BRICS – Total Entrepreneurial Activity

Brics - Entrepreneurial activity bubble map

The Global Entrepreneurship Monitor (GEM) provides a basis for comparing entrepreneurial activity, aspirations and intentions globally. The chart below shows the Total early-stage Entrepreneurial Activity (TEA). TEA is defined as

TEA = Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business

The data shows that there is a gap between South Africa which is has moderate economic growth, and Brazil, India and China which have significantly higher economic growth rates in terms of Total Entrepreneurial Activity. (Curiously, Russia has high growth rates but low TEA rate). The data however suggests that South Africa may be catching up, with these high growth countries.
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Brazil becomes less equal, South Africa gets more unequal

Inequality can be reduced

, via Wikimedia Commons “]IBSA Summit Presents Brazil has a remarkable achievement, as it has reduced inequality over the last decade, as shown in the chart below. The exact reasons for the reduction in inequality is hotly debates in Brazil, as are the methods of calculating inequality. There are sceptics on this outcome, and those praising this achievement. Just so that we are clear – Brazil remains a very unequal society. South Africa has however become more unequal, and this fact is not disputed with official development indicators broadly agreeing with this finding. The chart below shows data from The World Bank for the Gini Coefficient. We have selected the BRICS countries to represent here, but the focus is Brazil and South Africa. It suggests that over a short period of time, inequality can be reduced, in an environment which reduces poverty and increases jobs. (I have added a note to the editorial calendar for Zapreneur, as it would be informative to better understand the reasons behind the outcomes.)

Lulismo

One debate that is emerging on explaining Brazil’s outcomes is occurring under the moniker “Lulismo”. The word derives from the name of President Lula, and seeks to explain the choices that were made by Brazil during that period. It however also suggests that there might be doubts of future leaders being able to replicate the gains capable under a leader, like President Lula. The debate however is largely conducted in Portuguese, which means that the textures and nuances of the debate cannot be fully comprehended by someone that does not speak Portuguese.
The features of the debate that we could glean ask a couple of demanding questions:

  1. Is the reduction of inequality a small victory for moving a leftist programme to the centre? The suggestion being that a more egalitarian outcome could have been achievable.
  2. Are the results simply derived from a commodity boom and will prove short-lived in an economic downturn?
  3. Are Brazil outcomes rather the product of a longer run reform programme, which included neo-liberal restructuring under previous administrations?
  4. Are the Brazilian outcomes the result of a developmental state, which saw the Workers Party (PT) introduce social and economic measures that are the cornerstone of the success?

The debate seems furious and polarised. The underlying question is one that South Africa would love to have -Why has our society become more equal, and can we sustain it over the longer term?
 
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Brics – Human Development Index Comparisons

Recent discussions in the media has focussed on whether South Africa belongs in the exclusive BRICS (Brazil, Russia, India, China and South Africa) group of countries. Over the last year I have increasingly been looking to Brazil and India as examples of what might be possible. The improvements in the Human Development Index (HDI) of these countries suggests we can learn a great deal from them. Of course, in Brazil and India there are disputes on the numbers, however the take home is this – South Africa’s HDI has fallen primarily due to poor health outcomes, which are associated with the impact of HIV/Aids. Our educational performance has also been weak. The silver lining is that current initiatives by government in the health and education sectors have better prospects for success, than our first policy choices after 1994.

Human Development Index – Brazil, South Africa, China, Russia and India

The chart shows the Human Development Index (HDI) for the BRICS countries (i.e. Brazil, Russia, India and South Africa) from 1980 to 2011. The data shows that Russia, India and Brazil have improved their HDI, whilst South Africa has seen a decline in its HDI since the mid-1990s. It underscores the point, that we must be learning more from the experiences in Russia, but especially from Brazil and India.
BRICS HDI
At first glance South Africa’s performance looks exceptionally weak. To better understand the outcomes, it is important to look at the components that make up the HDI.
Click here for an interactive chart.
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