Linkages between Entrepreneurship and Black Economic Empowerment in the South African Context

Abstract

Entrepreneurship is sometimes seen as a process of few peoples. Although some persons have innate abilities as entrepreneurs, many can also develop this capacity in their life through a learning process. According to Timmons (1999:27), entrepreneurship is a way of thinking and reasoning. At the heart of entrepreneurship are the creation and/or recognition of opportunities. What is the link between entrepreneurship and BEE? What is BEE? The term Black Economic Empowerment (BEE) started slipping into vocabulary of activists at just about the same time that black advancement was the term in vogue in the late 1970s. But it was only in the late 1980s, that it began to be used strongly as a counterpoint to the meaningless equal opportunity that had been given prominence by the corporate sector. Since the first democratic elections in South Africa, the term BEE has evolved. The BEE Commission defined BEE as a strategy aimed at substantially increasing participation at all levels in the economy. BEE is aimed at redressing the imbalances of the past by seeking to substantially and equitably transfers ownership, management and proportionate control of South Africa's financial and economic resources to the majority of its citizens. From this definition, there are key words that needs to be underlined and which explains the whole policy of BEE: BEE is a strategy aimed to redress the imbalances of the past by increasing participation in the national economy. Therefore, BEE is a mean aimed to empower previously disadvantaged persons. Many ways have been explored during the last decade with few positive results. The present paper explores the entrepreneurship as an alternative way that can be undertaken to alleviate poverty among this group of the population.The question surrounding this paper is what to focus on entrepreneurship as a remedy to improving black's lives and reduces poverty? The history of the Unites States is an example that needs further examination. More than twenty years ago MIT researcher David Birch finds that the new and growing smaller firms created 81, 5 percent of the net new jobs in America from 1969 till 1976. During 1993-1996, eight million jobs were created in US, with 77% of these by small enterprises. The conclusion that arises from Birch's findings is that job creation is driven by the birth and growth of companies. Fighting poverty among peoples through BEE can be effectively achieved through job creation. Job creation is achieved mostly by small and medium size organizations. Entrepreneurs create small and medium enterprises. Therefore, entrepreneurship as a way of thinking or reasoning help disposed people to change their social life, from poverty to wealth: a direct link between BEE and entrepreneurship. How this can be achieved? How can entrepreneurial mindset be implemented among population? This paper develops entrepreneurship as an alternative way of implementing BEE in an entrepreneurial context.