Opportunities for small businesses in South Africa 20 Jan 2012
Posted by Ebrahim-Khalil Hassen | October 19, 2011
Tim Ferris weaves a mixture of a self-promotional story and business strategies with the promise of working four hours a week. He counterpoises the four-hour workweek, with the forty hour workweek. In so doing, he unwittingly raises the question – Can entrepreneurial activity still contribute to economic growth and job creation?
The American distinction between Main Street (representing small business) and Wall Street (representing financiers and investors) offers a way to understand this question. It is a theme being played out in the Occupy Wall street, with many local campaigns being undertaken. In the wake of the financial crises, we have justifiably criticised Wall Street for making easy money, for trading nothing (i.e. paper) and for screwing up the world. Main Street in turn is the saviour, the engine of innovation and job creation. Yet, it is possible to create businesses that mimic the worst traits of Wall Street – no jobs, no real products, and no innovation – and dress it up as Main Street. This is my reading of The Four Hour Workweek – a manifesto to create personal gains, without the multipliers (e.g. economic growth, job creation) associated with small business.
Tim Ferris provides the scope for his book as follows:
“The vast majority of people will never find a job that can be an unending source of fulfillment, so that is not the goal here; to free time and automate income is.”
Posted by Staff Reporter | August 26, 2011
Male and female employment in South Africa using 2011 2nd Quarter Labour Force Survey data.
Posted by Ebrahim-Khalil Hassen | June 28, 2011
Arguing that the the “ticking time bomb” metaphor may lull us into a sense of complacency with regards to youth unemployment.
Posted by Ebrahim-Khalil Hassen | June 9, 2011
A problem well-defined is a problem half solved. The expectations from the diagnostic report of the National Planning Commission (NPC) are that it would define the problems facing our society in a way that stimulates discussion, and through a process unites us in defining the problem and the plan to resolve them. In that spirit,I am arguing that the section on enterprise development in the Diagnostic Report will require a recognition of realities of uneven market power in South Africa as a foundation to define the problem and develop solutions. At the core is that the NPC must take a stance to back the “little guy” in the economy, and all people excluded from the economy. It should do this initially through defining the problem, however it has not yet embedded in the way the NPC approaches the definition of the problems we face.
The NPC provides a useful way of describing the surface manifestations of low levels of entrepreneurial activity in South Africa. It notes in this regard that:
- Small business contributes 40% of GDP and employs 60% of workers in South Africa
- Notes that only 2% of adult population are involved in start-up activity
- Highlights that South Africa has relatively low levels of entrepreneurial activity
It then summarises the policy response as follows:
Factors that hinder the development of Small, medium and micro enterprises (SMMEs) include inappropriate regulation, lack of access to finance and external factors such as crime. Furthermore, because they have supply chains across the country, large firms are able to sell their products at prices smaller companies cannot match. A strategy to promote SMMEs cannot take hold without addressing the challenge of accessing established supply chains.
Minister Pravin Gordhan has launched the Jobs Fund, first mooted in President Jacob Zuma’s State of the Nation Address. The fund targets 150 000 jobs I three years and has three unique characteristics:
- Co-finance projects with the potential of job creation, supporting both existing and new programmes. The fund thus seeks to gear additional funding into the programme
- Grants instead of loans – Importantly, the funds provide grants for projects, signalling a shift in government to directly fund projects through grants and supporting venture capital. There will be no repayment or financial return sought, although funds that are not spent for the purpose for which they were allocated, or are misappropriated, will be reclaimed by the National Treasury.
- Supporting existing and new programmes – The fund is designed to provide for a range of different partnerships, including for existing government programmes and new programmes.
Details on the application forms and criteria can be found at http://www.jobsfund.org.za/
The fund has a wide ambit, covering four areas: