Benefits of Enterprise Development in SA

Enterprise development: A tool for poverty alleviation

Economic growth is key to addressing unemployment, gender equality, health and other povertyrelated issues worldwide. Enterprise development (ED) is an important tool and essential element to economic growth. 

Enterprise development: An inexpensive way to achieve BBBEE

Enterprise development is an inexpensive way to implement broad based black economic empowerment (BBBEE) but SEAF 2009 reports that it is not often seen as an option. Claasen 2006 states that Enterprise Development (ED) where big companies offer operational assistance to small, black-owned enterprises, is also a core component of the SA Government’s BBBEE strategy and globally recognised as an effective way of reducing poverty.

The impact of enterprise development in South Africa

Enterprise development is defined as the act of investing time and capital in helping people establish, expand or improve businesses. Enterprise development helps people to earn a living; it helps them out of poverty; and it leads to long-term economic growth for themselves, their families and their communities.

Not only is enterprise development one of the elements of BBBEE, it is also accepted at a global level as an effective way to combat poverty.  

Enterprise development

In 2016, 27% of the adult population in South Africa was unemployed. According to The National Development Plan, 90% of the approximately 11 million jobs that need to be created by 2020 will be through small businesses.

However, according to The Gordon Institute of Business Science, 80-90% of new businesses fail in the first two years, with some of the reasons for failure being lack of access to markets, capital and business skills.

A panel discussion held at Trialogue’s 2017 Business in Society Conference unpacked some of the key elements needed to support enterprise development in South Africa.