BUSINESS SUPPORT & MARKETS UNIT ENTREPRENEURSHIP IN ethekwini PEER EXCHANGE 22 February 2011
Economic Significance of SMMEs Of a total of 906 700 firms operating in South Africa, large enterprises constitute only 6 000 in number, or 0,7 per cent of the total. The remainder is made up of SMEs, including survivalist and micro enterprises. All large enterprises rely heavily on SMEs' performance for supply and demand reasons. Unemployment in African cities is the highest in the world, averaging around 24%. Up to 54% of all employment is in the informal sector. This presents major challenges to urban policy and management, and in particular the need to ensure a highly efficient support environment
Challenges in Promoting Entrepreneurship in SA Problem One - Lack of awareness and coordination of business development services There are a number of organisations, both public and private, that exist within the EMA which provide services to support and develop SMMEs. Problem Two - Capacity within institutions to provide efficient services Further criticisms of national government s SMME support programmes refer to the centralised, top-down nature of many of the programmes.
Challenges Continued Problem Three - Minimal impact of programmes In an evaluation of an SMME training programme implemented in the ethekwini Municipality, a significant problem raised was the range of different types of SMMEs that were expected to undergo a one-size-fits-all training programme. Problem Four - Willingness to pay for services In many developing countries, governments continue to provide heavily subsidised services for SMMEs.
Public Support structures National Department of Trade and Industry SEDA National Department of Economic Development Other Ministries eg. Public Works etc also promote entrepreneurship development Provincial Departments of Economic Development Provincial SEDAs Municipalities Economic Development Departments Focus on First and Second Economy issues Bridging the gap Example: ethekwini Municipality
INSTITUTIONAL STRUCTURE OF THE EMA
Informal Economy Management and development of the Informal Economy is an excellent means of stimulating entrepreneurship particularly at the lower levels of economic ladder Regularising the informal economy has remains a challenge The introduction of the RMS has helped improved the regularising. Allocations policy definitely favors those at the lower end of economic ladder
Markets Responsible for promoting entrepreneurship by providing the necessary infrastructure Also responsible for capacitating traders to improve their business operations The are 18 informal markets throughout the EMA. The establishment of Flea markets encourages entrepreneurship especially to those who are just testing the markets
Container Parks, Incubators and Hive Development Programme The Municipality creates an enabling environment by setting aside land and infrastructure for container parks, incubators and hives There are various Incubators and Hives around the city which is a means of encouraging entrepreneurship in the ffg sectors: Construction ( City Centre and KwaMashu) Manufacturing ( Cato Manor) Clothing and Textile (Clairwood, ) Cato Crest Container Park Wiggins Hive Bellair market Engaged in a partnership with Nedbank and UKZN to help develop the incubatees and to ensure that they achieve the intended growth.
SUCCESS STORIES: SMME PROGRAMMES Access to Skills
Access to Skills
Success Stories: SMME PROGRAMMES Access to Markets
Access to Markets
Private sector Financial institutions, training institutions Corporate companies are expected to contribute 3% of their turnover to Enterprise development Increasing support from the Private sector towards Entrepreneurship
CHALLENGES Access to Finance
Access to Finance
Strategic Partnerships Government resources are limited, therefore the Unit initiated a project to form partnerships to increase the level of coordination, increase the pool of resources available and to increase the value of the service offering to SMMEs A number of partnerships have been initiated with International organisations, the Private sector and other government departments as well as tertiary institutions We continuously appeal to other companies, organisations and institutions to come forward to forge partnerships with the Unit as part of their Corporate Social Investment Programmes or to increase your performance on BBBEE scorecards and ratings.
Current Strategic Partnerships
Conclusion Our Municipality makes a significant contribution towards alleviating many of government challenges and contributing to national economic and social objectives such as Skill Development Job creation and economic growth Poverty alleviation Human Resources development SMMEs are finding themselves in a new and rapidly globalising context and in order to take advantage of this trend, instead of being engulfed by it, a brand new class of SMMEs must be fostered. Therefore a world class support environment is needed! Achieving a world class support environment requires hard work and, private sector and political commitment!!
Thank you!!