Bratislava,
02
June
2013
|
00:00
Africa/Algiers

Economic obstacles fail to deter unstoppable entrepreneurs

Vital for economic growth but facing serious challenges, East African small and micro businesses are displaying unwavering entrepreneurial spirit, according to new research commissioned by Regus, the world's largest provider of flexible workplaces. Even though some might have fallen into business ownership through redundancy, a staggering 92 per cent of East African entrepreneurs reported that given the chance they would do it all over again, more than the global average of 85%.

This latest Regus research, canvassing over 26,000 business managers and owners in 90 countries, confirms that nimble and flexible East African entrepreneurs regard lack of access to credit (86%) as the biggest deterrent to setting up a business today. Red tape (70%), lack of government support (57%) and market domination by large corporations (57%) followed. Over two fifths of East African entrepreneurs also cited the state of the economy as a serious hindrance.

Commenting on the findings, Regus Area Director for East Africa and Zambia, Peter Vieiria says: “Thank goodness for the Unstoppable Entrepreneur! Who knows what state the economy would be in if they decided to play safe and downsize like a lot of their larger and arguably better resourced competitors. The challenges they face are not new, but they are clearly saying that little impact has been felt from state support initiatives, despite the best efforts of government. Lawrence Lyayuka, CEO and founder for Creative City Homes, a real estate company with a Regus office in Dar es Salaam, Tanzania said “I agree, official mechanisms have not done anything much for my business. But if you want to be a successful entrepreneur, you soon find that nothing comes easily. It’s a white knuckle ride and you have to have nerves of steel. That’s why it’s usually the entrepreneurial community that generates growth out of an economic downturn, while the big boys run for cover. I just don’t understand why government doesn’t recognise this and change its focus to more evenly pay attention to SMEs. We generate around half the nation’s wealth, but we get a tiny fraction of state attention! Nevertheless, running my own business was the best decision I ever made and I’d do it over again any day.”

SMEs are “engines of growth” accounting for up to 99 per cent of businesses and 40 to 50 per cent of GDP.[1] Globally, 50 per cent of all jobs are generated by SMEs,[2] yet, in spite of this, they attract just a tiny proportion of overall investment across the G20.[3]

Vieiria adds: “Entrepreneurial firms will need to remain nimble to navigate choppy waters and succeed. The lack of institutional support means that business owners will continue to increasingly favour flexible working in order to avoid lengthy leases and free up their working capital so they can concentrate on growing their business.”

“Already globally, more than half of entrepreneurs are using flexible working locations for most of the week, compared with 39 per cent for those that do not own their businesses.”

Top challenges for entrepreneurs

Global

East African

Lack of access to credit

76%

86%

Red tape

74%

70%

Lack of government support

61%

57%

Current economic conditions

55%

44%

Market domination by large corporations

48%

57%

[1] Brown S, Harris K, Toward an Understanding of Consumer Perspectives on Experiences, Journal of Services Marketing, 24, 2012

[2] Source: Ernst & Young

[3] Source: Ernst & Young