Eskom empowers small business
South Africa’s small business scene is worse off now than it has been in a long time.
A shocking statement but nevertheless true. The Eskom Development Foundation, as part of its investment in the future, is doing something about it – boosting entrepreneurship, helping small businesses.
Look at the facts: according to the Small Business Institute (SBI) the country today has fewer small businesses than 25 years ago. Then these employed 30% of South Africans. Today that figure has dropped to 5%.
And 70% fail within two years, and more than 30 with turnovers of less than R10 million close their doors every week.
This is confirmed by a 2019 report titled The Unseen Sector, published by the World Bank and the International Finance Corporation in collaboration with our National Treasury.
It is a call to action.
The report’s findings are quite harsh: SMEs are not making a meaningful contribution to the economy; South Africa should have a rate of early-stage entrepreneurship three times greater than it has; there is a low rate of survival; a significant portion of entrepreneurial activity is driven by necessity, largely by unemployed people who have no source of income.
The report identifies the challenges faced by SMEs: access to finance, skills and markets.
Not said, and unusually just about never appears in writing and discussion on the subject of small businesses: if it is bad for the big companies who have experience, capital, marketing skills and knowledgeable staff when the national economy stalls, just imagine how much more difficult it must be when you’re small and just beginning to build what you hope will be your future.
It is where the country is at the moment.
What is to be done?
The Eskom Development Foundation is addressing these real, practical problems. It does so at two levels: schools and operating businesses. Throughout the year the focus is on enterprise development, thereby creating opportunities, jobs and growing the economy.
Particularly worrying in The Unseen Sector report is the finding that SME ownership has stagnated or regressed in the age grouping where unemployment is at its worst – those under 35. There was no significant contribution to employment from this sector.
That is why the Foundation’s Simama Ranta Entrepreneurship Competition is important. The name means “empowering the economy” and so the focus is on secondary schools that are leading the way in entrepreneurship education initiatives.
It was initiated in 2010 in collaboration with the Education with Enterprise Trust (EWET). It works with more than 8 000 schools across South Africa.
The Foundation also manages a Business Investment Competition. Its highlight is an annual gathering known as The Business Connect at which 100 finalists take part. The aim of the Connect is to bring SMEs together with top line speakers on subjects ranging from financial literacy to tendering plus business matchmaking to speed marketing.
It is a major boost in creating equitable access to economic opportunities for small businesses.
I It is trite to point out that the country’s fundamental problems are the high rate of unemployment and the staggering depth of poverty. And the question may well arise: why does a development foundation whose origins are to be found in a massive state organisation which originates and delivers electricity, get involved in matters which are not obviously in its area of interest.
And the answer is really quite simple: it behoves all of us to reach out to those who do not have the opportunities the majority has. This is true of all in the public sector but equally so in the private one. And for individuals at all levels of society.
Not one of us can sleep peacefully if there are some of us who have no work, no food and no opportunities.
The Eskom Development Foundation believes strongly that doing only what is expected of you is not enough. Reaching out is a national need. Or as the World Cup winning team would put it: stronger together.
Ramonotsi is the CEO of the Eskom Development Foundation.