Small Business and Entrepreneurship

Small business holds the promise of creating jobs and entrepreneurs create the opportunities that employ more people. This promise will be a reality when significant contextual changes and policy shifts occur.

The Little Guy and the National Planning Commission

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Cover of the diagnostic report by the NPC. Will the “little guy” find the links?
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.
 

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Treasury launches Jobs Fund

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The Jobs Fund - National Treasury funds, DBSA implements

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:
 

  1. 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
  2. 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.
  3. 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:

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Is Cape Town or Johannesburg the best metropolitan government in South Africa?

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Political parties have been arguing that the city they govern is the best run in South Africa. A cold hard look at available data shows that there is not much difference between Johannesburg and Cape Town, who occupy the first or second spot in most indices. There is thus no definitive answer to the question, as to which metropolitan municipal government is the best, however voters should be circumspect in assessing the claims of political parties. The argument that Cape Town is exceptional however does not have a solid backing from the data reviewed.

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National Planning Commission Goes Facebook, excludes most South Africans

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South Africans given first opportunity to input on the development of the National Plan, but only for internet users.
On Zapreneur, I have argued that the national planning process must be made more open for the National Planning Commission to meet its goals. While it is presumptuous to indicate that the article had an influence, The Presidency announced that it will be having NPC Jam Session running for five days starting on the 28 March 2011.

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