Improving Government Support to the SMME Sector

Transcript:Improving Government Support to the SMME Sector:
Improving Government Support to the SMME Sector Saul Levin Chief Director Economic Development Department 1 Where does South Africa Stand? South Africa has legislation, a comprehensive policy framework and architecture to support small businesses with financial support, non-finance support (training, advice, mentorship), procurement, international linkages assistance, and technology support. South Africa also has an effective business environment including company regulation, legal system, banking sector, business infrastructure, private sector support services (e.g. accounting, HR, business consulting) etc. Are we making the impact? Questions of Duplication and lack of co-ordination? 2 How do we compare? Estimate on SMME support (ex procurement) combined National & National agencies: R3 billion; [included is sefa & SEDA combined: +-R715 million allocation p.a. + sefa R2billion for financing] (SA population: 50.5mil) Northern Ireland: Invest Northern Ireland +-R2billion (pop: 1.7 mil) UK: Growth Accelerator R2.4billion; Small Business bank R12billion; Business Link R2billion; + mentorship programmes, etc. (pop: 63 million) USA: SBA R14billion + R160 billion for finance programmes (pop 311 mil) South Korea: Small and Medium Business Administration R10.5billion + R30 billion for finance programmes (pop: 49.7 mil) 3 Impact Context of limited resources: Are we getting the impact for what we spend on Small Businesses? Advisory Committee established by Minister Patel to make recommendations on the impact of spending on small businesses in South Africa Deeper understanding of who and how much is being spent 4 What are the challenges? Gem 2011 report summarises it well: Literacy levels Skills gap Crime (including crime against business) Corruption Health of the workforce Labour market Infrastructure Large firm dominance Low rates of entrepreneurship (given our level of development and GDP) and government run entrepreneurship programmes not making an impact. “South Africa remains one of the more poorly-performing countries with regards to entrepreneurial activity – despite the fact that the country exhibits the factors which are conducive to entrepreneurial ventures, including government policies and programmes aimed at stimulating entrepreneurship.” (GEM 2011) 5 Policy Framework National Development Plan New Growth Path Industrial Policy Action Plan (IPAP) National Small Business Act 6 National Development Plan Establishing common ground and a long term vision of where the country needs to go Identifying objectives and setting actions to achieve those long term objectives Responds to many of the challenges that inhibit the SME sector: skills, economic infrastructure, costs of doing business, reducing red tape and corruption, labour market reforms, health care, a social safety net,