Role confirmed for local green entrepreneurs in economic recovery, just transition

2nd June 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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There are a number of opportunities for local green entrepreneurs in South Africa and they can play a pivotal role in the country’s economic recovery and just energy transition; however, it is imperative that challenges in the ecosystem be addressed and for support for participants to be bolstered.

This was indicated by speakers during economic research institute Trade & Industrial Policy Strategies’ webinar, titled “Unpacking the Green Economy Ecosystem: Business Development Support Services for Local Green Entrepreneurs”, on June 1.

European Union (EU) Delegation to South Africa development policy adviser Ulrik Jorgensen said there was a need for policy reform to create an enabling environment.

He emphasised that government budgets must follow the energy transition and recovery.

Moreover, Jorgensen said public and private financing from the EU would support South Africa’s energy transition and economic recovery.

Also, he highlighted the need for the transition to be knowledge-based.

Lastly, Jorgensen said there should be diplomacy efforts to create awareness and to support reform and recovery.

Ecosystem Development for Small Enterprise (EDSE) programme team leader Nigel Gwynne-Evans, meanwhile, outlined the challenges facing small, medium-sized and microenterprises (SMMEs) in the space.

This included a considerable amount of fragmentation in approach, with many different initiatives available to SMMEs from different entities.

He said the EDSE was working with the South African government on a proposed pathway to an improved set of strategies for the government, and to help it to have a more consolidated approach.

Moreover, he said this approach requires recognition of the importance of intermediaries across the system.

He also encouraged partnerships, especially with the private sector, saying the EDSE was aware of government limitations from a fiscal perspective.

He highlighted that there has been progress in aspects of tackling rep tape, with government involved in this over the past two to three years, and aiming to tackle regulatory impediments that hold back SMMEs within the green economy.  

He also called for support for SMMEs across the board, rather than a specific focus on a particular value chain.

Grant-making entity Youth Bridge Trust acting executive director Ntsiki Gumbe also emphasised the importance of preventing fragmentation and working in silos in the green economy system.

She said there was a need for a cohesive environment and for peer learning.

Gumbe noted that it was important for participants to recognise that they were not competitors, but were each performing a specific role in the larger value chain.

Some challenges facing entrepreneurs in the green economy that the organisation had identified included a lack of awareness and market readiness, Gumbe said.

She emphasised that there was a need, before the product or service was even brought to market, to begin educating the market about the issues that this aimed to address, with education to start in communities.

Also, the cost of being first to market is another challenge.

Moreover, she reiterated Gwynne-Evans’ point around the regulatory environment.

While laws are necessary to regulate the space, she said these were sometimes too complex and time-consuming for entrepreneurs and, therefore, welcomed government’s efforts to ease red tape.

She emphasised that the sector at large must address this to enable an environment that is conducive for young entrepreneurs to thrive.

SUPPORT SYSTEMS

The webinar also afforded a range of ecosystem builders the opportunity to expand on initiatives that provide enhanced business development support services to assist SMMEs. 

Green tech programme Future Females cofounder and CEO Lauren Dallas informed that the entity aimed to solve three main problems within the space.

Firstly, she said that, with unemployment at record levels, women were being forced into ‘necessary entrepreneurship’ without the business skills or green economy context to be successful.

Secondly, female green economy enterprises were not getting access to funding, partnership or trade opportunities, she said.

Lastly, funders did not have a strong pipeline of female-led green economy businesses to support, Dallas noted.

She noted Future Females’ core programme as the Future Females Business School, a 12-week virtual accelerator that supported female entrepreneurs, with a core focus on those in the green economy.

She acclaimed that, thus far, over 2 300 entrepreneurs had graduated from this programme, making it one of the largest accelerators in the world.

Moreover, she highlighted that recent cohorts had seen a 219% revenue uplift as a result of this programme, and a 68% increase in full-time employees hired.

Future Females also undertakes additional work in the green economy space, for example, an export-trade programme across six Southern African countries, including South Africa. This programme supports female-led SMMEs to become ‘trade-ready’ and begin trading their products internationally.

Dallas emphasised that Future Female was aiming to accelerate the support of female-led SMMEs in the green economy space in South Africa, driving recovery from a grassroots level.

Another entity presenting was Indalo Inclusive SA, with director and head of operations Rest Kanju outlining its support to SMMEs during Covid-19 and adaptation to climate change measures.

He said the company’s response to the pandemic was to provide an e-learning platform, a Covid-19 relief fund and to host a symposium.

He outlined a number of measures that were required for both SMME development and policy, owing to the impact of Covid-19.

In terms of SMME development, he said this included the need for technology leapfrogging and integration, for this to be used as an enabler for SMME development. 

Moreover, he said accreditation and quality assurance of services were critical.

Also, Kanju noted that intermediary organisations must be innovative and provide a value-add.

In terms of policy shifts, he emphasised that cooperative governance must be practiced, that the fiscal policy must be more adaptive and responsive, and that the just transition must be at the core and deliberate in policy and implementation.

Also, he noted the need for alignment and effective implementation of the Sustainable Development Goals, as well as support for greener, clear and resilient innovations.

OPPORTUNITY

Meanwhile, venture capital firm Anza Capital CEO Audrey Verhaeghe highlighted that there was an opportunity of $42-trillion in the early-stage funding landscape.

She pointed out that Africa has the world’s highest entrepreneurship rate at 22%; however, start-ups lack the growth capital that can help them grow.

Verhaeghe said the venture capital ecosystem was beginning to recognise the value of investing in startups, with growing investor interest.

She emphasised that there were many sectors waiting to be disrupted, including energy, financial, agricultural, smart city, logistics, education, health and entertainment.

Anza is an early stage venture fund that invests into scalable technology-driven startups on the continent.

Verhaeghe acclaimed that the newly launched fund completed its first investment on May 31.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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