Richard Branson Comments on Business Start-ups in South Africa
Richard Branson recently commented on a state of business start-ups in South Africa and it was evident that he not only sees huge potential in the entrepreneurial ability of South African entrepreneurs but also feels that much more still needs to be done. This article from the Business Report website
Virgin Group founder Richard Branson believes South Africa's failure to kick-start a vibrant small business culture is both a legacy of apartheid and the result of insufficient government support.
"You've got a whole generation (whose) parents were oppressed - and so entrepreneurship doesn't run in their families," Branson told Business Report in an interview on Thursday.
He was in South Africa to participate in a leadership summit and launch a range of initiatives, among them a R122 million disease control hub in partnership with the government, and a competition for five students to complete an incubator programme at the Johannesburg-based Branson School of Entrepreneurship.
An estimated 12 000 students at various tertiary institutions are expected to compete for the chance of receiving seed funding of R1.5m to develop their business plans.
Branson said that compared with a country like India, whose government was "much more supportive" of getting small businesses up and running, South Africa was dominated by big companies in almost every sector of the economy.
"In most sectors, you've got really big dominant companies. There aren't many sectors where that doesn't happen and therefore competition is needed. Virgin, in a small way, is doing that in one or two sectors," he said.
The Virgin brand in South Africa includes health and fitness chain Virgin Active, Virgin Mobile - a joint venture with Cell C - and Virgin Money, which three years ago launched a credit card marketed on the basis of a flat interest rate and fee transparency.
Branson said large companies with accompanying higher cost bases and inefficiencies provided the space for new, young companies to compete. "Small companies create many more jobs than big companies do," he added.
"Entrepreneurship is a crucial factor in creating a strong and sustainable future economy. I believe that encouraging entrepreneurship in this country… will help increase growth and jobs," he said.
Branson launched the entrepreneurship school in 2006. It is a project of the Virgin Group's non-profit foundation, Virgin Unite, in partnership with Cida City Campus.
Branson said the school aimed at providing seed funding for many entrepreneurs, and it was possible that much bigger investments would be forthcoming over time. "We're debating a whole new concept to get quite large sums of money."
Branson's own 25-year-old business empire, which employs 60 000 people in 30 countries, was launched with $300 that his mother gave him after she found a bracelet on the side of the road that nobody claimed.
"That enabled me to get my business going," he said.
Asked what small business he would consider starting in South Africa, Branson said: "Funny, a lot of students ask me that question… The problem is I suspect I'd have already done it if I thought there was a gap in the market."
Nevertheless, he saw "enormous opportunity" arising from global warming and the spike in fuel prices.
"If you can go into people's offices and go into homes, and say 'I can save on your electricity bill, give me 10 percent'. Find out how to cut down on carbon output. I would get knowledgeable about how to set about doing it. That's just one idea."
He advised entrepreneurs to go only into a business in which they had an interest. "You must see a gap in the market, and you must make a real difference to other people's lives," he said.
Article by INGI SALGADO