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We publish quarterly thought leadership essays as a means to sharing strategic visions, inspire, reflect aspiration and ambition, build our brand equity, enhance stakeholder relationships and create new opportunities for partnerships.
Founder Tebogo Khaas kicks off a series of thought leadership essays with an in-depth analysis, insights, and critique of the prevailing ethical and governance landscape for small businesses. He makes a case why good, ethical governance is not an exclusive province of c-suites and boards of large established corporations. He articulates how an ethics-centric, clearly defined and implemented small enterprise governance framework underpinned by a cogent national economic development strategy can be the cornerstone and model for sustainable small enterprise development.
Ethics and Entrepreneurship
The race to remake the ESD ecosystem and professionalise entrepreneurship
By GT Khaas, Global Chief Entrepreneur, IoCE
Numerous studies have shown that most startups fail within a few short years of their founding. Problems faced by small businesses that often contribute to their demise include dependency on a single client, poor market access, lack of capacity to deliver consistently, public policy inertia, competitiveness, and poor governance.
The challenges faced by small and medium-sized enterprises (SMEs) are complex and multifaceted. In addition to the factors mentioned above, SMEs often lack access to resources, such as capital and talent, and struggle to keep up with rapidly changing market conditions. This is where the importance of a strong ecosystem for entrepreneurship comes into play. A well-functioning ecosystem can help SMEs overcome these challenges and achieve success.
The term "ecosystem" refers to the network of actors that support entrepreneurship, including entrepreneurs, investors, mentors, and policymakers. A robust ecosystem can provide entrepreneurs with access to the resources they need to start and grow their businesses, such as funding, talent, and expertise. It can also create an environment that encourages innovation and collaboration, enabling entrepreneurs to develop new ideas and solutions to complex problems.
One of the key components of a successful ecosystem is the professionalization of entrepreneurship. This means providing entrepreneurs with the skills and knowledge they need to run their businesses effectively. Professionalization can include training in areas such as financial management, marketing, and leadership, as well as access to mentorship and coaching.
Another important factor is the establishment of institutions that can support SMEs in a variety of ways. For example, a dedicated SME agency or institute can provide entrepreneurs with access to funding, business development services, and other resources. It can also advocate for policies that support SME growth and help to address the challenges faced by SMEs.
In addition to these institutional supports, there is also a need to promote a culture of ethical entrepreneurship. This means celebrating and supporting entrepreneurs, creating a supportive environment for risk-taking, and fostering a sense of community among entrepreneurs.
In recent years, there has been a growing emphasis on ethical behaviour in the business world, and this trend is increasingly being reflected in South Africa as well. Many small businesses in South Africa have begun to recognize the importance of ethical behaviour and are making efforts to implement ethical practices within their operations.
Possible enablers for ethical entrepreneurship in South Africa may include the following:
1. Government regulations and support: The government can play a role in promoting ethical entrepreneurship by implementing laws and regulations that promote ethical behaviour, and by providing support and resources to small businesses that prioritize ethical practices.
2. Business associations and networks: Joining business associations and networks can provide small business owners with opportunities to learn about ethical business practices and connect with other entrepreneurs who share their values.
3. Consumer demand for ethical products and services: Consumers are increasingly seeking out products and services that are produced ethically, and this demand can provide an incentive for small businesses to adopt ethical practices.
4. Education and training: Providing education and training on ethical business practices can help small business owners understand the importance of ethical behaviour and provide them with the tools they need to implement ethical practices within their operations.
5. Ethical leadership: Small business owners who prioritise ethical behaviour and lead by example can set a positive tone for their organisation and encourage their employees to embrace ethical behaviour as well.
There is growing recognition of the importance of ethical behaviour in the business world, and small businesses in South Africa are no exception. By embracing ethical practices, small businesses can build trust with their customers, differentiate themselves in the marketplace, and contribute to the long-term sustainability of their operations.
Overall, the race to remake the ESD ecosystem and professionalize entrepreneurship is critical to the success of SMEs. By providing entrepreneurs with the support, resources, and skills they need to succeed, we can help to create a vibrant and sustainable ecosystem for entrepreneurship that benefits individuals, communities, and the economy as a whole.