entrepreneurial activity and how effective is our support for entrepreneurial ecosystem development?
According to the 2023/2024 Global Entrepreneurship Monitor (GEM) South Africa Report, South Africa’s overall entrepreneurial environment is declining. In 2023, it was the third lowest of the 49 GEM participating economies.
To change the narrative, Naidoo said the EVB was launched by THENSA and its partners to birth and sustain a regional entrepreneurship ecosystem that will accelerate the journey of promising startups from Minimum Viable Products to market-ready successes.
Naidoo believes the government should examine the regulations that make opening a business such a minefield.
“These regulations require compliance adherence that only keeps lawyers and tax consultants happy. The government should also be concerned about the many small businesses that fail. This hinders the economy and affects job creation.”
According to recent data from Statistics South Africa, over 1300 businesses in South Africa were liquidated in 2024, highlighting a significant increase in small business failures. October 2024 saw a particularly sharp rise in liquidations compared to the previous year. This data indicates a concerning trend for small businesses in the country.
What makes it unique is that the programme will have a:
- Bespoke Mentor-in-Residence Programme – Nurturing entrepreneurs through hands-on mentorship from university and industry experts.
- Focus on Historically Marginalised Sectors – With a commitment to empowering those traditionally excluded from entrepreneurial opportunities.
- Scalable Impact – Initially hosted by CPUT’s Business Innovation and Incubation Centre, it later expanded to a decentralised model, amplifying its reach across multiple universities and geographies.
Naidoo said the EVB would target investors and innovators, ensuring that they have early access to high-potential startups. They would be the first to identify and invest in the next generation of unicorns and help shape the future of Southern African entrepreneurship.
He said that the EVB would ensure investor attractiveness, confidence and return on investment by putting the entrepreneurs through a rigorous mentor-in-residence programme.
Such an approach becomes critical when compared to the Stats SA 2024 data, which shows that more than 1300 businesses had been liquidated in South Africa, with October 2024 recording a significant rise (44.1%) in liquidations compared to October 2023.
This data indicates a trend of increasing small business failures in South Africa throughout 2024, possibly due to a combination of factors, including:
- Difficulty in securing loans or capital to operate
- Pressure from established businesses in the market
- Elevated expenses related to running a business
- Difficulty in reaching a wide customer base
- Challenges in finding qualified employees
- Complex legal and administrative requirements
“Through this initiative, we hope to identify the reasons why entrepreneurs are failing and seek innovative solutions to shift the dial on entrepreneurship,” concluded Naidoo.
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