The South African government through the Department of Small Business Development (DBSD) will host a National SMME and Cooperatives Summit in November. The DSBD has chosen 13 to 15 November to coincide with Global Entrepreneurship Week. Leveraging the global week of focus on entrepreneurship and SMMEs makes sense, but it also reminds us that in South Africa, we are playing catch-up to the rest of the world.
SMMEs, cooperatives, and other entrepreneur-driven enterprises have been the backbone of economic growth and job creation for decades now in other parts of the world, even as our own economy developed towards greater concentration and cartel formation. This broad, established economic trend has only been given impetus by the emergence of the digital economy, which has enabled small enterprises, even micro ones, to access previously inaccessible opportunities in finance, technology, global market access and skills, all of which have previously been open only to the largest and most established companies.
Our unemployment rate stands at 38% today (by the expanded definition) in large part because this economy has been sluggish in developing and encouraging entrepreneurship, and in creating the policies and systems necessary to catapult them into globally competitive and successful creators of economic value. It’s not like our government and our society are unaware of the importance of small business development as the surest way to grow our economy and pull millions out of poverty and dependence.
The promulgation of the very first White Paper on the National Strategy for the Development and Promotion of Small Business in South Africa dates back to 1995. But since then progress has been at a snail’s pace, and everything we’ve managed to achieve in terms of policy, regulation, and support has been largely ad-hoc.
Following the 1995 White Paper, the government only adopted the Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises a decade later, in 2005. And this year, a full 17 years later, the relatively new DSBD is working on passing their National Integrated Small Enterprise Development Masterplan. Before the current term of government, South Africa did not even have a government department dedicated to the development and promotion of small businesses.
As a country, we need to do better. It is no exaggeration to say that without a coherent, well-funded, and well-implemented national SMME and start-up strategy, we cannot achieve the growth and employment rates we need to move up the global economic and development ladder.
The renewed impetus we are seeing in this area since the creation of the DSBD in 2019 is encouraging, and it seems the government is determined finally to weave small business development into the very centre of its economic recovery and revival plans. President Cyril Ramaphosa has appointed two young, capable, women to the portfolio, and both have made great strides in moving the policy landscape forward and bringing us into the 21st-century approach to small enterprise development.
It is best for the government and other stakeholders to also recall that the support of small enterprise can catalyse other critical areas of opportunity such as localisation, making it the starting point of a ‘golden thread’ of developmental initiatives that can change this economy and this country. For instance, the government’s focus on reviving the township economy can only benefit from the summit. The township economy is nothing if not a collection of SMME and cooperative enterprises all in need of a hand-up to reach their full potential. The same can be said of the ongoing need for South Africa to build a functional ecosystem for the funding and non-financial support of the start-up sector.
This year’s summit can be a game-changer for the state, the economy, entrepreneurs, and our country generally. But for that to happen, and be sustained over time, the government must genuinely reach out to all stakeholders – business owners, small businesses, the media, policy researchers, communities, etc. – for a genuine social partnership. May they have the foresight and vision to do just that, for all our sakes.