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SAJEMS NS 6 (2003) No 3 514

Contribution of Support and Incentive 
Programs to Entrepreneurial Orientation and 
Start-up Culture in South Africa 
________________________________________________________________ 
 
Marius Pretorius and Jurie van Vuuren 
 
Department of Business Management, University of Pretoria 
________________________________________________________________ 
 
ABSTRACT 
 
This paper discussed the role of an entrepreneurial orientation (EO) and start-up 
culture to enhance economic development. It investigates the proposition that 
the South African culture is conducive to EO. Secondly, this paper investigates 
the available programs from an entrepreneurial culture perspective. Programs 
are categorised to delineate their different focuses. Key issues reported include 
the program focus, the level of venture development aimed at and their target 
groups. Finally it questions the contribution of these programs to entrepreneurial 
culture and suggests remedies. The paper concludes that despite the number of 
different programs that exist, the concept of entrepreneurial culture to improve 
EO is not addressed.  

JEL M13 
 
1 INTRODUCTION 
 
In the rush to stimulate entrepreneurial activity, policy makers often rely on 
success stories, anecdotes and cases to demonstrate the utopia that will result 
when entrepreneurial activities take off.  
 
In South Africa, as in many other countries, the national strategy for the 
development and promotion of small business in South Africa identifies small 
business development and the empowerment of entrepreneurs as the most 
important avenue for economic growth. (Act 102, 1996: 10). Gorman, Hanlon 
and King (1997: 56) confirm that there is widespread recognition that 
entrepreneurship is the engine that drives the economy of most nations. 
Timmons (1999: 4) also refers to entrepreneurship as America�s secret weapon 
and argues its value as the main contributor to the superior position that the USA 
holds as part of the global economy. He suggests entrepreneurship to be the 
fundamental difference in the American culture where 37 per cent of the  



SAJEMS NS 6 (2003) No 3 515

population is somehow involved in their own ventures apart from their regular 
jobs. 
 
This opinion underscores the need for large numbers of entrepreneurs for a 
successful economy as described by Sunter (1994: 4). However, four years later, 
Sunter (1998: 2) still calls for entrepreneurial development and again highlights 
its importance when he states, �It is only through the creation of millions of 
enterprises that millions of jobs will be created�. Today, the use of the phrase 
entrepreneurial development has become a buzzword in the speeches delivered 
from almost every public platform, but the question could rightly be asked; what 
has changed in entrepreneurship, small business development and economic 
growth since the initial call?  
 
Driver, Wood, Segal and Herrington (2001) in their annual global 
Entrepreneurship Monitor (GEM) reports an overall lack of entrepreneurial 
elements from the culture of South Africa. Factors such as: attitude towards 
entrepreneurship, entrepreneurial role models, negative mindsets towards 
confidence, initiative and creativity, negative perception towards 
entrepreneurship as a career choice and negative attitude towards failure are all 
sited to contribute towards the South African entrepreneurial culture. 
 
 
2 PURPOSE OF THE ARTICLE 
 
The focus of this paper, thus, centres on entrepreneurial culture and its role and 
effect within the society under the premises that when it exists or is high, growth 
in numbers of entrepreneurs and their associated business ventures will benefit 
economic development. Understanding cultural influences on the development 
of entrepreneurial potential is crucial to the internalisation of entrepreneurship 
theory and the development and implementation of policy initiatives to 
encourage entrepreneurship. 
 
2.1 Entrepreneurship 
 
The construct of entrepreneurship is both complex and controversial as there is 
no agreement on the definition. Kaufmann and Dant (1998: 7) categorize 
entrepreneurship based on the different contemporary representative definitions 
found in the literature. They conclude that three perspectives can be determined 
by the definition focuses namely:  
� Definitions stressing the characteristic traits or qualities supposedly 

possessed by entrepreneurs including risk taking, leadership, motivation, 
ability to resolve crises, creativity, low level of risk aversion, decision 
making ability and more. 

 



SAJEMS NS 6 (2003) No 3 516

� Definitions stressing the process of entrepreneurship and it�s result 
including the creation of new enterprise, introduction of new 
combinations of production factors and new, unique and valuable 
combinations of resources in an uncertain and ambiguous environment.  

� Definitions focussing on the activities entrepreneurs perform including 
connecting to new markets, overcoming market deficiencies, creating and 
managing contractual arrangements and input transforming structures, 
supplying resources lacking in the marketplace, activities to initiate, 
maintain and develop profit oriented business, to fill currently unsatisfied 
needs and to take operational control of the organization. 

 
The study of Kaufman and Dant (1998), however, concludes that consensus 
about the construct of entrepreneurship remains elusive. Morris (1997: 17) 
defines entrepreneurship as the process through which individuals and/or teams 
create value by bringing together unique packages of resource inputs to exploit 
opportunities in the environment. It can occur in any organizational context and 
results in a variety of possible outcomes, including new ventures, products, 
services, processes, markets and technology. Given this broad definition of 
entrepreneurship, its applicability is much broader than merely limiting it to the 
discipline of business only.  
 
This paper, however, is concerned with entrepreneurial thinking, orientation, 
activities and the way of being entrepreneurial as found specifically in its 
manifestation within individuals and how it is viewed and supported by the 
society and the impact of the culture as a contextual factor determining the 
entrepreneurial way of being. 
 
2.2 Entrepreneurial culture and entrepreneurial orientation  
 
The assertion that there is a greater predisposition or propensity towards 
entrepreneurship in some societies than others points to the implicit role of 
culture.  Thomas and Mueller (2000: 289) quote Weber (1904) who argues that 
at the society level, differences in entrepreneurial activity could be explained by 
cultural and religious factors.  They also quote McClelland (1961) who 
suggested that socialization factors such as parental influences determine the 
need for achievement, which in turn generates entrepreneurial propensity within 
a society. He further predicted that societies with cultures that emphasise 
achievement would exhibit greater levels of entrepreneurship than societies that 
did not. 
 
Culture considers the shared values, beliefs and norms of a society and is an 
important contextual factor affecting the number of potential entrepreneurs in a 
given community, ethnic group, region or country. Maasdorp and Van Vuuren  
 



SAJEMS NS 6 (2003) No 3 517

(1998: 727) propose a model that includes the population (society, supporting 
and cooperative environments to determine the number of entrepreneurs entering 
the economy through venture start-ups. They suggest these factors influencing 
entrepreneurial environment include several aspects including: the acceptability 
of entrepreneurship in the society, availability of financing, training and 
development programs, deregulation and even infrastructure. 
 
Meuller and Thomas (2000: 52) conclude that some cultures are more conducive 
for entrepreneurship than others. Culture, it appears, may condition potential for 
entrepreneurship, generating differences across national and regional 
boundaries. 
 
The question is therefore: How do cultural mores, values and beliefs either 
encourage or discourage individuals from entrepreneurial activity. 
Understanding the nature of the relationship between culture and 
entrepreneurship can provide valuable information to policy makers to motivate 
new venture creation and thereby increase employment and economic growth 
that is so desperately needed.  
 
Thomas and Mueller (2000) describe four dimensions of culture for different 
countries and identify differences between countries and even within regions of 
the same country. The four dimensions they used to describe culture are based 
on Hofstede (1980) and include: 
� Innovativeness, which include creativity, imaginative, inventive, 

enterprising, original, resourceful and farsighted. 
� Internal locus of control, which is closely related to individualism 

compared to collectivism on the profile of Hofstede (1980).  
� Risk taking, which is closely related to the opposite of risk avoidance 

described by Hofstede (1980). 
� Energy, which is associated with individualism as described by Hofstede 

(1980) as well as time usage.  
 
These authors conclude that three of the above traits associated with 
entrepreneurial potential, namely internal locus of control, moderate risk taking 
propensity and high energy level decrease in frequency as cultural distance from 
the United States profile increases where the US is taken as the benchmark in 
fitting the culture dimensions supporting entrepreneurial activity and orientation. 
  
Anonymous (2001: 60) in the Economist reports some visible changes taking 
place within the Korean corporate culture namely: 
! Fear of failure is no longer the deterrent to starting new business in South 

Korea than it once was, a big step forward in a country in which failed 
businessmen have traditionally been looked down on. 



SAJEMS NS 6 (2003) No 3 518

! Performance based pay schemes to motivate employees to develop 
achievement orientation (internal locus of control). 

! Abandoning of lifetime employment for movement between jobs, which 
encourages risk taking. 

 
Considering these changes it seems that components of entrepreneurial culture 
are more subject to change than factors generally associated with culture.  Billig 
(1994: 679) also suggests that entrepreneurial culture may not be as deeply 
entrenched than other cultural determinants. It is therefore more flexible in its 
response to changes in the political, economic and social conditions.  
 
Dana (1995: 95) suggests that social values may cause entrepreneurs to be 
looked up to, or down upon, depending on the beliefs of society and their 
prominent moral code of behaviour. He sites the case of men in Laos that 
embraces the traditional values of Theravada Buddhism, a belief system that 
opposes achievement motivation as it proposes the elimination of �desires�, 
which in that culture is the root of all evil. A respectable person within the Laos 
culture, then, should not work towards the satisfaction of materialistic desires. 
However, it is acceptable for women to do so and the result is women 
entrepreneurs who works and trade.  
 
The lack of enterprise and entrepreneurial studies at school, in vocational 
education and training in higher education forms part of the reason why there is 
not a strong small business culture in Australia (Donnely, 1995: 21). Education 
forms a crucial part of the fixation of a culture. Lee and Peterson (2000: 403) 
quotes Berger�s statement that culture serves as the conductor while 
entrepreneurship is the catalyst for the development of an entrepreneurial 
orientation within individuals. 
 
Lee and Peterson (2000: 410) also proposed a model depicting the relationship 
between culture and entrepreneurial orientation and how it relates to global 
competitiveness (See Figure 1). They compare different countries (cultures) 
including the United States, Former Russian countries, Japan, China and Mexico 
and show clearly that entrepreneurial orientation is very different between those 
measured. They conclude that a culture that is low on power distance, weak in 
uncertainty avoidance, masculine in nature, individualistic, achievement 
oriented, and universalistic will engender a strong entrepreneurial orientation, 
characterised by autonomy, pro-activeness competitive aggressiveness, 
innovativeness and risk taking. Such a strong entrepreneurial orientation will 
ultimately lead to increased entrepreneurship and global competitiveness.  



SAJEMS NS 6 (2003) No 3 519

Arguing that entrepreneurship and the manifestation thereof within the culture 
are complex constructs, the understanding of the relationship cannot be less 
complex. Meuller and Thomas (2000: 52) indicate that culture is only one of 
many contextual factors that contribute to the rate of venture creation. It is 
argued that the components of culture are often vague and depends on 
perceptions, intention and even the motivational level of the researcher. Suffice 
it to say that the ideas associated with this paper have as aim to open what is 
generally perceived as a �taboo� subject in the South African context as culture 
is generally viewed a racial issue and very sensitive.  
 
The authors are of the opinion that a core issue hampering entrepreneurial 
development may be covered up by being politically correct, as seen in the 
figure below. Rather than opening a can of worms that may lead to meaningful 
discussion, research and action to improve the current situation if it proves to be 
relevant, people tend to shy away from the risk of being politically incorrect. 
The authors believe that it is worth the risk if it can make a difference and based 
on the evidence cited, it is very relevant. 
 
This paper concentrates on South African context but could have wider 
application especially cited in the context of the rate of globalisation. 
 
It is argued that while there are several programs available to enhance economic 
development, few, if any, impact on the development of an entrepreneurial 
culture as suggested in this text.  
 
Three of the key programs of South African service providers are investigated. 
The key vehicles in South Africa that have to do with entrepreneurial 
development is the Department of Trade and Industry (DTI) and its 
implementation arms namely the IDC, Ntsika and Khula. This research 
evaluated the goals of their programs and involvement in the economic 
development through business creation. 
 



SAJEMS NS 6 (2003) No 3 520

Figure 1 Model depicting the relationship between culture and 
entrepreneurial orientation as it relates to entrepreneurship and 
global competitiveness (Lee & Peterson, 2000: 410) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 PROPOSITIONS 
 
Firstly it is required to determine whether the South African culture is conducive 
to entrepreneurial orientation and therefore the proposition is set that the South 
African culture is conducive to an entrepreneurial orientation rather than not 
being conducive. 
 
Secondly it is required to determine whether development and support programs 
contribute to the enhancement of entrepreneurial start-up culture and therefore  
 
 

ENVIRONMENT 
• Political 
• Education 
• Economic 
• Social 

CULTURE 
• Power distance 
• Uncertainty 

avoidance 
• Individualism 
• Masculinity 
• Achievement 
• Universalism 

ENTREPRENEURIAL 
ORIENTATION 
• Autonomy 
• Competitive aggressiveness 
• Pro-activeness 
• Innovativeness 

ENTREPRENEURSHIP 

GLOBAL COMPETITIVENESS 



SAJEMS NS 6 (2003) No 3 521

the proposition is set that official development and support programs contribute 
to the enhancement of entrepreneurial start-up culture rather than not contribute. 
 
 
4 METHODOLOGY 
 
Firstly, the literature was searched for references to South African or African 
culture and its impacts on entrepreneurial orientation and possible relationship to 
the culture dimension as described by Lee and Peterson (2000: 405) based on 
the framework of Hofstede (1980) and Trompenaars (1994) that they cited.  
 
Thereafter, the most well known programs namely those of the DTI and its 
associated implementation bodies (IDC, Khula and Ntsika) with their different 
programs were investigated as a cross sectional secondary data study. The 
programs have different goals and target groups as part of their overall aim to 
improve economic growth and development. The available programs were 
evaluated based on how they are described in the promotional material and web 
sites of the DTI with an investigative evaluative method.  
 
The descriptions of the goals and prerequisites for each program were evaluated 
and classified into categories for business size and growth stage of the venture 
the programs are aimed at. Figures were developed to depict the difference 
between programs. 
 
 
5 FINDINGS 

 
Table 1 depicts references from the literature that are directly related to South 
African, African, Sub Sahara African and even to developing economies where 
African is implied and its relationship to the dimension of culture.  
 
Table 1 Categorising African culture for the main dimensions that may 

impact on entrepreneurial orientation based on Lee and 
Peterson�s evaluation 

 
Cultural 

dimension1 
Conducive to 
entrepreneu-
rial culture2 

Categorisation 
for African 

culture 

Reference for 
African evaluation 

Uncertainty 
avoidance 

Weak Strong Themba et al. (1999: 110) 
Driver et al. (2001: 4) 
Sono (1994) 

    
 
 
 

   



SAJEMS NS 6 (2003) No 3 522

Table 1 continued 
Cultural 

dimension1 
Conducive to 
entrepreneu-
rial culture2 

Categorisation 
for African 

culture 

Reference for 
African evaluation 

Power 
distance 

Low High Themba et al. (1999: 110) 
Fadiman (2000: 82) 
Sono (1994) 

Masculinity Masculine Féminine Themba et al. (1999: 113) 
Individualism Individual Collective Rutashobya (1999:39) 

Themba et al. (1999: 112) 
Fadiman (2000: 80) 
Sono (1994) 

Achievement Achievement Ascription Rutashobya (1999: 39) 
Driver et al. (2001: 42) 

Universalism Universal Particular Olomi (1999: 166) 
Sono (1994) 

Dimensions based on Lee and Peterson 2000: 405 
 

1 Power distance � degree of tolerance for hierarchical or unequal 
relationships where low power distance is conducive to entrepreneurial 
orientation. Uncertainty avoidance � degree of acceptance for uncertainty or 
willingness to take risk. Individualism � degree of emphasis placed on 
individual accomplishment. Masculinity � degree of stress placed on 
materialism and wealth (masculine) versus harmony and relationships 
(feminism). Achievement � describes how power and status are achieved 
either through competition and hard work (achievement) versus birthright, 
age or gender (ascription). Universalism � describes the norms for regulating 
behaviour either through a code of laws that apply equally to all 
(universalism) that are conducive to entrepreneurial orientation versus some 
who enjoy special rights or privileges because of their status (particularism).  

2 Coincides with the evaluation of the US culture. 
 

Figure 2 depicts the distribution of the programs offered by the DTI, IDC and 
Khula according to their focus, size and level of its target market. Although the 
categories are subjective, the programs are positioned according to their focuses 
used. 

 



SAJEMS NS 6 (2003) No 3 523

Figure 2 Graphical presentation showing that the program focuses of 
IDC, DTI, and Khula programs lean towards larger ventures 
and growth rather than SMME and start-ups (own compilation) 

 
 

Combined program focuses �
Khula      IDC       DTI

External 
Investors

Growth
Pre start /
Innovation 

/ 
Incubation

Life 
cycle 
stage 
vs Size

Survival
Prospect

Micro

Small

Medium

Large

Other: 
Training
Market 

Research
Competitiven
ess & Export

Expansion  / 
Recapitalize

Finance 
Bridging

Start-up /
Acquisition

18

27 327

24

12

3
9

10
30 2

19

11 15

16 35

13

17

1

Proposed

Existing

21
33

29 30
34

22
4

20
8

25

26

6 31

23

 
 

 
Also shown on Figure 2 are two lines categorising the �existing� focus versus 
the �required� focus where it is believed that programs will contribute to more 
start-ups. 

 
The focuses of the Ntsika programs are differently depicted in Figure 3. The 
core target markets are the service providers to a large extent and the 
entrepreneurs to a lesser extent.  
 



SAJEMS NS 6 (2003) No 3 524

Figure 3 Graphical presentation showing that the program focuses of 
Ntsika programs lean towards service providers more than 
towards SMME�s (own compilation) 

 
 

N ts ik a p ro g ra m  fo c u s e s  

S M M E  
p o o l

w ith  n e e d s  fo r 
s e r v ic e s

S e r v ic e

P r o v id e rs

(L B S C �s )

G o v t

D e p t�s

S M M E �s

1

2

3

4 5 6 7 8

9

1 01 1

1 2

1 3

1 4

1 5

1 6

1 7

 
 
 
 
6 CONCLUSION 
 
From Table 1 it seems that the available literature points towards a culture in 
South Africa that is not supportive to the development of an entrepreneurial 
orientation. Although empirical research is required to prove or disprove this 
generalisation, indications are clear to those who have the nerve to postulate it 
that: The evaluation points that entrepreneurial orientation and start-up culture 
levels are oppositely valued especially for uncertainty avoidance, individualism 
and achievement. Power distance, masculinity and universalism appear to be 
evaluated as sending mixed signals about their status within the South African 
society.  
 
Based on the literature evidence, it is fair to reject the first proposition that the 
South African culture is conducive to entrepreneurial orientation. Empirical 
research in this regard is, however, required.  
 
Figure 2 shows that there is a general program convergence on the level of 
medium and large ventures although some programs tend towards small  
 
 



SAJEMS NS 6 (2003) No 3 525

business. The core focuses of the programs from Khula, IDC and DTI include 
finance, growth, expansion and competitiveness (through export) that are more 
relevant for existing business than for start-ups.  
 
Figure 2 also shows that there is a general tendency of the Khula, DTI and IDC 
programs to focus on the larger and existing ventures as their target audience. 
Very few programs are aimed at micro and small business. Although some 
programs do focus on start-up the prerequisites suggest that they are more 
relevant for larger ventures. 
 
The question arises whether this could be construed as a latent 
acknowledgement that real growth comes from true entrepreneurs, which 
eventually create larger businesses than the conventional small businessperson. 
This, despite the general thinking that growth depends on SMMEs as described 
earlier in this paper. Could this also be support for large businesses as they are 
the real employment creators and therefore the focus rather than micro and small 
business? 
 
One could argue further that these programs were not designed to influence 
anything else than what they are doing. The question is whether they could 
contribute to enhancement of entrepreneurial culture and if so, how?  There, 
however, seems to be no indication that these programs contribute directly 
towards the development of entrepreneurial orientation.  
 
Apparently the role of Ntsika is more towards the assistance of small business 
and the creation of more micro business where one would tend to find programs 
that are more related to entrepreneurial culture. 
 
Figure 3 further shows the focuses of the Ntsika programs. The majority of the 
programs are focused on assisting their service providers. A smaller portion of 
the Ntsika programs focus directly on the entrepreneurs that are the proposed 
beneficiaries of the programs whether directly or indirectly.  The question is 
whether Figure 3 shows any support to the issues related to improvement of 
entrepreneurial orientation. Ntsika�s strategy requires a strong service provision 
sector to impact on the SMME pool that requires its services and therefore 
explains the larger portion of the programs that are aimed at the service 
providers. The question arises that if the service providers need such an amount 
of inputs from Ntsika before they can operate, what is the level of 
entrepreneurial orientation within these service organisations.      
 
Based on the evidence presented its seems that the second proposition that 
official support programs contribute to the enhancement of entrepreneurial 
orientation and start-up culture should be rejected and the opposite accepted. 



SAJEMS NS 6 (2003) No 3 526

7 RECOMMENDATIONS 
 
Accepting that these programs do not support the enhancement of 
entrepreneurial orientation and start-up culture opens the debate for how these 
can be influenced.  
 
Figure 1 shows the role of the environment and the social and specifically the 
education environment should be investigated. Further research is, therefore, 
proposed into the role of entrepreneurship education within the primary and 
secondary school curricula to impact at the earliest potential intervention point 
rather than at the stage where IDC, DTI, Khula and Ntsika incentives are 
focused. The DTI may investigate entering into discussions with the department 
of Education to labour this issue. 

 
Based on the general line of the discussion in this paper, Table 2 identifies some 
speculative issues that require further research. When looking at entrepreneurial 
orientation and start-up culture, al of these factors may be relevant. 
 
Table 2 Contributors to entrepreneurial culture based on speculative 

perceptions to stimulate debate (own compilation) 
 

Environmental 
contributors 
relevant for 

entrepreneurship 

Speculative perception 
of the typical South 

African scenario 

Speculative perception of 
the typical US scenario 

General view 
towards failure 

Bad � shows poor 
judgment 

Good − show perseverance 

Achievement 
motivation 

Someone will do it for 
you 

I want to do it myself 

Innovation This is how it works � 
don�t tamper with it 

I can do it better 
I�ll find an alternative way 

Locus of control I can�t change the way 
things works 

I am in charge 

Risk propensity Don�t make a mistake 
Find right answer only 
Try to win the lotto 

There will be more chances 
if this doesn�t work. 

Energy Passivity and wait for 
someone to do it 

Fired up to do something 
yourself 

Typical role models Lack of entrepreneurial 
role models 

Achievers in business and 
sport through hard work 

Aspirations Don�t hurt the other Make a difference 
  



SAJEMS NS 6 (2003) No 3 527

ENDNOTES 
 
1 Paper originally presented at: South Africa Entrepreneurship and Small 

Business Association, (SAESBA) Conference at Sun City, 4-6 August 
2002. Awarded best paper prize. 

2 The assistance of the officials from the different institutions is hereby 
acknowledged. Opinions expressed in this paper and conclusions arrived 
at, are those of the authors and are not necessarily to be attributed to the 
institutions and programs investigated. 

 
 
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