South Africa lacks an effective ”one-stop shop” for enterprise development, which needs to be urgently addressed to help job creation, the Democratic Alliance (DA) said on Thursday.
Outlining the DA’s proposals in this regard at a media briefing at Parliament, spokesperson Les Labuschagne said small-business development was not on track.
Yet it was a massive opportunity for job creation and poverty eradication.
”The problem with the government’s response is not the range of services that it has sought to provide, but its lack of success in implementing them properly,” he said.
The current multitude of small-business development agencies had limited geographical coverage and mandates that only served to complicate small-business development, rather than promote it.
These included the South African Micro-finance Apex Fund, Khula Enterprise, the National Empowerment Fund and the Industrial Development Corporation.
The fifth Department of Trade and Industry organisation, the Small Enterprise Development Agency (Seda), should fit the bill, but had major shortcomings.
Seda offices were often not particularly accessible or well advertised, and Seda did not seem to communicate with local authorities to integrate local economic development initiatives into their programmes and assistance efforts.
Potential entrepreneurs without an appointment to see a Seda consultant also risked being turned away, while Seda did not seem to function as a walk-in service.
Instead it seemed to identify potential entrepreneurs it deemed suitable to benefit from its programmes.
Labuschagne said an enterprise development agency should actively recruit potential entrepreneurs into establishing small businesses, and develop, support, counsel and assist them in this.
It was also necessary to communicate and market the plethora of enterprise development services, products, assistance packages and organisations to potential entrepreneurs in an integrated manner.
The agency should broker access to and facilitate surety for enterprise development services, products, and assistance packages.
It should actively engage enterprise development, enterprise-development finance institutions and product owners from all sectors to coordinate with one another in order to facilitate the identification of new opportunities for enterprise development and to identify gaps in service provision and product lines.
It should also actively engage municipalities in terms of local economic development policies, strategies, industry specific master plans and identifying opportunities and threats in terms of SMME (small, medium and micro enterprise) development at local level.
According to the South African Employment report, in 2005 large established businesses created only 10% of all new jobs.
The most recent South African Small Business Review showed that more than 30% of all jobs were provided by micro-enterprises, while small businesses provided work for a further 40% of those employed.
”Should government establish an enterprise development agency along these lines then it may well succeed in leveraging the significant job creating power of small businesses in a much more powerful way,” Labuschagne said. — Sapa