WeeklySA_AdminFRAGMENTED: South Africa’s entrepreneurs have the drive to build successful businesses, but a weak support ecosystem, excessive red tape and fragmented government assistance are preventing many from turning ideas into sustainable enterprises, according to a new global study…
By WSAM Reporter
South Africa’s entrepreneurial potential continues to be undermined by one of the world’s weakest business support ecosystems, with a new global report ranking the country seventh from the bottom among 56 economies assessed.
The 2026 Global Entrepreneurship Monitor (GEM) National Expert Special Report, released on Wednesday, awarded South Africa a National Entrepreneurship Context Index (NECI) score of 3.9 out of 10, well below the global average of 4.7 and behind emerging economies such as India, Indonesia, China and Brazil.
The report warns that while South Africans display resilience, innovation and a willingness to take entrepreneurial risks, weak implementation of government policies, bureaucratic hurdles and fragmented support systems continue to stifle business growth.
“South Africa has no shortage of entrepreneurs,” said Angus Bowmaker-Falconer, research fellow at Stellenbosch Business School and co-author of the report.
“What is needed now is not new policies or additional funding, but the political will and institutional discipline to translate the policies and financial resources we already have into action.”
Entrepreneurship is a primary mechanism through which South Africa can absorb unemployment, address structural inequality and generate the growth that policy alone cannot create. — Angus Bowmaker-Falconer
The study was produced through a partnership between Stellenbosch Business School, the University of Johannesburg, North-West University and the Small Enterprise Development and Finance Agency (SEDFA). It draws on the views of more than 60 industry leaders, investors, economists, educators and entrepreneurship specialists.
The report measures the overall quality of the country’s entrepreneurial environment, including access to finance, government support, market access, infrastructure, education, regulation and cultural attitudes towards entrepreneurship.
While South Africa’s financial sector, universities, research capacity and growing network of business incubators were identified as strengths, experts found that entrepreneurs often struggle to navigate government programmes because support remains fragmented, difficult to access and poorly coordinated.
Acting SARChI Chair in Entrepreneurship Education at the University of Johannesburg, Professor Natanya Meyer, said many entrepreneurs simply do not know what assistance is available.
“The entrepreneurs who succeed are not those who avoid the bureaucracy, but those who master it,” she said.
The report recommends creating a single digital platform where entrepreneurs can access information on funding opportunities, eligibility requirements, application procedures and decision timelines across government support programmes.
It also calls for targeted awareness campaigns, particularly aimed at young entrepreneurs, and greater use of digital technologies to improve access to government services.
The findings come at a critical time for South Africa’s economy. According to the report, micro, small and medium enterprises contribute around 40% of gross domestic product and account for approximately 60% of employment, yet many fail within their first five years.
Against a backdrop of unemployment standing at 32.7% and economic growth averaging below one percent over the past decade, the report argues that entrepreneurship must become central to the country’s economic recovery.
“Entrepreneurship is a primary mechanism through which South Africa can absorb unemployment, address structural inequality and generate the growth that policy alone cannot create,” Bowmaker-Falconer said.
The report proposes a three-phase reform programme. Immediate priorities over the next 18 months include reducing regulatory complexity, streamlining government support programmes and expanding affordable access to digital business tools, particularly for township and peri-urban entrepreneurs.
Over the next five years, it recommends integrating entrepreneurship into school curricula, expanding broadband infrastructure and strengthening competition in highly concentrated sectors of the economy to create opportunities for new businesses.
Longer-term reforms focus on changing cultural attitudes towards entrepreneurship by encouraging innovation, reducing the stigma associated with business failure and promoting successful entrepreneurs as role models.
Professor Meyer cautioned that a one-size-fits-all approach would not work in a country as diverse as South Africa. “An ecosystem designed around the assumptions of a formally registered, urban, tech-enabled entrepreneur leaves the majority of South Africans under-served,” she said.
The report concludes that South Africa already possesses many of the building blocks needed to foster a thriving entrepreneurial economy. What is lacking, it says, is better coordination, simpler systems and stronger implementation of existing policies.
