/ 25 October 2013

Soweto’s Vilakazi streets reflect the SME landscape

Soweto's Vilakazi Streets Reflect The Sme Landscape

Vilakazi Street in Orlando West, Soweto has claimed its place as a tourist attraction that celebrates the heroes of the struggle against apartheid and is littered with landmarks such as Nelson Mandela's former house, restaurants and other businesses cashing in on the area's fame.

Vilakazi Road in Dlamini may share the name but none of the prestige of its namesake six kilometres away.

This road and its surrounds clearly lack the same level of development and is littered with potholes and dilapidated infrastructure marked by garbage and broken water mains overflowing into the street.

The contrast in conditions is an apt analogy for the vast differences between established and small businesses in the country.

This happened to be the topic of discussion for a Mail & Guardian Critical Thinking Forum hosted at Nambitha Restaurant in the more famous of the Vilakazi streets, which was hosted in mid-October by Old Mutual.

The question at the heart of the discussion was: How can entrepreneurship save the SA economy. Unfortunately the discussion failed to deliver this silver bullet, but did produce lively debate between panel members as well as audience members.

The dire state that small businesses find themselves in was highlighted by Thami Mazwai of Wits Business School who cited the results of research conducted last year by the University of SA.

This, he said, showed that the average monthly personal income earned in the small business sector was little more than R1000.

The survey showed that nearly half of the people within this bracket are aged between 25 and 35, which Mazwai described as a 'ticking time bomb".

Founder of Wiphold, Gloria Serobe, had some equally sobering thoughts for entrepreneurs and would-be entrepreneurs who are wont to blame challenges such as the apartheid legacy, difficulty in raising finance and the red tape they encounter.

"We are pretty much the first generation of entrepreneurs in a democratic South Africa and what this means is that we have a first generation of entrepreneurs and politicians trying to undo a very sophisticated system of apartheid. It had all the intellectual capacity behind it and it worked. And to undo it is going to require the same intellectual capacity and work ethic and energy.

"And while apartheid was a sorry system for us, at the same time the market they left for us is massive. We have the market in our hands."

She also touched on the paradox apparent in the desire for funders to back successful ventures, while simultaneously recognising the valuable lessons entrepreneurs can learn from their business failures.

"I sit on the Nedbank credit committee and the applications I look forward to looking at most are those from the failed entrepreneur because the chances are they will not fail again. They have learnt something and are still in the game – we want them in the system. So I think an entrepreneur who has not felt the pain of failure is less likely to succeed," she said.

Matsi Modise of the SA Black Entrepreneurs Forum echoed these sentiments, adding that being an entrepreneur is not all a bed of roses and that part of the attraction of starting a business is finding solutions to problems.

"There is a perception that entrepreneurship is for the lucky few, but a true entrepreneur is somebody who creates opportunities. So we need to start creating people who are going to create opportunities. People have various definitions of what an entrepreneur is, but essentially it is creating something from nothing," she said.

"Developing entrepreneurs is not a charity case — the country has to see this as an economic imperative. The function of the DTI and Seda and those types of organisations is to create an enabling environment, but at the end of the day it is your responsibility to wake up every day and contribute to the economy.

"My sentiment is that we need to make entrepreneurship work. If it's not working it's probably the wrong market — you may have failed but start again because you're an entrepreneur."

One man who has experienced the pain and pleasure of starting up a business that has achieved worldwide acclaim is Herman Mashaba.

His Black like Me brand is clearly a success, enabling him to turn his attention to trying to promote an environment that nurtures entrepreneurship.

This he does through his role at the Free Market Foundation and has become a vocal opponent to government policies that he said was stifling the development of small businesses.

"We have every reason to be concerned about the state of entrepreneurship in this country. We are sitting here 20 years into our democracy and entrepreneurs, particularly black, are facing major challenges.

"If we want this economy to grow and provide employment for our people we need less government intervention in our lives. If we look at the legislative framework I think we are fooling ourselves if we think government will be the driver of growth.

"We are sitting with high employment, our economy growing at 2%, how are we going to get SA to perform at higher levels? The reason why we are not doing this is because we are ignoring small business that will be the driving force to get our economy to grow at 5% or more."

He suggested further that South Africans should engage government on the current labour legislation that he said had destroyed many small businesses.

"We are not going to create an environment where people are employed if we punish business people and force them to pay what they can't afford. As long as we fail to recognise this as a fact of life we are going to pay a price and unemployment will only go up. I really do hope that we can deal with these issues," he said.

Mojalefa Mohoto, chief director of DTI's enterprise development unit, indicated that efforts have been stepped up to extend support to small businesses through making more information available, as well as creating business incubators.

"We have to listen more so that we can do better in our response. What I have picked up from the youth is that they are in the wilderness and don't have someone who can speak on their behalf. So we have to resuscitate the issue of advocacy and we are talking to business associations to do the work they are supposed to do."

He indicated that DTI was also working on developing an informal business strategy.

"We need to categorise enterprises in terms of their needs and how we support businesses at a township level. We are building this strategy with the instruments that help people access the services that we provide.

"The incubation programme we are rolling out across the country is a model to help people with skills in terms of business acumen. We also have realised the need to categorise small business in townships because they have particular needs. And we as DTI are bringing formulas to treat them differently than other small and medium businesses."

These types of interventions are clearly needed, and sooner rather than later. What we can only hope is that the promised improvements to this 'other Vilakazi street' happen so that it can resemble the clean, vibrant and hospitable Orlando West incarnation.

This article forms part of a supplement made possible by the Mail & Guardian's advertisers. Contents and photographs were supplied and signed off by Old Mutual and Nedbank