Volkswagen Group South Africa (VWSA) has entered into a partnership with business incubator specialist Raizcorp to boost the development of small businesses in Nelson Mandela Bay, in the Eastern Cape.
VWSA’s investment of R5-million a year over an initial three-year period will train up to 16 local entrepreneurs.
Nine beneficiaries are already undergoing training at the site, with more to follow.
Raizcorp will manage the project’s business support centre on a day-to-day basis.
The company offers a three-year entrepreneurial development programme to beneficiaries, who undergo a rigorous selection process.
It provides Council of Higher Education accredited learning modules (NQF level 5 or diploma equivalent), entrepreneurial mentorship and all the systems and resources to grow small companies into profitable businesses.
Raizcorp supports more than 230 businesses nationally, and has managed to increase the turnover and profitability of over 86% of the companies participating in and complying with its development programme.
The Eastern Cape launch marks the seventh centre of its kind in the country.
“With an 11-year track record of success in entrepreneurship development, VWSA is pleased to partner with Raizcorp on this project,” says VWSA MD David Powels.
“The project will contribute to local economic development by creating local business leaders who are vibrant, competent and motivated entrepreneurs.
“They, in turn, will grow companies which create new jobs and enhance social inclusion.
“On average, successful entrepreneurial businesses create between five and 20 new jobs per business over a five-year period. This will help to reduce the high unemployment rate in Nelson Mandela Bay, where good jobs are desperately needed,” notes Powels.
Business incubators have a track record of growing successful entrepreneurial businesses, and reversing the failure rate of entrepreneurial start-ups, he adds.
In South Africa there are between 30 and 40 recognised incubator projects, whereas Brazil has more than 400 – where the unemployment rate is 6.3%, compared with 25% in South Africa.
Volkswagen’s corporate social investment (CSI) programme has a strong focus on enterprise development.
“The key principles guiding us in deciding which projects to support are that they are holistic, comprehensive and sustainable,” says Powels.
“Furthermore, it is essential that the projects we support are measurable, able to create a deep and abiding legacy while, at the same time, embodying Volkswagen’s values. This has now evolved into a wider strategic focus encompassing the community, the environment and relevant stakeholders as we strive to become ‘a company with meaning and impact.”
VWSA also encourages the participation of its employees in its CSI initiatives, and has since 2005 been part of the Volkswagen Group’s international programme ‘One Hour for the Future’, which sees Volkswagen employees donate the equivalent of one hour of their monthly salary to a good cause.