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Loyiso M. Mbabane

This paper attempts a conceptual framework for innovative entrepreneurship (‘innovapreneurship’). Nowadays, the term entrepreneurship is used very broadly, so much so that its essence may become lost. Even people who get business from the state have jokingly been referred to as ‘tenderpreneurs’. However the original construct of an entrepreneur from the Schumpeterian perspective was that of a very serious player in the development of any economy. The entrepreneur was the ‘undertaker” who ‘under-took’ new ventures or sought new and better ways of doing things. Driven by the ‘undertaker’s spirit’ or the unternehmergeist, s/he embarked on a path of ‘creative destruction’ which not only added value to the economic output but would ultimately lead to radically new ways of doing business. At the national and supra-national levels, such creative destruction would even lead to new forms of social and economic relations. There has been a lot of focus on the small & medium enterprise space in South Africa and globally. It is the space where it is relatively easy for a person or a partnership to enter into business and/ or into economic value-creation. Yet the statistics consistently point to huge failure rates in new business start-ups and to mediocre performance by the already established SMEs. Key to this, it is submitted, is the dearth in real entrepreneurship. Statistics show that there is an increasing number of people who are ‘self-employed’, largely due to the country’s very high and rising unemployment rate. Most of these are ‘survivalist’ owner-managers, who would take up any other better opportunity if it came up. It is for this reason that efforts should be made to rediscover true entrepreneurship. Interventions by funding agencies and “SME development” agencies, including training institutions, should be reviewed to incorporate aspects of true entrepreneurship. The training and mentorship programmes of SME owner-managers should now focus on stimulating their innovativeness. Innovative entrepreneurship models and case studies should be showcased more and more. Even the individuals involved in undertaking such ventures ought to be infused with the unternehmergeist. This paper reviews the current state of entrepreneurship in South Africa, focussing on the SME sector. It argues for an innovative approach to SME development. This new approach, it is submitted, should be undergirded by the broad-based National Systems of Innovation Framework (Broad-based NSI). The rationale for the SME focus is discussed first, to justify the need to prioritize innovative entrepreneurship at that level (as opposed to the large industry and large organisational level). That rationale is then followed by an overview of the definitions of “Small businesses” in South Africa. The broad and not-so-useful definition of Small and Medium Sized enterprises is problematized as not being very helpful in the development of true entrepreneurship, an entrepreneurship that is predominantly innovative. The prevailing conceptual frameworks for SMEs are then reviewed. The National Systems of Innovation (NSI) approach is then discussed, focusing on the political economy-wide perspective of NSI. It is argued that there should be a radical shift in the approach to SME development. The approach should focus on two primary elements, one is the entrepreneur, who ought to be “innovationized” and the second is the overall system or paradigm of Innovation Systems, which ought to inform all SME development policies and programmes in the country. With this new approach and paradigm, the quantity of SMEs will drop drastically, but the quality of new ones and the remaining will improve exponentially, as will output and aggregate welfare.
Key words: Broad-Based National System of Innovation; Development as ‘Hanging-in; Stepping Up and Stepping Out’; Entrepreneurship; Global Entrepreneurship Monitor (GEM); Innovation; Small, Medium Enterprise (SME); National System of Innovation (NSI); System of Innovation (SI); Unternehmergeist (Undertaker’s spirit).

JEL: D78; D91; J24; L53; L25; L26; M13; O3; 038

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