1 department of economic development and tourism developing enterprises in the western cape some...

1

DEPARTMENT OF ECONOMIC DEVELOPMENT DEPARTMENT OF ECONOMIC DEVELOPMENT AND TOURISMAND TOURISM

Developing Enterprises In the Western Cape

Some Preliminary Ideas

Brendon Roberts

20 May 2003

2


A Simple Statement of the ProblemA Simple Statement of the Problem

Broadly speaking, if we are to address poverty and Broadly speaking, if we are to address poverty and increase employment, there has to be economic growthincrease employment, there has to be economic growth

In essence growth means more economic activity on the In essence growth means more economic activity on the ground.ground.

In simple terms, to achieve this means that we need to In simple terms, to achieve this means that we need to have: have: more business activity by existing businesses and more business activity by existing businesses and more businessesmore businesses

3


Enterprise DevelopmentEnterprise Development

Given that all business activity takes place in some form of Given that all business activity takes place in some form of enterprise, from the one-person micro-enterprises to giant enterprise, from the one-person micro-enterprises to giant multi-national corporations, it would appear logical that multi-national corporations, it would appear logical that “somebody”“somebody” needs to act swiftly and decisively to do two needs to act swiftly and decisively to do two things in relation to enterprises if we want to promote things in relation to enterprises if we want to promote growth:growth:

• To assist existing enterprises to grow stronger and bigger To assist existing enterprises to grow stronger and bigger ((enterprise enhancemententerprise enhancement) and) and

• To assist new enterprises (including co-ops) to come into To assist new enterprises (including co-ops) to come into existence (existence (enterprise creationenterprise creation) and then grow stronger ) and then grow stronger and biggerand bigger

4


The History to date (Slide 1)The History to date (Slide 1)

• Central Government has created an enhancing Central Government has created an enhancing environment: policy, institutions, financing. Central environment: policy, institutions, financing. Central Government and NGO have provided potential Government and NGO have provided potential entrepreneurs with information. Yet, on the micro-entrepreneurs with information. Yet, on the micro-enterprise and small business end of the spectrum, this enterprise and small business end of the spectrum, this has not translated into the level and quality of business has not translated into the level and quality of business creation which we had hoped for and need:creation which we had hoped for and need:

• The strong informal support and encouragement The strong informal support and encouragement mechanisms which are in place in the communities which mechanisms which are in place in the communities which have been encouraged and advantaged in business in the have been encouraged and advantaged in business in the past are not there in the disadvantaged communitypast are not there in the disadvantaged community

5


The History to date (Slide 2)The History to date (Slide 2)

• Most of the intended beneficiaries of these Central Most of the intended beneficiaries of these Central Government initiatives have been raised to perceive Government initiatives have been raised to perceive themselves as employees and not as entrepreneurs in themselves as employees and not as entrepreneurs in most sectors of the economy and so have not easily most sectors of the economy and so have not easily embarked on the journey to creating and developing embarked on the journey to creating and developing enterprises.enterprises.

• This does not mean that the courage to be a risk taker or This does not mean that the courage to be a risk taker or the skills or potential to manage an enterprise does not the skills or potential to manage an enterprise does not exist. Some have, in fact, set out on that journey.exist. Some have, in fact, set out on that journey.

• However, many of them have encountered extraordinary However, many of them have encountered extraordinary hurdles, barriers and, in some cases, even failure.hurdles, barriers and, in some cases, even failure.

6


Who Should Act?Who Should Act?

Many Role Players:Many Role Players:

• Government (Local, Provincial, National)Government (Local, Provincial, National)

• BusinessBusiness

• Non-Governmental OrganizationsNon-Governmental Organizations

• The CommunityThe Community

7


What the Province has decided to doWhat the Province has decided to do• In In ordinary timesordinary times, in the broad sphere of “economic affairs” in , in the broad sphere of “economic affairs” in

government, it falls to Provincial Governments to be government, it falls to Provincial Governments to be implementers, to make things happen on the groundimplementers, to make things happen on the ground

• But these are not ordinary timesBut these are not ordinary times. In the tenth year of our . In the tenth year of our democracy, there is consensus that something democracy, there is consensus that something extraordinarextraordinary y needs to be done to address employment, ownership and povertyneeds to be done to address employment, ownership and poverty

• Therefore, we have decided to Therefore, we have decided to take a strongly interventionist take a strongly interventionist positionposition in relation to enterprise enhancement and creation in relation to enterprise enhancement and creation

• We will act aggressively to We will act aggressively to mobilize every resource we canmobilize every resource we can in in both the private and public sectors, domestically and abroad to both the private and public sectors, domestically and abroad to support this interventionsupport this intervention

8


An integrated intervention: The six-packAn integrated intervention: The six-pack

We will intervene in a manner which achieves as many We will intervene in a manner which achieves as many of the following simultaneously:of the following simultaneously:

Creates employment,Creates employment, Defends employment,Defends employment, Shifts ownership patterns,Shifts ownership patterns, Stimulates the establishment and/or growth of Stimulates the establishment and/or growth of

SMMEs,SMMEs, Creates and reinforces a tradition of Creates and reinforces a tradition of

entrepreneurship andentrepreneurship and Provides a basis for Local Economic Development to Provides a basis for Local Economic Development to

take offtake off

9


Specific actions: 1Specific actions: 1

• We will engage significant numbers of existing We will engage significant numbers of existing

enterprises of all sizes and in all sectors intensively. enterprises of all sizes and in all sectors intensively. In this engagement we will:In this engagement we will:

• Identify problems which enterprises experience in Identify problems which enterprises experience in the business environment and attempt to address the business environment and attempt to address thesethese

• Encourage them to move in the direction of Encourage them to move in the direction of supporting the six-pack or any sector-specific supporting the six-pack or any sector-specific charter scorecardcharter scorecard

10


Specific actions: 2Specific actions: 2

• Enterprise creation: We will engage in a process called New Enterprise creation: We will engage in a process called New

Business Actualization [NBA] which, in turn, will consist of:Business Actualization [NBA] which, in turn, will consist of:

• Major and Medium-sized Business Actualization [MBA]Major and Medium-sized Business Actualization [MBA]

We will develop project proposals to a level of detail which potential We will develop project proposals to a level of detail which potential participants can engage seriously and will recruit the full team of participants can engage seriously and will recruit the full team of required partners, not just investorsrequired partners, not just investors

• Small and Micro-enterprise Actualization [SBA]Small and Micro-enterprise Actualization [SBA]

We will drive the processes of creating “ready-to-occupy” enterprises We will drive the processes of creating “ready-to-occupy” enterprises and overseeing a recruitment of qualified entrepreneurs to own themand overseeing a recruitment of qualified entrepreneurs to own them

11


Specific actions: 3.1Specific actions: 3.1

Enterprise development: There are many facets to an Enterprise development: There are many facets to an

enterprise. Some existing enterprises will need some enterprise. Some existing enterprises will need some specialized advice and services in some of these facets to specialized advice and services in some of these facets to improve their performance and/or to grow. Most new improve their performance and/or to grow. Most new enterprises will require a great deal of specialized advice enterprises will require a great deal of specialized advice and services in most facets in order to become effective and services in most facets in order to become effective and to grow.and to grow.

We will mobilize as many partners as possible to make We will mobilize as many partners as possible to make

advice and services (some on a commercial basis) advice and services (some on a commercial basis) available in as many facets as possible to as many available in as many facets as possible to as many enterprises as we can through an enterprise development enterprises as we can through an enterprise development pipeline called Real Enterprise Development or pipeline called Real Enterprise Development or REDRED

12


Specific actions: 3.2Specific actions: 3.2

Enterprises will be able to access advice and service providers Enterprises will be able to access advice and service providers through offices across the Province called through offices across the Province called The RED DoorThe RED Door

The essential elements of a The essential elements of a RED DoorRED Door office will be: office will be: A single entry point to seek assistanceA single entry point to seek assistance Non-specialist advice and information will be offeredNon-specialist advice and information will be offered Those needing specialized advice or services will be referredThose needing specialized advice or services will be referred Providing a consistent “guide/anchor person” in the processProviding a consistent “guide/anchor person” in the process Monitoring and evaluation of the quality of advice and Monitoring and evaluation of the quality of advice and

servicesservices Acting to fill advice and service gaps where possibleActing to fill advice and service gaps where possible Internet accessInternet access

13


Specific actions: 3.3

Advice and services will be provided in the following Advice and services will be provided in the following areas:areas:

(a) business idea development, (b) business plan (a) business idea development, (b) business plan development, (c) financing [loans, incentives, (d) grants development, (c) financing [loans, incentives, (d) grants and investment recruitment], (e) technology, (f) and investment recruitment], (e) technology, (f) sourcing and procuring inputs, (g) operating skills, (h) sourcing and procuring inputs, (g) operating skills, (h) management skills and HRD, (i) quality management, (j) management skills and HRD, (i) quality management, (j) packaging, logistics, (k) export and import processes,packaging, logistics, (k) export and import processes,

(l)tender application skills, (m) legal advice, (n) IT (l)tender application skills, (m) legal advice, (n) IT advice, (o) accounting advice, (p) marketing advice, (o) accounting advice, (p) marketing [domestic and global (export), (q) client care.[domestic and global (export), (q) client care.

14


Specific actions: 4 In a globalized business environment, enterprise development must

include mechanisms to ensure the global competitiveness and relevance of enterprises

It is almost impossible for SMMEs and BEE startups to develop and

maintain the capacity to scan, analyse and digest developments and, hence, opportunities in the global business environment without some form of assistance

Secondly, there are very powerful forces at play which attempt to

relegate countries and sub-national regions like ours to limited roles in the global division of labour. It is almost impossible for business to overcome this on its own

In this light, a major part of our broader approach will be to build a

Global Business Intelligence Unit for the Western Cape Business Community

15


Specific actions: 5

One of the ways to promote growth is to export our labour in the form

of products and services. However, the knowledge and expertise required to export successfully is considerable for established businesses. For start-ups it is a major hurdle. When you add in different languages, scripts and cultures, it becomes an almost insurmountable barrier.

We are looking for partners to join us in a PPP to form a Trading

House. In essence, we want to take over the products at the factory gate,

help find a client abroad, and deliver the goods to the client’s warehouse. Once this relationship between the exporter and the importer is established, the Trading House will withdraw from the relationship.

16


Specific actions: 6Specific actions: 6 The promised R10-million. It is intended to serve two The promised R10-million. It is intended to serve two

purposes:purposes:

To show our seriousness and, in so doing, to “crowd To show our seriousness and, in so doing, to “crowd in” other public and private resources for enterprise in” other public and private resources for enterprise creation and developmentcreation and development

To finance those initiatives which this consultative To finance those initiatives which this consultative process indicates will be most effective to remove process indicates will be most effective to remove obstacles and/or to stimulate small and micro-obstacles and/or to stimulate small and micro-enterprise creation and developmententerprise creation and development

17


Parting shotParting shot

For the critics who are likely to tell us that we are For the critics who are likely to tell us that we are shooting for the Moon and are likely to fail, I’d like shooting for the Moon and are likely to fail, I’d like to quote JFK who was told that the attempt to send to quote JFK who was told that the attempt to send a person to the Moon was a waste of money and a person to the Moon was a waste of money and was likely to fail. He said:was likely to fail. He said:

““We go to the Moon, not because it easy, but We go to the Moon, not because it easy, but because it is hard.”because it is hard.”

1 department of economic development and tourism developing enterprises in the western cape some...

Documents