20 January 2014
Unemployment in South Africa, especially amongst young people, remains one of our country’s most pressing challenges. It is estimated that three million young people are currently unemployed, representing nearly three quarters of overall unemployment in the country.
For some, starting a business offers an alternative to finding a job, although for many a weak culture of entrepreneurship acts as a barrier. According to the GEM 2012 South Africa report, only 36% of South Africans believe that entrepreneurial opportunities exist and only 40% believe they have the skills necessary to succeed. These figures are significantly lower than other equivalent countries in Sub-Saharan Africa.
Since the mid-1990s South African Breweries (SAB) has recognised that encouraging enterprise development and job creation is vital to the company’s long-term sustainability, and also ensures that we are able to contribute to the objectives of the South African Government’s Broad-Based Black Economic Empowerment (B-BBEE) programme. Since 1995, through our KickStart programme, which aims to develop sustainable black and youth owned enterprises with high potential to generate jobs, we have created 3,200 new businesses, generated 21,000 jobs and helped over 24,300 entrepreneurs to improve their business skills.
We recognise though that there is more we can do as a business to increase our impact, especially amongst small businesses struggling to gain access to markets. As a significant procurer of goods and services, we have established targets to purchase from small businesses. For any large company, this is often hard to do cost-effectively and systematically as small businesses can struggle to produce at the required levels of quantity and quality, and to be price competitive. To help address this challenge, we have a range of training and capacity building programmes in place for producers, distributors and retailers in our value chain, and we also focusing more on identifying ways to more systematically connect KickStart entrepreneurs to opportunities in our value chain. As of 2013, there were 890 KickStart companies supplying goods and services to SAB in various industries, including consulting, marketing, printing, photography and ITC.
But the challenge of accessing markets is multi-dimensional and goes beyond our business, spanning needs for skills, access to finance, and an enabling policy environment. Again as a large company, we are increasingly recognising that we can achieve more sustainable impact on a greater scale by strengthening the underlying ecosystem around the small businesses that we support. Through the KickStart programme, we are connecting our entrepreneurs to a leading academic institution: The Gordon Institute of Business Science (GIBS) so they can access the best business skills training available, and also to specialist small business advisers to help guide their business growth plans.
We are also engaging with financial institutions to explore how we can better leverage our grant funding to facilitate access to commercial sources of financing more geared to the needs of small businesses – through potentially risk sharing facilities and accounts receivable financing. We are working closely with the government both to share our experience of helping to finance young entrepreneurs, but also to encourage a policy enabling environment that enables small businesses to flourish, with the right mix of incentives and regulation to ensure large companies can maximise their contribution.
Our efforts sit alongside many other enterprise development programmes now being implemented in South Africa, often through partnerships encompassing the private sector, government and civil society. But despite the increased urgency in efforts to tackle job creation, these programmes on the whole remain fragmented and in many cases duplicate effort. As the new report by the Harvard Kennedy School CSR Initiative and Business Fights Poverty: Sustaining and Scaling the Impact of Enterprise Development Programmes makes clear, a real breakthrough in achieving sustainable impact at scale will only occur when we see stakeholders implementing similar programmes joining forces to make more effective use of scarce resources - enabling those programmes to do more, for more entrepreneurs, on a more sustainable basis.
This can be facilitated through more investment in shared infrastructure, including regular forums for corporate and cross-sector dialogue, and platforms for communication, coordination, and collaboration. Such infrastructure will help to bring a sufficient critical mass of stakeholders together around a shared long-term vision and objectives, clarify the roles each stakeholder should play, and channel energy and resources where they are most needed.
This blog originally appeared on Business Fights Poverty