Investigating the effect of entrepreneurship in economic development in Ngwathe municipal region / M.P. Ndlebe

Ngwathe Municipal cluster, is a rural area in the Northern Free State. The region comprises of five towns: Edenville, Heilbron, Koppies, Parys and Vredefort. The region has an unemployment rate of 47% and very low business activity. This paper attempts to investigate the effect of entrepreneurship towards economic development and growth in the Ngwathe region. A number of obstacles towards entrepreneurial development were discovered during the study. The numbers of businesses that create employment and add value are too little. The rate of startups is very low. The low level of business activity is also reflected on the high unemployment rates in the region. The infrastructure is not conducive towards business development. Failure to supply proper infrastructure has a direct influence on business and the rate of start-ups and new companies forming. According to the literature review, poor infrastructure is a serious impediment to a successful local economic development strategy. Smart towns position themselves well by developing their infrastructure. There is a low level of usage of computers and internet services by entrepreneurs in the region. Technological infrastructure, like internet cafes, computer software and hardware companies and Information Technology (IT) consultants are lacking in the region. The region does not have an entrepreneurial development strategy. Most entrepreneurs in the region operate in isolation, with little if any support from each other. Training initiatives to empower small and medium size business owners are not in place. There are no non-governmental organisations (NGO's) looking at the interests of entrepreneurs. The culture of entrepreneurship in the region is low. People do not explore opportunities or lack innovation in term of creating opportunities. There is a lack of innovative business ideas that reflect the on the offerings of the region. There is a considerably low level of youth involvement in business in the region. One of the contributing factors to this state of affairs could be due to the fact that the skilled youth of the region end up settling in other parts of the country. Their move is influenced by lack of big businesses that offers employment, especially to professionals in the region. There isn't enough value adding businesses in the region. The majority of businesses do not employ more than 10 people. The majority of businesses only generate a monthly income of between R20 000 and R50 000. There is a very low level of awareness about government support and cooperative services agents by the Ngwathe entrepreneurs. From the literature review a lot of evidence suggests that entrepreneurs need support and networking structures. The empirical study results supported the need for a supportive and cooperative environment for entrepreneurs in the region. In line with the both the literature and empirical review findings, an Entrepreneurial Development Strategy for the Ngwathe region was drafted. The main objectives of the strategy are to:+ provide entrepreneurial skills training;+ provide support to all businesses;+ facilitate business networks;+ Build skills capacity;+ facilitate venture capital;+ improve infrastructure;+ form business clusters; and+ Set-up Ngwathe towns as centres of consumption