Turning red tape into smart tape

Professor Irene Moutlana, vice-chancellor Vaal University of Technology with acting head of entrepreneurship in the department of small business development, Mzi Memani

Professor Irene Moutlana, vice-chancellor Vaal University of Technology with acting head of entrepreneurship in the department of small business development, Mzi Memani

The future success of small businesses is still being hamstrung by bureaucracy and complicated red tape, which are foremost among the many hurdles aspirant entrepreneurs are forced to surmount.

This emerged at the 2015 South African Technology Network (SATN) Conference held at the VUT Southern Gauteng Science and Technology campus in Sebokeng. The conference runs from 19 to 21 October.

Acting head of entrepreneurship in the department of small business development Mzi Memani, who did the opening address on behalf of Minister of Small Business Development Lindiwe Zulu, stressed that bureaucracy must be reduced to enable small businesses to trade. “We need to create an enabling environment. We need to turn the red tape into smart tape, simplify it, and allow small businesses to more easily establish themselves.”

The theme of this year’s conference is “Entrepreneurship Education for Economic Renewal”. Memani’s address focussed on key elements the department believes must be considered to foster entrepreneurship among the youth and ensure economic growth.

“Access to finance is major barrier to entry. Entrepreneurs and small businesses are forever battling to get financing for their ventures and are unable to get the help they need. It is necessary to cultivate a culture of entrepreneurship through offering incentives. Financing through crowd-funding initiatives is a good example of an incentive. It offers more than just a loan that needs to be paid back,” he said. He used Uber as an example of a small company changing the transport industry through innovative entrepreneurship.

“Government and the private sector must work closely together to create small business opportunities,” said Memani. “These opportunities will develop a sense of entrepreneurship in the youth, and will ultimately address the issue of unemployment that is negatively affecting South Africa’s economic growth.”

Another element that needs attention, he said, is “for small businesses to become part of the private sector value chain”. He explained that it is important to bring big business and small business closer so that they, together, can deliver products and services and as a whole contribute to growing the economy. “Small businesses must be included in the greater business environment and should not be left to work independently.”   

Memani said entrepreneurship is often forgotten in rural areas. “Rural and underdeveloped areas should not be seen as dormitories where the workforce comes from, as in the past. Entrepreneurs should be encouraged to start their small business in the townships or rural areas where they can serve their immediate communities. Only after these small businesses show success and there is room for growth should they expand further afield.”

In closing, Memani said that the department of small business development is establishing Centres for Entrepreneurship and wants to partner with educational institutions to ensure that students receive entrepreneurial exposure. “We believe that by partnering with higher and tertiary education institutions the department can create an entrepreneurial platform that will address unemployment, by helping entrepreneurs to establish small businesses that will contribute to the wellbeing of the economy.”