Johannesburg - South African youth are increasingly becoming business savvy and gaining entrepreneurship confidence at an early age, but young women entered the business world out of desperation, according to the latest Global Entrepreneurship Monitor (GEM).
The study which covered the country's major economic hubs - the Western Cape, Gauteng, and KwaZulu-Natal - was conducted by the University if Cape Town Graduate School of Business. It showed a growing trend of young opportunity seizures as opposed to those starting business because they had no other option.
Mike Herrington, the research leader of GEM South Africa, said: "The youth makes up the majority of the population and their importance in the current and future environment can not be underestimated."
The study used the total early stage entrepreneurial activity (TEA) rates as a primary measure of youth entrepreneurship from 2004 to 2006.
The 25 to 35 age group demonstrated a highest TEA rate of all the age groups researched. It also showed more women entrepreneurs entering the market, but 37 percent of women surveyed did so because they had no other option.
The percentage of men who started business because they had nothing else to do was 28 percent. The report concluded that despite the positive business orientation, there seemed to be resistance or fear towards starting one's own business.
Various factors cited for this phenomenon were a lack of self-confidence, the complexity of starting a new business and the level of knowledge or education, which might hamper entrepreneurial activities.
Researchers said the study was not an attempt to provide an exact picture of the state of small businesses in South Africa, but about opinions regarding entrepreneurship.
"The more positive these opinions are, the more likely it is that a strong and positive culture of entrepreneurship exists in the country. By influencing these opinions through entrepreneurial interventions, one can strengthen the basis for entrepreneurship development.
"South Africa must learn from what other countries have done to promote entrepreneurship. Analysing other countries in the GEM study and how they have changed over time because of specific interventions has helped to provide more alternative solutions for South Africa," says the study.
The GEM is a multicountry study established in 1992 and co-ordinated by the London Business School and Babson College. South Africa is the only African country out of the 42 that were surveyed.