Despite small businesses' significant contributions to the country’s economic landscape, many face insurmountable obstacles, stifling growth and threatening livelihoods.
The recent liquidation of Drip Footwear, one of SA’s beloved sneaker brands founded by Lekau Sehoana, is a sobering reminder of entrepreneurs' challenges. However, rather than lamenting this loss, we should celebrate the resilience of South African entrepreneurs and reflect on how their tenacity can shape the future of our economy.
The staggering unemployment figures released by Stats SA on August 13 show that 8.4-million people are jobless, a sharp increase from 5.2-million in 2014.
This statistic underscores the importance of small and medium-sized enterprises (SMEs), which account for 98% of SA’s business sector, providing jobs, driving local production and fostering innovation. In a country where unemployment is a significant crisis, the resilience of entrepreneurs is not just commendable, it is essential to our national survival.
Small businesses have the potential to grow into commercial giants and list on stock exchanges, becoming engines of industrialisation and local production while integrating into global value chains. However, SMEs in SA are often confronted with limited access to finance, skill shortages, and cumbersome regulations, all of which hinder their ability to scale and achieve sustainable growth.
The closure of Drip and the job losses it brings remind us that behind every failed business are families whose livelihoods are directly affected, contributing to the swelling ranks of the unemployed.
During my participation in the South African government’s roadshow in the UK, I championed the message that “SA is open for business”. But upon returning home, the news of Drip’s liquidation brought into sharp focus the deep challenges our entrepreneurs face. The opportunity to promote South African SMEs on a global stage was significant, but it must be backed by real support for the people driving our economy.
Entrepreneurship, by its nature, requires risk-taking. The fear of failure, particularly in SA, stifles entrepreneurial ambition and stops many from realising their full potential. Many entrepreneurs fear financial ruin, public humiliation, and the personal toll that comes with business failure.
While some might see Sehoana’s business downfall as a defeat, it is essential to reframe this narrative. In thriving entrepreneurial ecosystems, failure is a learning experience, a necessary step on the journey to success. SA must adopt a similar mindset if we are to unlock the full potential of our entrepreneurs.
Countries with robust entrepreneurial cultures, such as Israel and the US, embrace failure as a critical part of innovation. Entrepreneurs like Steve Jobs, Elon Musk, and Oprah Winfrey faced their setbacks before achieving monumental success.
Likewise, SA boasts its resilient entrepreneurs, such as Theo Baloyi of Bathu Footwear, Luvuyo Rani of Silulo Ulutho Technologies, and Laduma Ngxokolo of Maxhosa, who have overcome immense obstacles to thrive. Their stories of perseverance should inspire others, demonstrating that while failure is inevitable for many, it does not have to be the end.
Entrepreneurs like Sehoana deserve global recognition not only for their success but also for their resilience in the face of adversity. It is time for SA to reframe how we view entrepreneurial failures. We must not simply mourn the closure of businesses like Drip. Instead, we should focus on what can be learnt from these experiences and how we can better support entrepreneurs to bounce back.
The call by Gauteng MEC for economic development Lebogang Maile for rehabilitative interventions for Drip is commendable. But more needs to be done. Accessible financial resources, training, and mentorship programmes must become the norm, not the exception if we want to foster a thriving entrepreneurial ecosystem.
Moreover, celebrating entrepreneurial resilience should include sparing a thought for the individuals behind these businesses. Job losses are not mere statistics. They represent families who have lost their primary source of income, now joining the growing pool of the unemployed. By recognising the human cost of business closures, we can motivate a more compassionate and constructive approach to entrepreneurship support.
Ultimately, the success of SA’s economy hinges on the ability of SMEs to drive industrialisation, local production, and integration into global value chains. Entrepreneurs are not just business owners, they are architects of the nation's future.
To ensure their survival and success, a concerted effort from the government, corporations, and educational institutions is required. Policies must ease access to capital, corporations should mentor start-ups, and universities must train the next generation of innovators.
SA is at a critical juncture. More than 1,000 companies have been liquidated since the start of 2024. Yet, despite these setbacks, the entrepreneurial spirit in SA remains strong. By celebrating resilience, redefining failure, and fostering a supportive ecosystem, we can help our entrepreneurs turn their dreams into realities. In doing so, we not only protect livelihoods but also build a future where SA's economy is driven by innovation and the tenacity of its entrepreneurs.
- Dr Zwane is a Nelson Mandela scholar and managing executive: group corporate citizenship at Absa Group. He writes in his personal capacity.
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