SINCE 1994 small business activity in SA has grown in line with the country’s GDP, which almost tripled from $143.8bn in 1996 to $404.3bn in 2011.
For small businesses, the gains have been all the more impressive given that, before democracy, myriad of restrictions, laws and by-laws prevented black entrepreneurs from entering the business world.
The Global Entrepreneurship Monitor 2014 SA report says while in 2001 19.7% of the adult population saw opportunities to start a business in SA, this figure has since increased to 37% in 2014.
Christo Botes, spokesperson for the 2015 Sanlam and Business Partners entrepreneur of the year competition, says more entrepreneurs are entering the market compared to 10 years ago.
“The entrepreneurial spirit is on the rise due to positive shifts in societal attitudes. This has resulted in an increasing number of South African adults viewing it as a career choice.” Business Engine MD Muriel Chinoda believes there has been a “total shift” in attitudes towards entrepreneurship. With the scarcity of formal jobs and persistently low global economic growth, more people are looking to establish their own businesses rather than pursue a formal career.
“There are a number of people who, after being in formal employment and acquiring some much needed experience, realise that owning and running their own businesses is a better choice. So the realisation is there and I think there is much greater acceptance of entrepreneurship as a lifestyle choice,” she says.
THE tough economic times are creating opportunities for small businesses which are nimble and on their game, Ms Chinoda adds. “There is no time for time-consuming bureaucracy and the waste that is characteristic of big businesses. So for the entrepreneur who finds a niche, produces a great product or delivers a great service, the opportunities are plenty.”
Nedbank economist Busi Radebe says despite the perception that access to finance remains a problem, she believes that the banks are open to lending to small and medium-sized enterprises.
The latest quarterly results of the Nedbank Small Business index recorded an improvement in the ease of obtaining finance from 4.1 to 4.9 — a record high since the index began.
“It is important to note that the bank’s appetite to lend is driven by customer demand and is governed by adherence to legislation such as the National Credit Act, which seeks to avoid reckless lending to consumers,” Ms Radebe says.
The government maintains that small businesses and co-operatives are critical to defeating the triple challenge of poverty, unemployment and inequality.
THE Department of Small Business Development’s Cornelius Monama says small businesses and co-operatives are expected to be central to SA’s job-creation efforts, in line with international trends.
“The National Development Plan states that about 90% of jobs will be created through small and expanding companies by 2030.”
It is from the realisation of the importance of small and medium-sized enterprises that President Jacob Zuma established the Department of Small Business Development, Mr Monama says.
“Through this intervention, the government will be able to unlock economic opportunities and thus achieve inclusive economic growth and sustainable employment, particularly for women, youth and people with people with disabilities,” he adds.
Source: Business Day Live
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By Carla Higgs
One powerful group of stakeholders affecting the environmental performance of corporate enterprises are Small, Medium and Micro-sized Enterprises (SMMEs) who are often the main contractors in industrial supply chains. Though small, SMEs have an enormous impact on social and environmental issues and play an important role in sustainable development, SMMES drive economic development, job creation and skills development opportunities.
Their impact on the environment however, particularly on local ecosystems, can be calamitous. The National Small Business Act1 describes Small, Medium and Micro- sized Enterprises (SMMEs) as separate and distinct business entities of any sector of the economy that are classified as either micro, very small, small or medium by their number of employees, annual turnover and asset value. SMMEs are not restricted to formally registered enterprises, but include informal enterprises, such as survivalist street traders and informal manufacturing, services and home-based enterprises.
SMMEs are commonly recognised as the most important sector of an economy. It is estimated that, in South Africa, 2.8-million SMEs make up approximately 91% of formal enterprises, contribute between 52% and 57% to the national GDP, and constitute 61% of formal employment. Their role in the financial economy and employment creation has heralded SMMEs as key to driving South Africa’s economic growth, equity acceleration and social development. Small business contributes significantly to the provision of productive employment opportunities as the providers of the majority of jobs, and the creators of a large number of new jobs that generate income and ultimately result in the reduction poverty. This, coupled with their role in encouraging entrepreneurship, stimulating local and regional development and creating resilient economic systems, means that SMMEs are important contributors to sustainable development. In contrast to their economic and social contribution, the environmental impact of SMMEs has not been quantified, is poorly understood and is presumed to be substantial.
When compared to their larger counterparts, smaller firms in their individual capacity may have a lesser environmental impact. However, since they represent such a large percentage of economic activity, collectively, the large number of SMMEs means that their environmental impacts are substantial. SMMEs, especially those in developing countries, are characterised by the use of older technologies which are generally less energy efficient and contribute to pollution. Some studies have indicated that SMMEs’ contribution to local pollution levels can be as much as 70%, generating as much as 60% of commercial waste and contributing between 40 and 45% to industrial water and energy consumption. The agricultural, manufacturing and service sectors have been identified as having the largest environmental impacts.
The agricultural sector is a source of water pollution and land contamination. Manufacturing SMMEs consume energy and natural resources, and generate waste and pollution. The service sector, particularly petrol stations and repair shops, pose
a risk of routine pollution or accidental releases. Further, it has been found that environmental management among small business is in its infancy and there is a general problem of non-compliance with environmental legislation. Characterised
by resource constraints, SMMEs lack awareness of environmental responsibility, environmental legislation and their own environmental impacts. In the absence of relations with stakeholders, SMMEs are also less susceptible to reputational risks.
Under the banner of corporate social/ environmental responsibility, many large corporate enterprises are implementing pollution prevention measures, material and energy efficiency initiatives, waste management, and product stewardship (to name a few) in an effort to mitigate their environmental harm and improve their environmental performance. While mitigating one’s own environmental harm is indeed noble, and can result in many positive spin-offs such as reputational benefits and cost savings, it would be erroneous to set operational efficiencies as the boundaries for an enterprise’s environmental responsibility. From a regulatory perspective, The Waste Act2 establishes Extended Producer Responsibility—an important policy approach for environmental protection as a regulatory mechanism to ensure that corporate enterprises focus on whole product systems rather than individual production facilities. This means that the responsibility for the product is broadened to include the management of the product through its entire life cycle, through all downstream levels of its supply chain and to the point of end-of-life management. From a non-regulatory perspective, corporate enterprises, although large and well-resourced, are not autonomous; they rely significantly on outsourcing for numerous products and services.
Corporate enterprises essentially function at a supply-chain level and there is an obligation for enterprises to assume responsibility for the environmental and social performance of their suppliers and partners; both suppliers’ upstream in their product chain and for their products downstream in the supply chain. SMMEs are the main contractors in industrial value chains and, therefore, can help improve or harm environmental performance within the supply chain and, ultimately, the corporate enterprise contracting the SMME. Given that extant research indicates that SMMEs are generally not engaging in environmental responsibility, this has noteworthy implications for corporate enterprises operating in the corporate social/environmental responsibility arena.
Overlooking SMME suppliers and contractors could potentially damage the environmental performance of an enterprise, with further reaching consequences particularly in relation to reputational risks. On the other hand, integrating environmental thinking into supply-chain management can potentially change the corporate social responsibility landscape. Particularly, when considered collectively, their prevalence means that SMMEs could make a significant positive contribution to environmentally sustainable development.
Source: The Green Economy Journal
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