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Youth-owned business declines

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Recent research has revealed that there is a decline in locally owned youth businesses, causing concern for South Africa’s unemployment figures.

More impactful business development support that provides entrepreneurs with robust business basics is needed to increase small business success rates, while a decline in youth owned businesses has emerged as cause for concern given South Africa’s dire unemployment figures.

These are just some of the findings of South Africa’s largest entrepreneurial survey, the Real State of Entrepreneurship in South Africa 2017, announced by Donna Rachelson, Seed Engine CEO, incorporating Seed Academy and the WDB Seed Fund. Conducted by Seed Academy and now in its third consecutive year, the survey is the biggest and most widely referenced of its kind. This year’s survey, which canvassed over 1,200 entrepreneurs, expanded its scope from start-ups to all entrepreneurs at any stage of business development to gain valuable insight on the true state of entrepreneurship in South Africa. “Encouragingly, we are seeing the gap between the number of male and female entrepreneurs start to narrow as women represented 47% of entrepreneurs surveyed. This gives some indication that efforts focused on the development of women owned businesses are beginning to pay off. Similar initiatives are now urgently needed to develop youth entrepreneurs so that entrepreneurship is viewed as a ‘real’ career option,” notes Rachelson.

Expanding on the success of previous years, the 2017 survey sharpened its focus on the challenges faced by entrepreneurs in key areas such as access to funding, business support and skills development. Although some 65% of survey respondents were in possession of a post-matric qualification and a sizeable majority at 85% had at least one year’s work experience before starting a business, many entrepreneurs indicated that they require education specific to the practicalities of running a business such as marketing support and business planning. Rachelson says that while Centres for Entrepreneurship at TVET colleges are making strides in entrepreneurial education, both the public and private sectors need to look at what more can be done and how this kind of education could be incorporated into both basic and tertiary curricula.

Interestingly, 33% of entrepreneurs that have been in business for more than two and half years attribute the primary reason for their success to cultivating strong personal networks. This finding bears some correlation to the fact that 95% of businesses are funded by a combination of owner’s funds and funds from owner’s friends and family. “What we can interpret from this is that entrepreneurs place a high value on cultivating strong trust-based relationships that can help the business owner with access to markets and other opportunities including access to financing, both of which were stated as the most pressing challenges by 67% and 43% of entrepreneurs respectively.”

Rachelson adds that only 18% of entrepreneurs surveyed have attempted to secure funding from banks or development funding institutions like the IDC or DTI. “Some entrepreneurs indicated that they simply don’t know where to go for funding especially in light of the fact that most early-stage business funding requirements are below the R100k threshold. There is certainly a case to be made for funding providers to revise certain requirements to better accommodate the unique needs of small and early-stage businesses. Of course, one unfortunate implication of self-funding is that growth potential is limited to the owner’s own pocket and diminishes the ability for a small business to increase capacity, hire more staff, and make a more meaningful impact on the South African economy.”

This year’s survey has also revealed that the top sectors represented by respondents are Information Technology (IT), Business Services, Construction, and Advertising, Marketing & PR. These are however weakly aligned to the South African government’s priority sectors of Manufacturing, Construction, Utilities, and Telecoms, indicating that more aggressive efforts are needed to incentivise businesses development in these key priority sectors.

According to Rachelson one important aim of the survey is to positively influence the entrepreneurial ecosystem in South Africa by providing the basis for robust engagement for policy makers and providers of financial and non-financial support to business in South Africa. In addition, the research functions as a useful touchpoint to help educate individuals thinking about starting a business, and those already running businesses, about the current challenges and opportunities facing entrepreneurs in South Africa.

“With each survey, we learn something new that challenges us and the broader entrepreneurial ecosystem in South Africa. Armed with concrete new insights we are better equipped to make significant changes to the way we support entrepreneurs,” says Rachelson.

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When will we stop calling them phones?

If you don’t remember when phones were only used to talk to people, you may wonder why we still use this term for handsets, writes ARTHUR GOLDSTUCK, on the eve of the 10th birthday of the app.

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Do you remember when handsets were called phones because, well, we used them to phone people?

It took 120 years from the invention of the telephone to the use of phones to send text.

Between Alexander Graham Bell coining the term “telephone” in 1876 and Finland’s two main mobile operators allowing SMS messages between consumers in 1995, only science fiction writers and movie-makers imagined instant communication evolving much beyond voice. Even when BlackBerry shook the business world with email on a phone at the end of the last century, most consumers were adamant they would stick to voice.

It’s hard to imagine today that the smartphone as we know it has been with us for less than 10 years. Apple introduced the iPhone, the world’s first mass-market touchscreen phone, in June 2007, but it is arguable that it was the advent of the app store in July the following year that changed our relationship with phones forever.

That was the moment when the revolution in our hands truly began, when it became possible for a “phone” to carry any service that had previously existed on the World Wide Web.

Today, most activity carried out by most people on their mobile devices would probably follow the order of social media in first place – Facebook, Twitter, Instagram and LinkedIn all jostling for attention – and  instant messaging in close second, thanks to WhatsApp, Messenger, SnapChat and the like. Phone calls – using voice that is – probably don’t even take third place, but play fourth or fifth fiddle to mapping and navigation, driven by Google Maps and Waze, and transport, thanks to Uber, Taxify, and other support services in South Africa like MyCiti,  Admyt and Kaching.

Despite the high cost of data, free public Wi-Fi is also seeing an explosion in use of streaming video – whether Youtube, Netflix, Showmax, or GETblack – and streaming music, particularly with the arrival of Spotify to compete with Simfy Africa.

Who has time for phone calls?

The changing of the phone guard in South Africa was officially signaled last week with the announcement of Vodacom’s annual results. Voice revenue for the 2018 financial year ending 31 March had fallen by 4.6%, to make up 40.6% of Vodacom’s revenue. Total revenue had grown by 8.1%, which meant voice seriously underperformed the group, and had fallen by 4% as a share of revenue, from 2017’s 44.6%.

The reason? Data had not only outperformed the group, increasing revenue by 12.8%, but it had also risen from 39.7% to 42.8% of group revenue,

This means that data has not only outperformed voice for the first time – as had been predicted by World Wide Worx a year ago – but it has also become Vodacom’s biggest contributor to revenue.

That scenario is being played out across all mobile network operators. In the same way, instant messaging began destroying SMS revenues as far back as five years ago – to the extent that SMS barely gets a mention in annual reports.

Data overtaking voice revenues signals the demise of voice as the main service and key selling point of mobile network operators. It also points to mobile phones – let’s call them handsets – shifting their primary focus. Voice quality will remain important, but now more a subset of audio quality rather than of connectivity. Sound quality will become a major differentiator as these devices become primary platforms for movies and music.

Contact management, privacy and security will become critical features as the handset becomes the storage device for one’s entire personal life.

Integration with accessories like smartwatches and activity monitors, earphones and earbuds, virtual home assistants and virtual car assistants, will become central to the functionality of these devices. Why? Because the handsets will control everything else? Hardly.

More likely, these gadgets will become an extension of who we are, what we do and where we are. As a result, they must be context aware, and also context compatible. This means they must hand over appropriate functions to appropriate devices at the appropriate time. 

I need to communicate only using my earpiece? The handset must make it so. I have to use gesture control, and therefore some kind of sensor placed on my glasses, collar or wrist? The handset must instantly surrender its centrality.

There are numerous other scenarios and technology examples, many out of the pages of science fiction, that point to the changing role of the “phone”. The one thing that’s obvious is that it will be silly to call it a phone for much longer.

  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube
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MTN 5G test gets 520Mbps

MTN and Huawei have launched Africa’s first 5G field trial with an end-to-end Huawei 5G solution.

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The field trial demonstrated a 5G Fixed-Wireless Access (FWA) use case with Huawei’s 5G 28GHz mmWave Customer Premises Equipment (CPE) in a real-world environment in Hatfield Pretoria, South Africa. Speeds of 520Mbps downlink and 77Mbps uplink were attained throughout respectively.

“These 5G trials provide us with an opportunity to future proof our network and prepare it for the evolution of these new generation networks. We have gleaned invaluable insights about the modifications that we need to do on our core, radio and transmission network from these pilots. It is important to note that the transition to 5G is not just a flick of a switch, but it’s a roadmap that requires technical modifications and network architecture changes to ensure that we meet the standards that this technology requires. We are pleased that we are laying the groundwork that will lead to the full realisation of the boundless opportunities that are inherent in the digital world.” says Babak Fouladi, Group Chief Technology & Information Systems Officer, at MTN Group.

Giovanni Chiarelli, Chief Technology and Information Officer for MTN SA said: “Next generation services such as virtual and augmented reality, ultra-high definition video streaming, and cloud gaming require massive capacity and higher user data rates. The use of millimeter-wave spectrum bands is one of the key 5G enabling technologies to deliver the required capacity and massive data rates required for 5G’s Enhanced Mobile Broadband use cases. MTN and Huawei’s joint field trial of the first 5G mmWave Fixed-Wireless Access solution in Africa will also pave the way for a fixed-wireless access solution that is capable of replacing conventional fixed access technologies, such as fibre.”

“Huawei is continuing to invest heavily in innovative 5G technologies”, said Edward Deng, President of Wireless Network Product Line of Huawei. “5G mmWave technology can achieve unprecedented fiber-like speed for mobile broadband access. This trial has shown the capabilities of 5G technology to deliver exceptional user experience for Enhanced Mobile Broadband applications. With customer-centric innovation in mind, Huawei will continue to partner with MTN to deliver best-in-class advanced wireless solutions.”

“We are excited about the potential the technology will bring as well as the potential advancements we will see in the fields of medicine, entertainment and education. MTN has been investing heavily to further improve our network, with the recent “Best in Test” and MyBroadband best network recognition affirming this. With our focus on providing the South Africans with the best customer experience, speedy allocation of spectrum can help bring more of these technologies to our customers,” says Giovanni.

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