A small business owner sells food at a stall at Market on Main in Johannesburg. (Image: Brand South Africa)
• It is up to every one of us to sell South Africa
• Index to boost women’s rights
• Liberian entrepreneurs build South African networks
• South Africa in ‘sweet spot’ for growth
• Entrepreneurship key to jobs for youth
South Africa’s recent establishment of a dedicated Ministry of Small Business Development reflects a growing national and global recognition that entrepreneurs and small enterprises are powerful drivers of economic growth and job creation. The USA is one example of a country where prosperity has been built over decades on a strong foundation of small business combined with innovative, industry-changing entrepreneurship. As South Africa looks to stimulate its economic growth and create new businesses and jobs, the time has never been better to support small enterprises and encourage passionate, ambitious entrepreneurs looking to make a difference to the country and beyond. However, there is no doubt that the newly appointed Minister for this portfolio, Lindiwe Zulu, will have some significant challenges to address in the short term if small business development and entrepreneurship is to really thrive and grow to its full potential in South Africa.
The establishment of a Ministry of Small Business at this current time takes cognizance of the sheer scale of small businesses currently operating in the country, estimated to be around the 2 million mark and representing around 98% of the total number of businesses in existence, yet recognizes that the vast majority of these enterprises are survivalist in nature. If these businesses and the others that will follow in their footsteps are not just to survive, but are to grow and thrive, creating jobs and revenues which will benefit the country as a whole, then much more support needs to be provided. Even more importantly, a positive entrepreneurial culture needs to be developed in South Africa that is embraced and proactively supported at all levels of society.
If the ambitious National Development Plan is to achieve its lofty goals of creating 11-million jobs by 2030, then focused interventions on the part of government and the business sector as a whole in the country, need to recognize that small business development and entrepreneurship offer the keys to success, just as they have done in the most powerful nations in the developed and developing world.
However, the creation of a new dedicated ministry to support small business and entrepreneurial development is only one part of the exercise if real cultural change is to happen. Government also needs to apply a similar diagnostic approach, as it did when developing the National Development Plan, to get at the root of why small businesses in South Africa have not to date fuelled the economy to the degree its counterparts globally have, in for example the fellow Brics member countries of China, India and Brazil.
The ministry needs to take a new, proactive and strategic approach to ensuring that the necessary support is provided to stimulate the growth and development of the previously underserved small business owners of this country. Black entrepreneurs and small business owners need to be developed beyond just being Enterprise Development and Preferential Procurement beneficiaries, but instead supported in their efforts to be key contributors of this economy and the creators of much needed new jobs.
The new ministry will also need to seamlessly synchronise all the critical stakeholders in the small business development eco-system, including corporate big business, citizens, civic organisations, public sector, policy makers, incubators, funding institutions and academia, to begin to create a genuinely entrepreneurial culture in the country. If this is achieved, then the benefits will be tangibly felt in so many ways, not just in the creation of jobs, but also in the ability to access new and exciting markets, the creation of new products and services, the development of new technologies, and the positioning of South Africa as a leader in innovation and entrepreneurship.
There is no doubt that this new Ministry of Small Business Development has the potential to positively address the considerable socioeconomic challenges that exist in the country and which are holding back real economic growth and development, such as crippling unemployment, inequality and extreme poverty in so many communities across the country.
To succeed, it will need to show real and innovative leadership, accountability and a genuine understanding of what makes small businesses and entrepreneurs tick – after all, what makes them unique and ultimately successful are the very things that the country needs to harness if it is to achieve its goals. There needs to be a real respect for the hard work and sheer tenacity and determination displayed by entrepreneurs and small business owners, and a real understanding of the contribution they can make to the realization of the National Development Plan’s key objectives. If Minister Lindiwe Zulu and those assigned to the new Ministry of Small Business Development rise to the challenge and support the building of an entrepreneurial nation that is the flagship of the African continent, then they will make a real difference in the creation of the 11 million jobs and reducing the unemployment statistics that loom as a spectre over the country daily.
The South African Black Entrepreneurs Forum welcomes this dedicated new Ministry of Small Business Development and will stand to support its progressive endeavours.
Matsi Modise is the National Executive Director of the South African Black Entrepreneurs Forum