Cllr LJ Matlou, Executive Mayor, Mopani District Municipality
Ms Brigette Backman, Managing Director: Sasol-ChemCity
Mr Richard Young, Head of Operations, Delegation of the European Union to South Africa guests
I’m delighted to be here this morning with you.
Poverty and unemployment continue to remain South Africa’s main social challenges.
Government promotes numerous poverty alleviation programmes and enterprise development initiatives and also works in partnership with several non-governmental organisations, foreign governments, and corporates.
It’s very important that government does this because we know that it’s in small to medium-size companies that most jobs are created.
This is what our National Planning Commission found. Small and medium-size companies contribute 40% of our GDP and account for 60% of all employment.
You see big firms destroy jobs to become more productive (Schumpeter’s “creative destruction”), while small firms need people in new jobs to scale up to become bigger enterprises. That is why they create jobs.
So this is where we should be focusing. And yet we know - according to Global Entrepreneurship Monitor - that our early-stage entrepreneurship is low in comparison with other similar countries.
However, we have a particular problem.
The South African economy faces, the National Planning Commission tells us, the challenge of the "missing middle". Many firms employ fewer than 10 people, and many employ more than 300 people, but not enough businesses employ between 10 and 300 people.
That is where the middle is in South Africa. And that is why projects like this hold out such promise.
Government provides an enabling environment for small to medium size enterprises, while the business and foreign donors provide financial and technical support to motivate social entrepreneurs and NGOs to expand and extend their social innovation activities.
In particular, the Department of Science and Technology (DST’s) Science and Technology for Social Impact programme partners with these organisations to enhance social impact.
Do you know just how rich South Africa is in multi-stakeholder organisations involved in innovative social-development programmes?
Let me give you a few examples.
South African Breweries launched its KickStart Enterprise Development Initiative as a poverty alleviation programme. It has subsequently become a platform to stimulate sustainable enterprise development.
The Anglo-Zimele enterprise Development Initiative, an initiative of the Anglo-American Corporation, has developed a highly effective business formula that is also being emulated by numerous other organisations throughout South Africa. The initiative supports about 688 profitable businesses that employ some 12,484 people.
It has become a catalyst for emerging black business, helping to address the historical inequalities of South Africa’s past and meeting the legislative requirements that are aimed at uplifting and empowering deprived communities.
The Gordon Institute of Business Science (GIBS) runs a network platform for innovative and creative individuals or organisations who work towards the social upliftment of their communities.
Township Patterns uses a business model based on fair trade using raw materials and township flair to make creative designs for the commercial market, thereby leading to job creation. Mhani Gingi Social Entrepreneurial Networks focus on developing indigenous models of stockvels into effective business models that are supported through various networks on business training and skills development.
So they are many and multi-facetted and filled with promise.
The Nkowankowa project falls under the DST’s Essential Oil and Aquaculture Clusters in our social development branch. It’s our flagship project.
It’s a science-based project and that is why the DST promotes it.
Science is the building block of future technological breakthroughs. Basic science research creates revolutionary new ideas.
It’s not easy to turn ideas into money. It’s not easy to take science to market.
It’s a lengthy process but it’s a process that has taken us from the ‘cradle of human kind’ to where we are today.
I am immensely pleased to see that we can help to make this process happen here in Nkowankowa.
