Black Female-Owned Enterprises on the Rise!

Opportunity knocks for black female-owned entrepreneurs

There are encouraging signs for entrepreneurship in South Africa. While the percentage of adults involved in entrepreneurial activities is still low compared to the rest of Africa, necessity is no longer the primary reason why South Africans go into business for themselves. The pursuit of opportunity – known as opportunity motivation – is the main motivating factor for male and female entrepreneurs alike, according to the most recent Global Entrepreneurial Monitor (GEM) report on South Africa.

The trend is particularly marked among women entrepreneurs in the country. In 2001, almost 45% of women in early-stage enterprises were motivated by necessity, says the GEM report. This decreased steadily over the next 15 years and by 2016, had dropped to just over 27%.

In other words, almost 72% of women entrepreneurs in early-stage companies in 2016 were motivated by opportunity and not a necessity. This is a positive trend as opportunity-driven entrepreneurs tends to choose entrepreneurship rather than be pushed into it for lack of alternatives.

The GEM report also notes a strong increase in opportunity-motivation rates among black Africans, rising from just under 30% in 2005 to an impressive 55.4% in 2016, the highest rate of all population groups. What’s more, black Africans now make up three-quarters of the entrepreneurial population in South Africa.

Gender gap narrows

The report does not say where black African females, specifically, stand in this scenario, nor for that matter, where white females stand. This is a pity given that small black women-owned enterprises are widely known to be the least represented segment of the entrepreneurial community in South Africa.

What we do know is that the historical gender gap between the percentage of women entrepreneurs compared to male entrepreneurs is no longer as wide as it used to be. More than seven women were engaged in early-stage entrepreneurship for every 10 male entrepreneurs in 2016, according to GEM, which describes this ratio as a “healthy level of gender parity in terms of entrepreneurial involvement”.

Bearing this out are the results of the Real State of Entrepreneurship in South Africa survey 2017, conducted by the Seed Academy among 1 200 entrepreneurs.

“Encouragingly, we are seeing the gap between the number of male and female entrepreneurs start to narrow as women represented 47% of entrepreneurs surveyed,” said Donna Rachelson, CEO of Seed Engine, which incorporates Seed Academy.  “This gives some indication that efforts focused on the development of women-owned businesses are beginning to pay off.”

This is a reference to South African government initiatives to prioritize the advancement of women-owned and youth-owned enterprises through policies, preferential funding schemes and targeted support.

Wanted: strong female role models

While access to funding and markets are perennial requirements for entrepreneurs of all backgrounds, a support mechanism that should not be underestimated is the motivating power of good role models. As Donna Rachelson of Seed Engine says: “I engage with many female entrepreneurs. It is clear that strong role models are especially powerful. I would, therefore, encourage successful women to mentor and support other women where they can. Successful women entrepreneurs are both an example of what is possible and a source of funding for others.

A powerful platform for showcasing the success of women entrepreneurs in general and black women entrepreneurs, in particular, is the tt100 Business Innovation Awards Programme, now in its 27th year and held annually to recognize excellence in the management of technology, innovation, people, and systems.

The tt100 programme is open to companies of all sizes, including emerging enterprises, and has the long-standing support of the Department of Science and Technology, as well as major private sector companies known for their innovativeness.


“For 2018, we have embarked on a major drive to encourage the participation of black female-owned entrepreneurs, who up to now have been underrepresented in tt100 – just as they have been in the broader economy,” says Sonya Landman, tt100 coordinator. “The time has come for this to change and for black women-owned enterprises to show what they are capable of achieving, and in the process to inspire other women entrepreneurs.”

Entries for the 2018 tt100 programme are already open and will close at the end of August 2018.

www.tt100.co.za l Sonya@davinci.ac.za