Bureaucracy a barrier to entrepreneurship

Under the theme of this year’s 8th South African Technology Network (SATN) Conference, “Entrepreneurship Education for Economic Renewal”, the acting head of entrepreneurship for the department of small business development Mzi Memani addressed delegates on key elements the department believes need consideration in developing entrepreneurship among the youth to ensure economic growth for the country.

The 2015 SATN Conference was held from 19 to 21 October at the newly renovated Vaal University of Technology (VUT) Southern Gauteng Science and Technology campus in Sebokeng.

Memani said that the future success of small businesses was being hampered by a number of elements. “Bureaucracy and complicated ‘red tape’ are still key elements among the hurdles entrepreneurs and small business owners are faced with today,” he said.

He stressed that bureaucracy must be reduced for small business to be able 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.” 

He said access to finance is another 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.”

He mentioned that financing through crowd-funding initiatives is a good example of an incentive that offers more than a loan that needs to be paid back. 

Collaboration between various stakeholders is important to set the path of small business development. “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.”

According to Memani, another important element that needs serious attention is the inclusion of small businesses within the greater economy of the country. “Small businesses must become part of the private sector value chain. 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 therefore be included in the greater business environment and should not be left to work independently.”   

Memani also noted the importance of entrepreneurship in the often forgotten rural areas of South Africa. “Rural and underdeveloped areas should not be seen as dormitories where the workforce comes from, as in the past. Entrepreneurs within these areas must be developed and individuals in these areas should be encouraged to start small business in the township or rural area where they live to serve the immediate community,” he said. 

New on the cards for the department of small business development is the establishment of Centres for Entrepreneurship, said Memani. “The department wants to partner with higher education institutions to assist students and ensure that they get entrepreneurial education and exposure to establishing small businesses.

“The department believes that by partnering with higher and tertiary education institutions it can create an entrepreneurial platform to address unemployment. This platform will help entrepreneurs to establish small businesses that will contribute to their personal wellbeing and the wellbeing of the greater economy of South Africa.”

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