This is an FM Editorial for 6 June 2008- see my thoughts in the comments link:
Developing entrepreneurship is part of the answer to SA's unemployment problem. Since 1994 government has consistently said that small business development is one of its foremost priorities.
But attempts to establish the institutions to develop small business have been disastrous. The latest is the long, unresolved leadership crisis at the Small Enterprise Development Agency (Seda), set up in 2004 in a belated attempt to get a meaningful small business support programme going. Three and a half years later, Seda is not yet out of the starting blocks.
As in many government institutions, the problem is leadership. Weak top management has failed to provide the vision and leadership required to get things moving. Neither top management, nor many of the staff appointed at the expensive network of offices that have been established, knows much about business or entrepreneurship. And though Seda has a board on which several business people serve, it does not have the power to hire or fire the top executive - a responsibility that rests only with minister of trade & industry Mandisi Mpahlwa.
That he hasn't acted on the situation after the organisation has f oundered for more than two years is yet another example of the drift that is occurring in government. Cabinet ministers and top state officials - just like President Thabo Mbeki himself - are more concerned about managing the difficult political dynamics brought on by factionalism in the ANC than they are at making sure that government works.
The results can be seen in UCT's new annual entrepreneurship survey - the Global Entrepreneurship Monitor - published last week. As previous surveys have shown, in SA only a small proportion of the population participate in entrepreneurial activities. This is unusual for a developing country with high unemployment where, typically, greater numbers of people start their own enterprises.
The survey found that an alarming proportion of people aged between 18 and 35 believe it is government's responsibility to provide them with a job. Most people interviewed had never heard of Seda and only a tiny proportion had made use of its services.
If this isn't a wake-up call for Mpahlwa then nothing is ever likely to be. Roll on the next cabinet.
1 comment:
My opinion of government funding programmes
Anyone who has read through my profile will know that I am passionate about creating opportunity and growth for young entrepreneurs.
I am also of the opinion that our government funding programmes do not support intelligent entrepreneurs. In many developing countries around the world, namely India and Malaysia, the government has support programmes that provide support (in the form of grants, loans and incubators) to university graduates looking to start new businesses fresh out of college or university. In first world countries like the UK, there are various public/private partnership that exist for the sole purpose of developing new business concepts developed by people under 30.
South Africa has an abundance of ideas and an equal abundance of talented young people looking to succeed in life. Then why is it that we still suffer from a massive exodus of young graduates leaving our shores looking for opportunities elsewhere, why is it we have a massive void created by unemployed graduates?
My experience has taught me that government funding programmes exist primarily to service the unskilled, uneducated and under development sections of the youth. Not enough focus is placed on the educated, intelligent and inexperienced young people in our country. Imagine for a second if more funding what focussed on supporting entrepreneurial projects that were developed by young graduates, who are not interested in entering the formal job market. I am willing to bet that the outlook of unemployment will change in South Africa, I am willing to bet that the skills shortage will be reversed, I am willing to bet that matric pass rates will improve, I am willing to bet that poverty will decrease, I am willing to bet that skilled people will remain in this country to pursue opportunities.
It's no use moaning and complaining about about a situation without offering solutions to it. So, I have taken up the gauntlet and gone out of my way to begin a process which I hope one day will benefit the youth of this country:With the support of the founders of Bizwave.com, we are looking to grow a strong network of entrepreneurs and eventually looking to start a unique project which will lobby government and private sector funders to support young graduates.
Support comes in many forms, and is not only limited to finance. An excellent example already exists in the Eastern Cape, where the Buffalo City municipality supports young people through subsidised driving lessons. This has a dual impact in the lives of those that benefit from programme, for one it immediately gives them the opportunity to travel freely without the stress of relying on an "unreliable" public transport system...hooray for that! Furthermore, it opens up opportunities for employment in the formal sector. Such a project will combine experienced mentorship, business assessment and business training. This benefits both the entrepreneur and the funder, as you are able to improve the chances for business success.
The annual GEM survey on global entrepreneurship has consistantly shown South Africa to be a land of opportunities with a thriving informal and SMME sectors. At the same time, it has pointed a disapproving finger at the lack of proper government support and ease of doing business in South Africa.
Governments exist in modern society for a number of important reasons, but in modern economies, government entities are better served as support mechanisms (and watchdogs). Our government could do a better job of eradicating youth unemployment by supporting intelligent, graduate development and youth entrepreneurship.
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