Today, South Africa’s business trends and the entrepreneurial landscape demands far more sophisticated skills in order to achieve competitiveness and ensure survival of SMMEs which have to look beyond the confines of tradition. This was said by Minister of Small Business Development, Ms Lindiwe Zulu, at the opening ceremony of the Global Entrepreneurship Week which took place in Johannesburg today.
“Business failure is often attributed to the lack of entrepreneurial knowledge and skills such as innovation and risk taking and therefore should not be overlooked as essential ingredients to SMME success”, she said. Minister Zulu added that low levels of education and training, as well as poor business skills were contributing factors. She pointed out that the department is committed to facilitating innovative interventions to support the SMME and cooperative development in order to boost employment opportunities.
“To address the skills challenge, my department has embarked on a journey to develop entrepreneurs. Together with Technical Vocational Education and Training (TVET) Colleges, we are launching Centres of Entrepreneurship across all our provinces”, said Minister Zulu. This year alone, the department has launched these centres in False Bay College (Western Cape Province) and Gert Sibande College (Mpumalanga Province) focusing on the hospitality sector. Two more Centres of Entrepreneurship will be launched in the North West and Kwa-Zulu/Natal.
Minister Zulu reminded stakeholders that to meet the NDP target of creating 11 million jobs by 2030, South Africa needed scalable SMMEs, growing at a rate of 20% per annum. “This means that small businesses will have to contribute roughly 800 000 jobs per year until 2030 according to our calculation. In South Africa, SMEs contribute 55% to GDP and are estimated at more than two million in number”.
Minister quoted the Tech Start-UpsiIn South Africa survey which was released in 2015. The survey indicated that 17% of start-ups in the country had black founders. This is a significant increase from a national survey undertaken in 2012 where just over six per cent of start-up founders were black. The survey, which sampled 200 start-ups in South Africa, defines a tech start-up as a company with annual revenues below R20 million and has less than 100 employees.
Minister Zulu said: “It is encouraging to observe that survey results reveal a marked change in the SA start-up landscape, with an increase in black entrepreneurs, more than that recorded by any other start up survey to date. Despite the upward trend in the number of SMMEs registered since 2000, there is growing consensus that South Africa’s business activity rate still lags behind its BRICS peers”.
She indicated that her department will place more emphasis on the development of small businesses and cooperatives and facilitating access to finance and market support; and dismantling regulatory constraints and addressing the legislative environment that inhibit growth SMMES to competitive enterprises.