The document summarizes the key findings from a roundtable discussion on strengthening the ecosystem for edupreneurs in South Africa. Regarding access to finance, it was found that funding availability depends on a venture's growth phase, with most funding requiring proof of revenue/profits. There is little early-stage venture capital. Government has a role to play in seed funding and piloting programs. Legal structures like hybrid non-profit/for-profit models add complexity. Edupreneurs in townships face higher perceived risk. Recommendations include mapping funding opportunities and having grantmakers provide early-stage capital.
Business Incubators Capabilities within the Developing Worldhmendoza716
This paper discusses the roles and impacts of business incubators within the developing world. The context of this paper will look into the history of business incubators, its objective, their strengths and weaknesses, and recommendations for a successful program. In addition, this paper will discuss past studied incubation programs in both Brazil and Nigeria, and how they fared within their environment. Overall, the facts within this paper indicate that business incubators can be successful if it is implemented and operated correctly.
In 2013, in response to the opportunities presented by Africa’s rapidly growing youth population and the ubiquity of information and communications technologies across the continent, The Rockefeller Foundation launched its Digital Jobs Africa initiative. The initiative aims to enable young people to access jobs by providing them with in-demand technology-related and other employability skills. Now just past its two-year mark, the Foundation is taking stock of the rich learning that has emerged from the initiative.
The View from Overseas - Creating Venture Ecosystems by Utilizing Kansai's St...Joshua Flannery
A view from overseas on the strengths, weaknesses and opportunities for the Osaka and Kansai ecosystems in Japan.
This was presented at the 58th Economics and Management Summit in Kyoto, Japan.
Acknowledgements:
The GEDI Rankings www.thegedi.org
Startup Genome Survey https://startupgenome.com/reports
This report highlights four critical elements of training models that lead to positive employment outcomes for trainees. First, training models should be demand-driven, meaning they are responsive to employer needs by teaching the specific skills required by industry.
STARTUP INCUBATORS -As an Opportunity for Entrepreneurship
What are startup incubators?,
What do they provide?,
Incubator companies in India,
services provided by Incubators,
Phases of Incubation,
Reasons to join business incubators,
Process of Startup Incubators,
The key ingredients,
The changing role of startup incubators,
Examples of startup incubators.
Preparing the Poor and Vulnerable for Digital Jobs: Lessons from Eight Promis...The Rockefeller Foundation
This report profiles successful demand-driven training programs from across the globe. These programs intentionally configure curriculum and other design elements to meet the needs of potential employers. Demand-driven training programs are a key pillar of our strategy for Digital Jobs Africa Initiative because they help ensure that the skills people learn are right for the job they are seeking. The report includes key lessons from the profiled models that can be used as a guide to successful demand-driven training programs.
A business incubator is a company that helps new and startup companies to develop by providing services such as management training or office space.The National Business Incubation Association (NBIA) defines business incubators as a catalyst tool for either regional or national economic development. NBIA categorizes their members’ incubators by the following five incubator types: academic institutions; non-profit development corporations; for-profit property development ventures; venture capital firms, and combination of the above
Business Incubators Capabilities within the Developing Worldhmendoza716
This paper discusses the roles and impacts of business incubators within the developing world. The context of this paper will look into the history of business incubators, its objective, their strengths and weaknesses, and recommendations for a successful program. In addition, this paper will discuss past studied incubation programs in both Brazil and Nigeria, and how they fared within their environment. Overall, the facts within this paper indicate that business incubators can be successful if it is implemented and operated correctly.
In 2013, in response to the opportunities presented by Africa’s rapidly growing youth population and the ubiquity of information and communications technologies across the continent, The Rockefeller Foundation launched its Digital Jobs Africa initiative. The initiative aims to enable young people to access jobs by providing them with in-demand technology-related and other employability skills. Now just past its two-year mark, the Foundation is taking stock of the rich learning that has emerged from the initiative.
The View from Overseas - Creating Venture Ecosystems by Utilizing Kansai's St...Joshua Flannery
A view from overseas on the strengths, weaknesses and opportunities for the Osaka and Kansai ecosystems in Japan.
This was presented at the 58th Economics and Management Summit in Kyoto, Japan.
Acknowledgements:
The GEDI Rankings www.thegedi.org
Startup Genome Survey https://startupgenome.com/reports
This report highlights four critical elements of training models that lead to positive employment outcomes for trainees. First, training models should be demand-driven, meaning they are responsive to employer needs by teaching the specific skills required by industry.
STARTUP INCUBATORS -As an Opportunity for Entrepreneurship
What are startup incubators?,
What do they provide?,
Incubator companies in India,
services provided by Incubators,
Phases of Incubation,
Reasons to join business incubators,
Process of Startup Incubators,
The key ingredients,
The changing role of startup incubators,
Examples of startup incubators.
Preparing the Poor and Vulnerable for Digital Jobs: Lessons from Eight Promis...The Rockefeller Foundation
This report profiles successful demand-driven training programs from across the globe. These programs intentionally configure curriculum and other design elements to meet the needs of potential employers. Demand-driven training programs are a key pillar of our strategy for Digital Jobs Africa Initiative because they help ensure that the skills people learn are right for the job they are seeking. The report includes key lessons from the profiled models that can be used as a guide to successful demand-driven training programs.
A business incubator is a company that helps new and startup companies to develop by providing services such as management training or office space.The National Business Incubation Association (NBIA) defines business incubators as a catalyst tool for either regional or national economic development. NBIA categorizes their members’ incubators by the following five incubator types: academic institutions; non-profit development corporations; for-profit property development ventures; venture capital firms, and combination of the above
Relevance of entrepreneurship training in a market driven economy konayumaGabriel Konayuma
The presentation seeks to contribute to the development of strategic interventions that promote sustainable socio-economic development in Zambia and to assess how the TEVET Policy has addressed entrepreneurship training in Zambia.
Promote entrepreneurial culture in the African the agro-food sector.Francois Stepman
Foster sustainable development through impact entrepreneurship. Presentation 17 May 2017. Ghent University, Faculty of Bioscience Engineering. Investing in and collaborating with Africa.
Pitched a novel model for establishing a Think Tank to improve the Indian startup ecosystem.
Key goals include:
1) Driving Technology development
2) Studying the co-evolution society and technology
3) Actively collaborating with the government, International community for Policy making and Advocacy.
Collaborated with Vijay Raghavan.
Photo by Jo Szczepanska on Unsplash
Using OERs & Wiki’s to Support Entrepreneurship Training in TVET Institutions...Gabriel Konayuma
Using Open and Educational Resources (OERs) and Wiki’s to Support Entrepreneurship Training in Technical and Vocational Education and Training (TVET) Institutions in Zambia. Having appropriate teaching and learning materials that suits the needs of learners in Entrepreneurship has been a challenge in TVET in Zambia.
The availability of OERs and affordances of wikis offer an opportunity to address this challenge. OERs and wikis have a greater social presence than text books.
Does the Islamic finance industry value its people? Joy Abdullah
Islamic finance is on the cusp of a golden opportunity to influence and implement its efficacy globally. Yet this opportunity can only be capitalized on if the industry is willing to embrace innovative ideas and take cognizance of the socio-economic changes that have come about in the past decade.
My article on this published in the IFN Education Jan 2016 issue.
ODA for Capacity Building in the Social Enterprise- and the SME-Sector in IndiaMartin Vogelsang PhD
Based on my long-standing experience as impact investor in India I would like to suggest that Official Development Assistance (ODA) coming into the country is disbursed more strongly towards capacity building (training, education) and supporting the incubation of viable social enterprises and inclusive businesses catering to the “Base-of-the-Pyramid”. Investing into this area of the Indian economy would not only help alleviate to poverty and at least partly solve some of the grave environmental problems the country is facing. Such an initiative could also help India’s corporate sector become more engaged in creating and scaling innovative solutions in the areas of technology or financial services that could open up new markets for them.
Relevance of entrepreneurship training in a market driven economy konayumaGabriel Konayuma
The presentation seeks to contribute to the development of strategic interventions that promote sustainable socio-economic development in Zambia and to assess how the TEVET Policy has addressed entrepreneurship training in Zambia.
Promote entrepreneurial culture in the African the agro-food sector.Francois Stepman
Foster sustainable development through impact entrepreneurship. Presentation 17 May 2017. Ghent University, Faculty of Bioscience Engineering. Investing in and collaborating with Africa.
Pitched a novel model for establishing a Think Tank to improve the Indian startup ecosystem.
Key goals include:
1) Driving Technology development
2) Studying the co-evolution society and technology
3) Actively collaborating with the government, International community for Policy making and Advocacy.
Collaborated with Vijay Raghavan.
Photo by Jo Szczepanska on Unsplash
Using OERs & Wiki’s to Support Entrepreneurship Training in TVET Institutions...Gabriel Konayuma
Using Open and Educational Resources (OERs) and Wiki’s to Support Entrepreneurship Training in Technical and Vocational Education and Training (TVET) Institutions in Zambia. Having appropriate teaching and learning materials that suits the needs of learners in Entrepreneurship has been a challenge in TVET in Zambia.
The availability of OERs and affordances of wikis offer an opportunity to address this challenge. OERs and wikis have a greater social presence than text books.
Does the Islamic finance industry value its people? Joy Abdullah
Islamic finance is on the cusp of a golden opportunity to influence and implement its efficacy globally. Yet this opportunity can only be capitalized on if the industry is willing to embrace innovative ideas and take cognizance of the socio-economic changes that have come about in the past decade.
My article on this published in the IFN Education Jan 2016 issue.
ODA for Capacity Building in the Social Enterprise- and the SME-Sector in IndiaMartin Vogelsang PhD
Based on my long-standing experience as impact investor in India I would like to suggest that Official Development Assistance (ODA) coming into the country is disbursed more strongly towards capacity building (training, education) and supporting the incubation of viable social enterprises and inclusive businesses catering to the “Base-of-the-Pyramid”. Investing into this area of the Indian economy would not only help alleviate to poverty and at least partly solve some of the grave environmental problems the country is facing. Such an initiative could also help India’s corporate sector become more engaged in creating and scaling innovative solutions in the areas of technology or financial services that could open up new markets for them.
Impact investment is a strategy to align the power of private markets to the social and environmental development needs of society at-large. From 2012-13, the Rockefeller Foundation, through its Impact Investing initiative, funded research in five Sub-Saharan African countries with the aim of understanding the barriers for impact investing across Africa, as well as recommending national policies to encourage the growth of the industry. This report synthesizes the findings of that work, examining the potential of impact investing as a ‘strategy of choice’ for African policymakers.
A presentation supported by a research report that focuses on development issues in Africa. The report is themed Innovation and Impact and is presented in three sections, hindsight, foresight and insight
Inside out finance issue-Indigo Article Page 14-17Loren Treisman
This is the Bertha Centre for Social Innovation's (University of Cape Town, Graduate School of Business) Magazine Inside:Out. This series looks at innovative financing for social enterprises and includes an article by me on pages 14-17 which explores why Indigo Trust is willing to take high risks across a diverse social portfolio.
Business with Impact – BEAM Summary Report of Future Watch Session, Team Finl...Team Finland Future Watch
Achieving Business Impact in Sub-Saharan Africa workshop brought together specialists from business, public, non-governmental and research organizations to discuss about the future business and collaboration opportunities in Sub-Saharan Africa. Discussion was organized around nine themes: urbanization, water management, education, financial services, collaboration in Africa, mobile Africa, energy, health and adding higher local value.
so much money so little time ...
nderstanding ESD Funders:
ESD funds are established by large corporations to support the growth and development of small and medium-sized enterprises (SMEs) within their supply chains or specific sectors.
These funds often provide financial assistance, mentorship, and other resources aimed at empowering these businesses and achieving broader socio-economic goals.
Finding Relevant ESD Funders:
Research relevant industry reports or publications: Look for reports or publications focusing on corporate social responsibility (CSR) initiatives in South Africa, which often mention ESD activities and potential funders.
Contact industry associations: Many industry associations maintain databases or resources listing relevant ESD programs and funders within their respective sectors.
Search online directories: Platforms like the "National Business Support Service (NBSS)" website list various business support resources, including some ESD programs: https://www.dsd.gov.za/.
Explore corporate websites: Many large corporations in South Africa have dedicated CSR or sustainability pages on their websites, often mentioning their ESD initiatives and potential funding opportunities.
Examples of Large Corporations with ESD Programs:
Massmart: Supplier Development Programme focuses on assisting black-owned and managed businesses within their supply chain.
Woolworths: Enterprise Supplier Development program supports emerging SMEs in their supply chain.
Investec: Nextwork Global Exposure program offers young entrepreneurs global exposure and mentorship.
Remember:
Eligibility criteria and focus areas can vary significantly between different ESD funders.
Carefully research each program to ensure it aligns with your business needs and target sector.
By utilizing these resources and conducting your own research, you can effectively identify and explore relevant Corporate ESD Funders in South Africa that might support your venture.
Insights into the process of successful cross-sector partnering
* create better case study collection and dissemination methods
* deepen understanding of case studies as tools for change.
Introduction to entrepreneurship.
A mandatory course for second year student at the department of business administration and entrepreneurship development, institute of public administration and management, University of Sierra Leone. This is an excerpt of the full course...
Idea to Impact Venture Well | Phil Weilerstein (@Refresh 2017 by TTGV)
FINAL REPORT ANDE_Edupreneurship_in_SA
1. Strengthening the Ecosystem for Edupreneurs in South Africa:
Findings from a roundtable discussion
Lisa van Eck
Aspen Network of Development Entrepreneurs
South Africa Chapter
May 2015
2. Photo courtesy of SPARK Schools
i Aspen Network of Development Entrepreneurs
Photo source: unknown
4. Table of Contents
Introduction: Context and Aims, Definitions and Project Structure 1
Access to Finance 3
The Regulatory Landscape 4
Infrastructure and Enabling Technologies 5
Markets and Demand 6
The Road to Scale: Human Capital and Skills 7
Ideas for Action 8
Conclusion 9
Appendix 10
iii Aspen Network of Development Entrepreneurs
5. 1
INTRODUCTION
After the success of a global series of Aspen Network of Development Entrepreneurs (ANDE) roundtables on
Strengthening the Ecosystem for Invention-based Entrepreneurship in Emerging Markets1
, ANDE South Africa set out to
replicate the model with a focus on edupreneurship (education entrepreneurship). This sector was chosen due to the
increase in private sector initiatives both globally and locally that are aiming to solve education related issues2
, the
burgeoning need across all stakeholder groups to focus on education as a national priority and as the first in a global
series of ANDE Edupreneurship roundtables set to take place in other chapters during 2015.
Context and Aims
South Africa’s education system is widely considered to be dysfunctional and is seen as a major hindrance to the
country’s development. ANDE believes that by leveraging the power of technology and innovation, entrepreneurs have
the potential to address global challenges, including advancing opportunities for underserved communities to access
education. ANDE members fundamentally believe that small and growing businesses (SGBs) can drive growth, promote
equity, and support environmental and financial sustainability.
In line with this perspective, the project aimed to drive efforts that advance opportunities and/or support impact
technologies that improve access to educational services in South Africa. The roundtable was designed to start a
dialogue and build a community between different stakeholders to share knowledge, expose gaps and identify areas for
collaboration. ANDE hopes that the effort will benefit the edupreneurship and SGB communities.
1
See Impact Inventing (Aspen Network of Development Entrepreneurs, 2014).
2
The Top 5 sectors for SA entrepreneurs in 2015 (SME South Africa, 2015) identified education as one of the top sectors for South African
entrepreneurs in 2015. The UN Foundation's Global Accelerator named education as one of their top social entrepreneurship trends for 2015.
What is Edupreneurship?
We use the term edupreneurship to refer to a subset of entrepreneurs that focus on developing
products or services that aim to improve or solve education related problems. We have made this
distinction, as we believe edupreneurs face a unique set of challenges that require further exploration.
For the purpose of this project, we focused on two types of edupreneurs: direct instruction models,
e.g. schools, with a particular emphasis on Low Fee Private Schools (LFPS); and EdTech entrepreneurs,
i.e. content and other service providers such as software and other technology platforms.
6. 2
Project Structure
The project had two phases – a research stage and the roundtable event. The two month research period began in
January 2015 and was carried out with the help of Emzingo MBA fellows Laura Tobar and Zoraida Velasco, who
undertook desktop research to identify key stakeholders and conducted targeted interviews in order to identify key
constraints and challenges that edupreneurs in South Africa face. This helped to inform the agenda for the day-long
roundtable event held in Johannesburg in March 2015. Dalberg Global Development Advisors also provided input into
the design of the roundtable.
In the research phase, a non-exhaustive list of 150 stakeholders was identified and 33 interviews were carried out over a
six-week period. A select group representing a broad range of stakeholders including funders, capacity development
providers, university actors, government actors, and edupreneurs were invited to attend the roundtable. 33 people
participated (see list below). The findings in this report are drawn from the preliminary research and are based on the
roundtable discussion. Findings will be included in the ANDE global report on completion of the Edupreneurship
roundtables in other ANDE chapters. This report will also be complemented by post-roundtable activities that the group
identified in the final session of the roundtable (see Ideas for Action).
Findings in this report are divided according to the following discussion topics as per the interviews and roundtable:
Access to Finance; the Regulatory Landscape; Infrastructure and Enabling Technologies; Markets and Demand; The Road
to Scale: Human Capital and Skills; and Ideas for Action.
What is a Small and Growing Business?
Supporting small and growing business is at the core of ANDE’s mission. Small and Growing Businesses
(SGBs) are defined by ANDE as commercially viable businesses with five to 250 employees that have
significant potential, and ambition, for growth. Typically, SGBs seek growth capital from $20,000 to $2
million. SGBs differ from the more traditional characterization of small and medium enterprises
(SMEs) in two fundamental ways. First, SGBs are different from livelihood-sustaining small businesses,
which start small and are designed to stay that way. Second, unlike many medium-sized companies,
SGBs often lack access to the financial and knowledge resources required for growth.
7. 3
FINDINGS
Access to Finance
In this session, it emerged that availability of funding is heavily dependent on the growth phase of the enterprise, with
most funding available for more mature enterprises which are post-revenue and in some instances, post-profit, and
largely absent at the early stage where softer, more risky capital is required. Some risk capital is made available by a
small handful of local high net worth individuals (HNWIs) and a niche pool of international investors, but access to these
networks is difficult and generally requires personal connections. Government funding (grant or other) is allocated based
on strict criteria, and generally requires a demonstrable proof of concept to be eligible. Most money that is available for
education projects is either focused on the public sector in the form of grants or invested in high-return / low-risk school
models which serve the high-end market and often have high-value property portfolios attached. There is next to no
early-stage venture capital in South Africa to fund start-up edupreneurs. The group felt that government has a role to
play in funding at this seed phase by providing start-up capital but also paying for pilots, which if proven to be successful,
can de-risk investments for private venture capital looking to invest in this space.
The second challenge concerns the legal structure of the ventures. Many organisations are forced to opt for a hybrid
structure – a not-for-profit and a for-profit entity3
, working in tandem, in order to raise funding from different sources.
This is complex and costly. Related to this are the difficulties that entrepreneurs operating in township economies face in
raising capital vis-à-vis those edupreneurs working in cities and suburbs. Edupreneurs starting schools in townships are
perceived to be higher-risk for funders and generally set up as not-for-profits to attract grant funding. This however,
deters commercial investors from investing in these schools. This may suggest a knowledge gap in terms of the returns,
both financial and social, that are possible through investing in these schools serving lower income communities. Finally,
a big challenge seems to be the ‘different language’ spoken by entrepreneurs and investors, a mismatch in terms of their
expectations, and lack of understanding of each other’s needs and requirements.
Recommendations
1. Do a mapping exercise of funding vehicles and investment opportunities which provides information about
what is available at the different growth phases, and the needs and requirements of all parties.
2. Practitioners are encouraged to work with grant makers to look at deploying their capital as early-stage risk
capital and replicate successful models to make impact investing and patient capital more available and
practical in South Africa. Create pooled funds to fund risky innovations and expand niche investment with an
education venture capital profile locally.
3
See A Guide to Legal Forms for Social Enterprises in South Africa (International Labour Organization, 2011)
Key Discussion Questions
• Is the funding landscape too risk averse, or is there a lack of investment ready opportunities for investors?
• Are there mechanisms to coordinate capital?
• Are existing financial instruments working and are government funds easily accessible?
• Can we leverage blended capital models and innovative financial instruments like Social Impact Bonds to de-
risk investment?
8. 4
3. LFPS models should split the real estate element from the operations company4
to attract investment.
4. Set up investment structures that allow a blending of returns and expectations.
5. Adopt a stakeholder approach and change mindsets in order to speak the same language. Introduce HNWIs to
the benefits associated with investing in edupreneurs. Match edupreneurs to serial entrepreneurs - the funder
buys into the entrepreneur and the entrepreneur chooses a funder that adds value.
6. Further explore social enterprise structures that could ameliorate complexities of hybrid models, lower
administration costs and incentivise funding flows into social businesses.
7. Re-orientate Corporate Social Investment (CSI) to initiatives that could be useful to edupreneurs and away
from unsustainable, short-term corporate branding opportunities.
The Regulatory Landscape
The group identified two policy areas that act as barriers to entry for edupreneurs: independent school registration5
and
the Public Finance Management Act (PFMA)/supply chain regulations.
The LFPS stressed their frustrations around the time required for registration of a new school, mentioning the difficulty
in having to secure a property far in advance (in order to meet registration requirements) of being able to start
operations and earn revenue. In some cases this may mean that school operators are forced to operate illegally for a
short time. This becomes less problematic once there is more than one school in operation and cash flow has been
established. Edupreneurs also mentioned a lack of understanding of policies by officials themselves and inconsistencies
such as last minute provincial registration date changes and petty corruption during inspections. The edupreneurs
agreed that the Independent Schools Association of South Africa (ISASA) is very helpful to them during this process.
The second problem – specifically affecting EdTech entrepreneurs and those innovating around new products and
services for the public schools system, is that the procurement rules in South Africa are not geared to encourage
innovation or support trying out new approaches. EdTech entrepreneurs stressed the importance of this, stating that
access to markets and customers (often government schools) was often more important to them than access to seed
funding.
One important initiative which might be able to provide some access into the public schools system is the National
Education Collaboration Trust (NECT). NECT is a multi-stakeholder effort to try to improve education outcomes in South
Africa by overcoming barriers to learning in certain priority districts and in particular to try to ensure CSI spend increases
its returns on investment in education. This presents a potential opportunity for edupreneurs, who have solutions to
specific problems, to be able to test their ideas at scale in certain districts. This is beginning to happen but in limited
4
A state funder suggested that they are more likely to fund the operations company as real estate is seen as risky.
5
Independent schools need to register with the Provincial Education Departments (PEDs) after undergoing inspection.
Key Discussion Questions
• How does the environment hinder or facilitate business for edupreneurs?
• What is the extent of government support?
• What policies have been successful in incentivising edupreneurship?
• Should there be a government framework for social enterprises to reduce the complexity of hybrid legal
structures?
• Does the school registration and UMALUSI accreditation process take too long?
• Subsidies. Are policy reforms necessary? Is legal and policy assistance available through bodies like ISASA?
9. 5
cases and the processes for this are slow and cumbersome. It is understood that NECT is considering the role of contract
and independent schools as part of a suite of solutions, but this is at very initial stages.
Recommendations
1. Streamline the registration process for new independent schools, perhaps using ISASA as a voice, or building
better linkages to government directly.
2. Organisations such as the Innovation Hub, as an agency of the Gauteng Provincial Government, are in a good
position to find solutions and package opportunities for government to minimise barriers to access for EdTech
entrepreneurs. This involves understanding what government needs and then presenting a suite of options to
the decision-makers in the relevant department. A careful vetting process is required to avoid one poorly
conceived concept weakening the group.
3. Improve existing, and encourage more government-funded pilots. Government is interested only in solutions
that can be taken to scale, but it is very difficult for edupreneurs to get the access, permission or funding to run
pilots at any sort of scale. Encouraging government to fund more pilots at suitable levels of scale to test efficacy
early should be a priority.
Infrastructure and Enabling Technologies
Infrastructure
For LFPS, there are pros and cons to owning versus renting infrastructure. The type of funder and the location of the
schools also influence the entrepreneur’s decision. For many funders who are looking principally to back an
entrepreneur and a school concept, having to consider the additional costs and exposure of including buildings into their
funding model, i.e. a property portfolio, is unappealing – not least as much of the investment will be tied up in
infrastructure with little available for operating costs. Although owning property allows one to build up a balance sheet,
renting allows for preservation of cash flow. That said, the option to rent is not readily available to LFPS in townships, as
there are few buildings that are suitable. Existing government buildings in places like Soweto provide good potential
options, but are hard to come by and slow to come up for tender. A lack of infrastructure in certain poorer areas has also
perpetuated a trend towards LFPS catering for emerging middle class areas. Unless there is a direct government or other
drive to free up existing buildings for schools, it will be very hard for the very low fee market to grow.
A number of entrepreneurs are exploring modular container schools as an alternative approach to overcoming the lack
of appropriate infrastructure. In one example, which leverages a corporate CSI contribution and cross-subsidisation from
a donor, the containers are used as classrooms by day and a movie theatre by night. While useful for a school in a small
community, the capital injection required is still large, and the main savings comes from the de-risked construction time
compared to bricks and mortar. Furthermore, there is often a negative community perception of this type of
Key Discussion Questions
• What are the infrastructure and cost-saving technology needs and challenges of LFPS?
• Is infrastructure readily available, and if not, what are the solutions (government or private sector)?
• Going digital – can Edtech edupreneurs serve challenges of LFPS? What is the interplay with the school
structure, curriculum and content?
• Blended learning. Are optimal standards emerging?
10. 6
infrastructure for a school6
and the nature of CSI funding limits prospects for scale. Hence, the appropriateness of this,
and other types of cost saving infrastructure, depends heavily on the intended purpose.
Recommendations
1. Encourage government to speed up the leasing of unused buildings in township communities.
2. CSI might be better orientated to support school projects that can have alternative uses7
.
Enabling Technologies for LFPS
LFPS in South Africa make up a tiny percentage of the market and therefore the needs they have in terms of specific
enabling technology is niche and very specialized. As such, the types of enabling technology (both hardware and
software) that many of these schools are seeking, is not readily available in South Africa. The discussion revealed that the
types of education technology useful for LFPS is limited in South Africa as many of these school models need to rely on a
combination of cloud based solutions (decreasing reliance on expensive hardware), blended learning models (to
decrease the reliance on human capital) and smart technology that can generate usable data in real time. This is not
readily available in South Africa and is therefore generally imported. Local products tend to be designed to meet current
South African problems. As a result the products available are generally content focused, and not particularly adaptive8
.
Software that reports data is hard to come by, and the local market is too small to incentivise local developers to develop
bespoke products. For LFPS in peri-urban or township environments, WIFI costs are still a barrier, and offline instruction
software is used.
Recommendations
1. Edupreneurs should approach universities to exploit existing opportunities for collaboration. In particular,
utilise existing Research & Development (R&D) to fund partnerships to develop appropriate software solutions
for the market.
2. More risk capital is needed for EdTech to encourage innovation and disruptive technology for this nascent
market.
3. Consider open source platforms to list challenges and find solutions9
Markets and Demand
The market size for independent schools was assessed in a recent Centre for Development and Enterprise (CDE) report
and was found to be larger than expected. In the areas included in the study, up to 30 per cent of schools were private10
,
albeit often unregistered. However, in a market dominated by public school providers, market testing and piloting, as
6
Containers may also prove problematic during inspections.
7 According to a funder, creating alternative uses for buildings de-risks the investment and makes it more attractive to financiers.
8
One LFPS said they are looking for a Learner Management System (LMS) that is integrated with a Financial Management system, to reduce
administration costs and send automated information to parents.
9
See the Research Institute for Innovation and Sustainability’s Solex platform.
10 See Affordable Private Schools in South Africa (CDE, 2015).
Key Discussion Questions
• What best practices exist to gauge market demand for innovative education models?
• What are the challenges of targeting low income markets e.g. market building and field testing?
• What impediments exist to unlocking public sector markets?
11. 7
well as branding and awareness are areas that edupreneurs are currently trying to navigate. The session revealed
learnings from the experiences of LFPS. In terms of market testing, one LFPS operating in a township conducted a pilot by
hosting holiday camps. Initially parents were not charged a fee, and meals and transport were free. It was found that
attrition was high and the impact hard to measure. Once a small fee was charged, parents held children accountable and
attendance was higher. This revealed a willingness to pay for quality education. Finding the appropriate pay point
continues to be done by trial and error and at least one school model uses a sliding scale, according to an Ability to Pay
assessment. This particular LFPS calculates that with government subsidies (up to 60 per cent of the government rate per
child for the poorest quintile schools), and attaining targeted payment levels, it can become profitable.11
The importance
of an appropriate Financial Management System (FMS) can help with not only fee collection and monitoring by sending
automated responses to parents regarding fees, but also on attendance, grades and achievements, with the added
benefit of encouraging parental involvement.
All the LFPS participants stressed that education and aspiration are closely linked and therefore in all the models selling a
value proposition (and brand) was more important than stressing the affordability of the school. Word of mouth is very
important in building the school’s reputation for quality and often things that may seem less obvious – such as the school
uniforms or appearance of school buildings – are what parents associate with quality. LFPS felt it was better to sell at an
appropriate price point, and not explicitly as a low fee school.
Recommendations
1. Create a platform for LFPS to share experiences and work with the system to change the rhetoric on what
quality education entails. Demonstrate to parents the value of educational excellence, through media and other
market influencing mechanisms.
The Road to Scale: Human Capital and Skills
For LFPS, human capital was cited as the number one factor that would determine their success and ability to scale.12
The schools were unanimous in the view that there is a lack of teaching and other educational management skills in
South Africa. This despite the fact that South African teachers are amongst the highest paid in the world. Technology
offers a potential solution to low quality teachers. Many EdTech entrepreneurs are developing technology to break the
dependency on human capital. LFPS are using technology to lower human capital costs, and are developing their own
innovative professional development models to use with programs that provide technical content. In most instances,
each LFPS is developing its own model in-house, but efficiencies might be achieved by sharing or outsourcing this
development process.
11
This subsidy is relatively high compared to some countries with no subsidy, however, countries like Chile and Pakistan pay up to 90%.
12
One school claimed that owing to a lack of skills, it was only able to hire 20 employees out of around 500 applicants. Growth beyond three of
four schools would not be easily possible by ‘hiring in’ under existing competitive processes.
Key Discussion Questions
• What are the gaps in the lifecycle of edupreneurs from concept phase to scale?
• What are the roles of academia, incubators and accelerators? Is there access to entrepreneurial education,
mentorship, and talent?
• Is the lack of human capital a barrier to scale and what teacher training programs are developing?
• What collaborative opportunities exist and how can the ecosystem better support these practices?
12. 8
One solution being explored to build the skills base is to develop apprenticeship models. These models reduce the
pedagogical requirements of qualified teachers, and equip people with fewer skills and with lower salary expectations,
but who have a range of other aptitudes and skills such as leadership, to become coaches and facilitate the use of
content programs effectively. Identifying these types of candidates is difficult and takes time, but key characteristics
which are sought include: a desire for personal development, an ability to understand the pedagogy and content
mastery. A shift may be required in the way teachers think about their profession. One model advocates for providing a
rigorous structure (involving a clear competencies framework and career pathways), practice in the form of video lessons
and coaching, and expert support. If apprenticeships are the answer, they too need to be scalable. One consideration is
that, given the general requirements across industries for some of these more generic skills, perhaps a portion of the
training could be offered across industries, with schools facilitating the specialised technical training required.
Recommendations
1. Internal knowledge sharing platforms around teacher development programs that could produce a toolkit for
the duplication of successful models to achieve Economies of Scale.
2. Further research and exploration into apprenticeship models to scale.
Ideas for Action
The final session produced suggestions by the group for ANDE and others participants to take forward after the
roundtable. ANDE, in partnership with members Dalberg Global Development Advisors and The Innovation Hub, is
pursuing the following three Ideas for Action:
1. An Edu-capital map or database to gain an understanding of what funding and requirements are available at
different growth phases of enterprises. This aims to bridge the divide between funders and edupreneurs.
Dalberg Global Development Advisors will be leading on the project.
2. Showcasing opportunity or ‘Fashion Parade’ to foster and expose locally relevant, globally competitive
entrepreneurs to a) access to customer/markets or b) access to advice, bundling or endorsement opportunities.
The Innovation Hub is currently vetting and compiling a list of edupreneurs (excluding schools) to present to
key access partners including the government and members of the CSI community at an ANDE supported event
in June 2015.
3. Influencing mechanism. An ANDE-led closed breakfast session with influential investors and key corporate
decision-makers to share ideas on the types of capital needs and investment opportunities in this sector.
Furthermore, the roundtable highlighted the importance of idea sharing and the opportunity for the edupreneurs to
continue to do so, through an independent platform to learn from one another and strengthen their unified voice.
Key Discussion Question
• What actionable project/s can members of the group collaboratively design for ANDE or participants to take
forward to help create a more supportive ecosystem for edupreneurs?
13. 9
Conclusion
There is growing activity in the edupreneurship space in South Africa. However, while the independent school sector in
South Africa is growing, the market for high quality LFPS is small, and will remain so unless key funding (risk and patient
capital) and support such as better policy implementation and access to infrastructure in township geographies is
prioritised. For this to occur, a stakeholder approach is needed for support players in the ecosystem to fully comprehend
the benefits, challenges and opportunities that are available.
For EdTech entrepreneurs, access to markets is crucial, and for this, government-paid pilots that package opportunities
in a suite of options that meet the market’s needs, can open up this customer base. Additional unexplored opportunities
may exist for local EdTech entrepreneurs to serve the technology needs of LFPS. However, EdTech entrepreneurs need
to understand the requirements of LFPS and need risk capital to develop solutions and software that not only reduce
human capital costs, but also generate usable data.
Human capital remains the biggest challenge to scale for LFPS. All schools that participated in the roundtable are
innovating in this area, developing their own teacher training and professional development programs. Apprenticeship
models that train coaches (rather than qualified teachers) to instruct learners to use technology content platforms were
considered as a solution to scale and research on best practice and cross-industry scalable models should be further
explored.
Finally, the roundtable demonstrated that there are examples of LFPS in South Africa that are innovative, disruptive and
scalable. Such schools have the potential to provide cheaper, more effective solutions that can provide an alternative to
government in providing high quality education to all. Given the right kinds of support, such models have the potential to
positively impact education outcomes in South Africa.
14. 10
APPENDIX
Participant list
1. Jay Kloppenberg, African School for Excellence (ASE)
2. Nonhlanhla Masina, African School for Excellence (ASE)
3. Bridget Fury, ANDE South Africa (lead facilitator)
4. Lisa van Eck, ANDE South Africa
5. Erik Pretorius, Awethu Project
6. Owen Muzambi, Awethu Schools Programme
7. Nontobeko Sibisi, Bhubesikazi Investment Holdings
8. Vernon Mukasa-Batende, Bhubesikazi Investment Holdings
9. Jeremy Lang, Business Partners Limited
10. Tessa Yeowart, Centre for Development and Enterprise (CDE)
11. Errol Radebe, City Year South Africa
12. Devang Vussonji, Dalberg Global Development Advisors
13. Liesbet Peeters, D-Capital Partners
14. Faizal Ladha, Digiram Digital Learning
15. Ryan Harrison, eAdvance SPARK Schools
16. Stacey Brewer, eAdvance SPARK Schools
17. Andrew Bonfiglio, Emzingo Group
18. Chris MacLean, Emzingo Group
19. Nizenande Machi, Emzingo Group
20. Mignon Hardie, FunDza Literacy Trust
21. Stuart Bartlett, Industrial Development Corporation (IDC)
22. Vineet Bewtra, Omidyar Network
23. Ali Sweet, Pioneer Academies
24. Chinezi Chijioke, Pioneer Academies
25. Sipho Marala, Small Enterprise Finance Agency (SEFA)
26. Melanie Smuts, Streetlight Schools
27. Rosie Chirongoma, Symphonia for South Africa
28. Gary Bannatyne, The Innovation Hub
29. McLean Sibanda, The Innovation Hub
30. Kershni Maharaj, Raizcorp
31. Nicholas Glicher, Thomson Reuters Foundation
32. David van der Walt, VizierMaths
33. Chimene Chetty, WITS Business School