"Invest in purposeful enterprise creation" says Tshepo Phakathi
We must err on the side of caution as we seek to encourage people to become more entrepreneurial. Business is not an end in itself, it is merely a conduit to deliver value to the market and create jobs. This is to say; our venturing undertakings must be directed towards job intensive and/or growth driving activities.
The narrative that small and medium enterprises (SMEs) will drive job growth in South Africa is missing an inalienable component. That is, a condition, that such SMEs must survive the short-term and grow in the long-run.That we expect people who don’t possess the aptitudes needed to cope with labour market demands to turnaround and run SMEs in such a complex and competitive environment is ironic.
The go around for such vested challenges is to provide intensive support to SMEs. An example of such support is what we call purposeful enterprise creation; a posture towards the support of small businesses, which seeks to drive impact at its core. One way to do this is through value chain localisation. In other words, businesses must pursue a localisation strategy that advances import replacement, domestic production and export led growth.
Unless we rigorously grow the economic share of labour-intensive industries, we stand no hope of stemming the tide of unemployment. Mining, manufacturing, agri-processing, engineering and other value-adding basic industries need to become the centrepiece of any SME development and/or support strategy.
Small business support must not be anchored around funding but rather, it must be predicated on market access and value chain transformation.
Latest on Business Ignite