Entrepreneurial activity for economic growth and unemployment reduction in South Africa.

Abstract

South Africa continues to grapple with the challenges of low entrepreneurial activity, low economic growth, and high unemployment, in company with poverty and inequality. While extensive research has confirmed a correlation between entrepreneurial activity and economic growth in many countries, no published empirical evidence could be found to confirm this relationship in South Africa. To fill this gap, the present study extracted data on entrepreneurial activity from the Global Entrepreneurship Monitor reports for the period 2000/01 to 2016/17 and data on economic growth and unemployment from Statistics South Africa for the same period. A statistical descriptive analysis of the data showed a positive association between entrepreneurial activity, employment, and economic growth. These results suggest that prioritising endeavors to develop entrepreneurial skills and increase entrepreneurial activity could assist in achieving South Africa’s much-needed improvement in economic growth and, consequently, also contributing to reduced unemployment, poverty and inequality.