Cherish the real entrepreneurs

2012-10-12 00:00

THE details released by Public Protector Thuli Madonsela this week about the despicable dealings of tenderpreneur company On-Point Engineering with Julius Malema are an affront to honest entrepreneurs.

Those who claim to be smarter than everyone else have resorted to a bizarre and derogatory term “tenderpreneur” to denote those who get tenders by fraudulent means. Let it be made clear: business takes strong umbrage at this concoction. There’s virtually nothing in common between an entrepreneur and someone who steals tenders by fraudulently misrepresenting him or herself.

Real entrepreneurs are assets to society. Both liberal and Marxist environments ignore them and their role in innovation, and speak of capital and labour as the only two major elements in production. Dr G. Tacker has said that the entrepreneur is an indispensable factor of production that is independent of both labour and capital. The spirit of entrepre-neurship brings labour and capital together in productive enterprise and at the foundation of the great achievements of our civilisation lies a partnership of innovators and entrepreneurs to promote marketable innovations by attracting capital, organising labour into production and selling the products.

A spirit of entrepreneurship can develop in many contexts, but so far capitalism has been its most habitable framework. This is not to suggest that we deny the advances of the communist countries and the success of socialist leaders in raising the standard of living of their people and allocating new material wealth according to criteria of social justice. However, state–run economies of the Soviet type have failed to develop a spirit of entrepreneurship that can match those of capitalist countries. But even in capitalist societies big business owes a great deal to small business. Big business should be afraid of growing stale and bureaucratic. Big business is anxious to preserve the entrepreneurial morality inherited from personal entrepreneurship and so tends to organise itself in federations of smaller, more personal entrepreneurships.

Entrepreneurial morality is more positive than negative. It is more concerned with the obligations of the entrepreneur than with prohibitions. The role of the entrepreneur is to act.

The entrepreneurial spirit frets at the limitation imposed on human effort and strives to break through them. The entrepreneur enjoys business risks as long as there is a reasonable chance of gain. He or she is not a hypocrite and admits openly that the sweetness of life requires a certain amount of personal wealth. He competes fiercely with other firms and families, but at the same time, he honours anyone who can meet a payroll and close a profitable useful deal. The entrepreneurial spirit has no room for the vengeance of a vendetta, for no defeat of an entrepreneur is final. Entrepreneurs usually come back with amazing resilience. The nobility of the entrepreneurial outlook lies in the prominence it gives to personal sacrifice. Entrepreneurs live for a cause, an innovation, an idea that has caught their imagination and which they want to promote. Unlike the capitalist and the labourer, typical entrepreneurs are exceptionally loyal to their enterprise and will stick to it through adversity.

Around the world, governments are strangling innovation with bureaucracy, overregulation and taxation. To get new products or services into use is often as much a task for lawyers as for innovators. In many instances, entrepreneurs have to face an incredible web of regulations, some of which are contradictory and some obsolete products of bygone, unrealistic and occasionally invalid public concerns. The political system clearly needs better devices to get regulations off the books, more systematic efforts to simplify the law, and better routines to get new legislation into harmony with existing laws. It is important to recognise that the spirit of entrepreneurship and the climate of innovation are rare, if sturdy, plants in the human garden. They do not sprout spontaneously, but must be consciously cultivated to grow and survive. Politics and educators of today have tended to take them for granted.

In this country and elsewhere, entrepreneurs complain that the spirit of entrepreneurship and the climate of innovation are threatened by the spreading weeds of government regulations, the draining of resources by taxation and the growing application outside the political realm of majority rule in place of entrepreneurial judgment.

• Edgar Dhlomo is a businessman. A longer version of this article can be read at www.inyan dachamber.org

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