Tuesday, 27 October 2015

BizNews picks up my article on reforming our innovation and venture capital ecosystem

BizNews, owned and run by veteran financial journalist Alec Hogg, ran my piece on what SA needs to do to stimulate and support innovation and high-growth businesses. Click here to read it.

South Africa lags badly in this sector - venture capital financing innovation to stimulate and support new businesses and which create large numbers of jobs.

Is government listening?

There are moves afoot, but they do not go far enough.

Government has mooted the National Empowerment Fund be transferred from the DTI to the IDC, which reports to the Department of Economic Development - see Linda Ensor's article in Business Day. But the Small Enterprise Finance Agency, Sefa, is in the same stable, though it reports to the Department of Small Business Development, so there is a big danger of overlapping and conflicting mandates.

Where will the National Venture Capital Fund, a key DA policy proposal, fit into this scenario? It seems government has fudged the issue, with only a half-baked proposal on the table.

There needs to be root and branch reform of South Africa's development finance institutions (DFIs), which includes streamlining the economic ministries to avoid duplication and policy uncertainty - these include DTI, DSBD, EDD and  Labour for starters.

The DA is pressing for these reforms and will keep beating this drum until government listens, or is cast into the wilderness, leaving us to implement lasting policy solutions.

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