With economists forecasting a constrained economic environment for businesses globally until 2020, there was a need for an economic Convention for a Democratic South Africa (Codesa), economist Clem Sunter argued during a recent seminar in Johannesburg.

He noted that businesses had to adopt strategies such as entrepreneurship suitable for social and economic changes to survive.

“An overregulated environment for entrepreneurs and business, and tolerance of mediocrity are some of the factors threatening the business world in South Africa. These factors could be addressed through a Codesa, which will regulate and embrace economic growth in the country,” Sunter told participants at a Workforce Solutions breakfast.

Citing China, the UK and the US as examples, he pointed out how entrepreneurship had boosted their economic environment over the years, as companies were not hiring and people had to create jobs to survive.

Sunter noted that, with the unemployment rate increasing in South Africa, embracing entrepreneurship could be one of the ways through which economic freedom could be achieved.

However, he mentioned that the constrained labour laws did not encourage the practice of entrepreneurship as a form of alleviating current economic pressures.

“We do not have a supportive environment for entrepreneurship, as banks would rather grant loans to people to spend than support start-up businesses. Small businesses in the townships remain isolated, as our economic environment does not provide a supportive structure for them.”

With changing environments and rising global trends, Sunter added, entrepreneurs were establishing the world’s biggest corporations by taking advantage of the changing economic environment.

“To ensure a turnaround in economic growth, entrepreneurs realised that growth lies in creating a culture of innovation with their brands, making their brands a part of everyday life, or in creating a cheaper alternative for the market. Considering these three points has resulted in the rise of brands such as Apple by Steve Jobs, Facebook by Mark Zuckerberg and Microsoft by Bill Gates [and to those brands becoming] the most successful and flourishing businesses of this generation.”

However, Sunter stated that, with the newly elected South African Cabinet including a portfolio for small business development, led by Minister Lindiwe Zulu, South Africa should have a target of creating one-million new businesses by 2020.

Sunter believes that this will boost the South African economy and will increase entrepreneurship as one of the biggest contributors to economic growth.