Small Business Development Minister Lindiwe Zulu
The entrepreneurial climate in South Africa “is dire”, Small Business Development Minister Lindiwe Zulu lamented on Monday, noting that fewer than 14% of South Africans were planning to start a business in the coming three years.
However, she also unveiled a target for raising the gross domestic product (GDP) contribution of small, medium-sized and micro enterprises (SMMEs) to between 60% and 80% over the coming 15 years – the sector’s current GDP contribution was around 35%, which was well below the global average of 45%.
Speaking at the launch of Startup Nations South Africa, Zulu quoted from the Global Entrepreneurship Monitor, which had measured South Africa’s entrepreneurship levels to be at the weakest in three years. “Compared with the rest of Africa and the world, South Africa is said to have the lowest entrepreneurship activity. This means our country is yet to see the true value and benefits of SMMEs.”
Government was committed to improving the prospects for SMMEs by reducing red tap and refining the financial and nonfinancial support systems for entrepreneurs. Particular attention was also being given to slow business-registration processes, late payments by government departments to SMMEs, as well as licensing and taxation constraints.
However, no major policy overhauls were envisaged, with the focus instead being on implementing existing policies, particularly those designed to accelerate the development of black-owned enterprises and black industrialists.
“I can assert without any fear of contradiction that what we need is effective and practical implementation of existing policies and strategies,” Zulu argued, adding that SMMEs needed to become the backbone of the economy and the main drivers of economic growth, poverty reduction and job creation.
She lauded the launch of Startup Nations South Africa, which was the first African chapter of a global network that is active in 35 countries, including the UK, Chile, Malaysia, China, Norway, Australia, Brazil, Vietnam and Korea.
The founding domestic partners included the Industrial Development Corporation (IDC), The Innovation Hub and the Wits Business School’s Centre for Entrepreneurship, which committed the local chapter to focusing on “collaborative” interventions aimed at creating an enabling environment for innovation and entrepreneurship.
IDC CEO Geoffrey Qhena said that the initiative would offer entrepreneurs better visibility of growth opportunities, particularly in the green-economy and infrastructure environments. He also said that it would provide a platform for the sharing of information about the resources, sponsors and potential partnerships available to support entrepreneurs.
The Innovation Hub CEO Mclean Sibanda added that the South Africa chapter would also have access to the global research and knowledge resources of the Kauffman Foundation, which has a strong focus on education and entrepreneurship.
“We now call on the private sector to join us in strengthening this collaboration so we can build a robust, vibrant and sustainable entrepreneurship ecosystem in South Africa,” Sibanda said.