President Jacob Zuma spoke this week about rapidly increasing the amount of black industrialists in the country, which he hopes can boost the manufacturing sector, promote economic transformation and increase growth throughout the economy. Essential to economic growth, however, is the small business sector. GREG NICOLSON looks at the situation.
“Small business is big business,” Small Business Minister Lindiwe Zulu told the Global Entrepreneurship Congress in Milan last week. According to her spokesperson, she linked high unemployment, poverty and inequality to small business development and the need for “bold and far-sighted interventions”.
Clearly interventions are needed. After her appointment as minister, Zulu consulted widely across the country and presented worrying statistics. Small businesses have a 37 percent chance of surviving for four years and only a nine percent chance of making it 10 years. In their first year, 70 to 80 percent of small businesses fail.
“A healthy SMME sector has the potential to make a massive contribution to the economy by creating more employment opportunities and generating higher production volumes. In 2007, the contribution of SMMEs to GDP was 35 percent. Targets for future contributions to GDP range from 60 percent to 80 percent over the next 10 to …
Source : Daily Maverick