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Integrated engineering supply chains require small and large firms

25th January 2019

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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Large firms are key to transforming the South African engineering sector as part of a business ecosystem that includes smaller, agile and large entities driving industry to be more innovative, diverse and responsive during fluid and volatile times, says multinational engineering consultancy Aurecon Advisory Africa managing principal Dr Stephan Jooste.

Small enterprises, black-owned businesses and agile entities of empowered engineers and entrepreneurs are critical to the transformation and ongoing success of the engineering industry in South Africa as drivers for a transformed, sustainable South Africa. The country should look at ways of investing in what financial magazine Forbes calls the “small giants” of the future, he says.

However, the role that large engineering consulting firms can play in enabling and developing leaders of small enterprises and the enterprises themselves is equally important.

“As we have seen within our organisation, it is possible to have small and large firms functioning within a symbiotic business ecosystem. “Small businesses can survive and be strengthened in partnership with larger firms if the collective commitment is to see the industry as a whole become more innovative, more diverse and more responsive to these fluid and highly volatile times,” he says.

The current economic and political climate is insufficient to support the start-up and growth of small enterprises. Most new small business ventures are formed out of necessity and, therefore, are unable to generate the well-resourced momentum that would catalyse growth. As ‘subsistence enterprises’ to support individual households, these small, medium-sized and microenterprises (SMMEs) lack the networks, skills and funding to become sustainable and profitable, explains Jooste.

“If we want to see innovation soar among a new diverse workforce of empowered entrepreneurs, we have to ask what government, business, academia, [and the] public and private sectors can do to strengthen SMME capacity.”

“There is a stockpile of knowledge, experience and resources within Aurecon on which SMMEs can draw. “A good number of South Africa’s engineering SMME companies were trained and professionally registered in Aurecon before venturing out on their own. Through an aggressive partnership programme Aurecon aims to support and ensure their sustainability in the long term,” he says.

“This is not altruism; this commitment to cooperative engagement within the engineering industry has proven to be good for business, as big firms use their resources to develop and release talent into the field, which continually extends their networks of shared value.”

Smaller firms offer the agility that would prompt bigger firms to pull them into a project, while large enterprises with strong balance sheets, insurance coverage and bid bond capacity enable smaller firms to lead larger, complex projects, which small firms have no way of securing on their own.

Large firms need to apply resources and energy to not only develop the next generation to raise and send out the best into new uncharted fields of entrepreneurship but also retain good talent and continually invest in their career growth.

The creation of five-million new jobs by 2020 translates into a 40% increase in jobs over the next decade, or eight times higher than the average rate over the past ten years. Start-ups and SMMEs will be part of the solution to the unemployment pandemic, says Jooste.

“However, large firms are poised to provide resources for brilliant, brave ideas in partnership with multiple public and private stakeholders, and they carry the market credibility needed to generate new, sustainable ventures for the industry at large that can fuel growth and innovative momentum in engineering.

“As a large firm, Aurecon sees the significant role that it can play in bolstering the Fourth Industrial Revolution African economy, which will be rich in diversity and empowered innovation,” he concludes.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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