smme development and the role of local government presented by: dr sandra musengi-ajulu
TRANSCRIPT
SMME DEVELOPMENT AND THE ROLE OF
LOCAL GOVERNMENT
Presented by: Dr Sandra Musengi-Ajulu
Presentation outline
Introductory remarks
What we can learn from other countries
Role of local government in facilitating SMME creation and growth
Concluding remarks
Introductory remarks
Source: Khrystyna Kushnir, Melina Laura Mirmulstein, and Rita Ramalho World Bank, 2010
Introductory remarks
SMME sector is a significant player in transforming economic development landscape and has significant financial and non-financial support
Why does South Africa have a low entrepreneurship rate? Entrepreneurial intentions rate Business enabling environment Competitiveness & Cost of doing business in South Africa as levers for
SMME and entrepreneurship development
Need to also recognise sector’s challenges: Access to finance Access to markets Regulatory constraints
Introductory remarks
Different types of entrepreneurship influences the design of the institutional framework to be designed Productive vs. unproductive forms of entrepreneurship
The institutional framework is usually representative of the country’s entrepreneurship ecosystem that comprises of: Government, culture, success stories, human capital, financial
capital, entrepreneurship organizations, education, infrastructure, economic clusters, networks, support services, early customers, leadership.
Most problematic factors for doing business in South Africa (2010-2011)
Source: The Africa Competitiveness Report 2011
What we can learn from other countries
Initiatives include promoting small business development by implementing entrepreneurship awareness programmes
Creating business linkages through City investment plans/initiatives
Providing advisory services to small business
Strong relationships with business formations
Strong service delivery leads to highly competitive Cities
City of Tshwane 2055 Preliminary game-changing conceptual framework
Source: Tshwane South Africa’s Capital 2055 Discussion Document, July 2012
Revisiting the role of local government in supporting SMME development wrt
Tshwane 2055
Ensure service delivery The most important role that the City has to play to promote its economic development agenda is
to provide deliver consistent, high quality services
Leverage mandate of City regulatory environment Respond to challenges by making use of by-laws to create demand and overcome broader City
challenges e.g. climate change
Focus on becoming a globally competitive City Globally competitive cities encourage social inclusiveness, attract business activity, and generate
possibilities for greater economic participation and job creation
Leverage City assets & economic opportunities Enabling of access to use of productive assets and other infrastructure owned by the City under
favourable conditions – investment in economic spaces (e.g. upgrading of less formalized economic spaces)
Revisiting the role of local government in supporting SMME development wrt
Tshwane 2055
Alignment to Gauteng City Region
Gauteng Provincial Government interventions in terms of GCR economic development: Removing obstacles and bottlenecks that impede the efficient operation of a networked
economy. Encouraging innovation, research and development and the knowledge economy. Increasing capacity and capabilities which in turn increases opportunities for increased
income. Strengthening localized factors of production and economic development to ensure
increased competitiveness and productivity. Ensuring optimal resource reallocation and sustainable resource usage.” (GEGDS, 2010:31)
National Development Plan 2030, New Growth Path
SADC, BRICS
Concluding remarks
Developmental state focus, considerations for CoT might be if emphasis should be on: Changes in income distribution or economic growth Stakeholder aspirations or leverage on real economic strengths Developmental projects or economic growth-related projects Competitiveness enhancement or equitable development Small business enablement or big business growth Targeted interventions aimed at creating economic development
opportunities for the poor or support for more promising enterprises or clusters that are potential drivers of economic growth
Balancing SMME development and promotion of entrepreneurship Amplify area-based economic development
Discussion