Small businesses and cooperatives can expect more support from government as the Department of Small Business Development gets to work.
Small businesses have the potential to become the backbone of the economy if they are given the support they need to succeed, said Minister of Small Business Development Lindiwe Zulu during International Cooperative Day.
She noted that the failure rate for new businesses was around 70 per cent to 80 per cent in the first year and only about half of those that survived remained in business for the next five years.
To reverse this trend, the department would:
- Increase the supply of non-financial support services to cooperatives.
- Create demand for cooperative enterprises products and services.
- Improve the sustainability of cooperatives.
- Increase the supply of financial support services to cooperatives.
- Increase supply for financial and nonfinancial support services.
- Creating demand for small enterprise products and services.
- Reduce regulatory constraints on small enterprises.
She added that according to the National Development Plan, about 90 per cent of jobs would be created through small and expanding companies by 2030.
“The sad reality is that South Africa has one of the lowest rates of entrepreneurship activity in the world. We have a collective responsibility to create a culture of entrepreneurship in our country. We will lead a massive entrepreneurship drive in order to create a nation of entrepreneurs.”
The department would also look carefully at legislation and policies that are creating barriers in the development and growth of small, medium and micro enterprises (SMMEs).
“We will do this in consultation with all stakeholders. We will focus on creating an enabling environment for small businesses to grow and thrive.
“We will work with all our partners to address, among other challenges, the lack of access to markets and procurement, lack of access to finance and credit, low skills levels, lack of access to information,” the Minister said.
She added that her department would make it easier and faster to register businesses by ensuring that all services are provided under one roof.
“SMMEs have the potential to be the main driver of economic growth, poverty reduction and job creation. I am informed that in South Africa, small businesses contribute to about 50 per cent of all employment opportunities,” Minister Zulu added.
She said her department would also discuss with the Department of Basic Education how entrepreneurship could be taught at schools.
“People are afraid of venturing into something without security. The culture of having your own business was not installed in South Africans so we would rather work for someone,” she pointed out.
It is only when a person finishes school that they are for the first time faced with the possibility of running their own business, says Minister Zulu.
“They have spent 12 years at school and have not been taught entrepreneurship. For example, there are tuck-shops at schools; it would be a better idea to let pupils at school run the tuck-shop so they can learn practical entrepreneurship skills.”
The Minister said cooperatives were examples of South Africans making things happen for themselves.
“They [cooperatives] are by their very nature about initiative and self-reliance. Many of our successful cooperatives are examples of how much we can achieve if we seize the opportunities brought by our democracy and freedom to create a better life ourselves and fellow citizens,” she added.
The department would also focus on creating an enabling environment for the development and growth of cooperatives.
Minister Zulu said while her department was new, a strong foundation had been laid by the Department of Trade and Industry.
“Some of the work has been done, my job is to look at areas that need improvement and not undo what already works.”