With the excitement of World Cup 2010 subsiding, the unanswered question has remained whether the event had a positive impact on South African business. Small and Medium Enterprise (SME) Survey 2010 reveals that the overall impact on small, medium and micro enterprises was negligible. And that is largely a factor of the policies of soccer’s governing body FIFA and the complicity of government.
That is emerging from SME Survey 2010, sponsored by the National Youth Development Agency (NYDA). Principal researcher Arthur Goldstuck says that it is very easy to define the impact of the World Cup on small business. “In short: there was little in it for the SME.”
That doesn’t mean the world cup wasn’t a success or that it didn’t bring benefits to South Africa as a whole, Goldstuck hastens to add. “Rather, what is clear is that FIFA locked down the economic benefits, making them available only to selected service providers. In effect, the little guy was frozen out almost completely.”
Before the event, SME Survey showed that 86 percent of small businesses expected the world cup to boost business in general. However, just 45 percent anticipated any benefit to their own businesses. This year’s research bears that out: 92 percent believed the event as a whole was a success, while 42 percent felt that there was adequate support from business advice structures. “The significance of this – that expectations were closely matched to the outcome –is that the South African SME owner understands his or her business and its position in the macro-economy very well. Small business was not swayed by the hype,” Goldstuck notes.
“Expectations were based on the kind of support which was accessible to the SME. Those who got support, benefited from it,” Goldstuck says. This finding confirms the value of general support, which reinforces the ability of the SME to plug into and provide services to an event of this magnitude.
However, support did not translate into success.
The question which best sums up the massive obstacle represented by FIFA’s regulations is that just 14 percent of SMEs say the World Cup had a material contribution to their success. In other words, just over one in ten small businesses felt the event had any direct impact on their business.”
What is also abundantly clear, Goldstuck adds, is that those organisations that received support from agencies like the NYDA, benefited more. A higher percentage (19 percent) of emerging businesses saw some benefit. At the same time, lower proportion of emerging businesses (75 percent) saw FIFA rules as an obstacle, perhaps because their informal status often meant they could operate a little outside of those strict regulations.
“The fact that entrepreneurs who acquired support benefited more gives us confidence that NYDA business development programmes such as the business consultancy services voucher programme which offers young entrepreneurs access to business development support for just R200, are definitely enhancing the entrepreneurs business. In addition, striking partnerships with some of the country’s smallest and biggest organisations has enabled us to support more young entrepreneurs. For instance, by partnering with Companies and Intellectual Property Registration Office (CIPRO) we have been able to enhance accessibility of CIPRO products, particularly registration of businesses for young entrepreneurs that the NYDA serves,” says Steven Ngubeni, NYDA CEO.
The implication, Goldstuck says, is that government should perhaps pay less lip service to enterprise development and make more practical interventions to share economic benefits – when next an event requiring major business input comes to South African shores.
Drilling down into the vertical sectors and their direct benefits from the world cup, it was found that specific sectors that expected major benefits but were let down included transportation, manufacturers and engineering firms, where only 10 percent felt direct benefit, construction, with only 8 percent benefiting, and retailers (13 percent). The sector that saw the least benefit was printing and publishing, at a mere 4 percent. On the other hand, 26 percent of respondents in the advertising industry, 30 percent in hospitality and accommodation and 30 percent in the government sector said they had benefited – a lot higher, but still less than a third of respondents in those sectors. “This confirms the contention that FIFA had firm control of which businesses could participate in the benefits of the spectacle – and small business was certainly not invited to the party,” Goldstuck asserts.
But were small businesses able to position themselves to take advantage of the world cup? Only 25 percent say they were. Did the regulations from FIFA have a role to play in that? 81 percent said yes. “The regulations were designed to control the economic benefits of the event; for example, in the print and publishing industry, 98 percent of respondents say the rules shut them out,” notes Goldstuck.
SME Survey 2010 is sponsored by the National Youth Development Agency. Visit http://www.smesurvey.co.za to find out more.
