23 February 2020
Septi Bukula: Outside View
Small business support has been an important focus of both government policy and action since the dawn of democracy.
Since former president Nelson Mandela launched his government’s small business support policy in March 1995, South Africa has seen massive growth in support programmes driven by both the public and private sectors.
But there are still calls for the government to do more. But how much is enough? Some of the existing support can certainly be made more accessible and effective, but do we really need more programmes? Has the explosion of new programmes since 1995 changed the fortunes of entrepreneurs and small business owners materially? Look, for example, the enterprise and supplier development introduced by Broad-based Black Economic Empowerment legislation, which has created an industry of intermediaries worth billions of rands. But how much real growth and access to procurement opportunities have small businesses enjoyed as a result?
I doubt South Africa needs more government intervention. I am not convinced increased support will yield better results. What is needed is a rethink of existing support to improve its quality and impact. We should not focus on how many new initiatives the government introduces, but rather how everyone involved in small business development can collectively make existing support a lot smarter and effective.
One of the most fundamental errors we have made in our small business development efforts over the past 25 years is to build massive institutional infrastructure that has become the locus of support. In doing this, we have created a situation where the success or failure of entrepreneurs and their ventures is predicated upon support institutions and their initiatives rather than the savvy and drive of entrepreneurs themselves.
We need to shift the locus of support away from institutions to entrepreneurs themselves, with institutions playing a support role rather than being expected to take charge. We can do this by encouraging and aiding entrepreneurs to establish vibrant networks, which are known to be the bedrock of entrepreneurial dynamism around the world. Within these networks, entrepreneurs learn from each other and devise collaborative strategies to access opportunities and resources. They determine the external support they need and how it should be delivered to them. Institutions, in turn, respond to entrepreneurs as clients, not beneficiaries. This, I believe, is the mindset shift we need to see across the support system if we are to stimulate entrepreneurial success.
- Bukula is the founder of Osiba Analytics, a policy research firm, and a member of the World Business Angels Investment Forum’s Global Start-up Committee. He also chairs the Research and Dialogue Technical Task Team of the Services Seta’s Entrepreneurship and Cooperatives Development Institute.
He writes in his personal capacity.