Entrepreneurs worlds apart

This opinion piece appeared in the Cape Argus on Thursday 23rd October.

Earlier this month I attended two events which at their core aimed to achieve the same thing – entrepreneur development and job creation, but which illustrate the huge gulf that exists in South Africa between the worlds of the informal township entrepreneur and the connected tech entrepreneur. They also gave me an insight into the political and economic terrains in these two worlds, where the language used seems to have been drawn from completely different dictionaries, written with contrasting ideologies and politcial imperatives in mind.

The first event was the Township Revitalisation Summit in Orlando Stadium, Soweto, convened by Gauteng Premier David Makhura. The second was the SiMODiSA Start Up SA conference at the Cape Town International Convention Centre. The two venues immediately set the scene for a dichotomous relationship.

Dr Thami Mazwai and me in sync on the Entrepreneurial Ecosystem

Thami Mazwai's column in today's Business Day pays me the compliment of quoting my recent article about South Africa's Entrepreneurial Ecosystem.

To quote Dr Mazwai: "Comments by Democratic Alliance shadow small business minister Toby Chance in the Financial Mail of October 9, underscore the urgency with which new Small Business Development Minister Lindiwe Zulu must undertake her mandate."

He goes on to say: "As Chance points out, small business development thrives in an ecosystem approach in which all play their respective roles. Our past was premised on silos in which the government did its own thing, the universities did theirs, the Setas blithely went their own way, the chambers had their programmes and the private sector prided itself on its market approach. This has simply not worked and the evidence, continuing unemployment and inequality, is there for all to see."

BEE polarises SA - letter to Business Day

On Thursday Business Day published my letter headlined "BEE polarises SA" - read it below or on BDFM here.

Let me know what you think. The DA is submitting our response to the new BEE codes and we need your input.

Is it time BEE was phased out completely, or do we need new ways of redressing the inequities of the past that also incentivise the creation of new businesses and jobs? This is an important debate that will not go away.

"Last Friday, I was a panellist at the SiMODiSA Start Up SA conference in Cape Town where several hundred representatives of SA’s “entrepreneurial ecosystem” gathered. 

We listened to pitches from aspirant entrepreneurs. At least four were delivered by two people — one black and one white. Assuming they hold a 50-50 stake in their business, under the new Broad-Based Black Economic Empowerment (BEE) codes, they would get a Level 4 rating. If the black entrepreneur shed his white partner, however, he would get a Level 1 rating, leaving his former partner with a Level 5 rating at best.

It would be hard to imagine a more perverse and socially polarising piece of legislation. Everyone I spoke to, of whatever hue, strongly believed the BEE regime in SA had to change. The African National Congress simply does not get entrepreneurship."

Toby Chance, MP

Democratic Alliance shadow minister for small business development

Appearance on the Classic Business Panel: The Small Business Debate

Yesterday I was on the panel in the Small Business Debate on Classic FM hosted by Michael Avery. Co-panellists were Leon Louw, Executive Director of the Free Market Foundation, and Stiaan Klue, Member of the SMME Policy Colloquium Committee and CEO of the SA Institute of Tax Practitioners. 

We had a lively debate which focused on the performance of the Department of Small Development and the government's attitude to small business in general. Most of our comments were critical, thoughwe all expressed our belief that this was a vital area for South Africa to get right if we are to create the jobs the country needs.

You can listen to the podcast here - scroll down to Segment 9 at the bottom of the page and click on the link.

Press Statement on BEE Codes of Practice

Democratic Alliance joint press statement by
 

Geordin Hill Lewis MP
DA Shadow Minister of Trade and Industry, and
Toby Chance MP
DA Shadow Minister of Small Business Development

DA will make extensive submissions to amend BEE Codes of Practice

14 October 2014

Release: immediate

The Democratic Alliance notes the release of the draft BBBEE Codes of Good Practice by the Minister of Trade and Industry, Rob Davies, for public comment. 

The DA will submit extensive proposed amendments to the Codes, during the public comment period which ends on 14 November 2014.

The Codes, as they are currently drafted, will not achieve the stated objective of preventing fronting. They do not promote redress or decrease inequality, and they certainly do not help to grow the economy or create jobs. In fact, in many respects, they will achieve the opposite of what the ANC says they want to achieve. 

New B-BBEE codes will hurt small business

Today's Business Day carries an article about the revised Broad-Based Black Economic Empowerment Codes of Good Practice for Exempted and Qualifying Small Enterprises which quotes me extensively - read it here.

My point can be summed up thus: the DTI is obsessed with remodelling the racial composition of the cake, while the Department of Small Business Development is (or should be) interested in growing the size of the cake. These aims inevitably come into conflict.

As I point out, a 50/50 partnership in a new business between a black and a white person would give it a level 4 rating. This is crazy! Surely we should be encouraging start-up businesses whatever the colour of their founders.

Opinion piece in the Financial Mail - Leadership required for our entrepreneurial ecosystem to thrive

This article appears in this week's edition of the Financial Mail - read it here in the magazine or below.

 

The formation of the Small Business Development ministry has focused the minds of everyone concerned about South Africa’s weak economic growth and the role small and medium enterprises (SMEs) have in revving it up.  

A buzzword gaining traction in small business development circles is the “entrepreneurial ecosystem.” By this is meant the totality of activities, enablers, conditions, stakeholders and incentives that make up the environment in which entrepreneurialism can exist and thrive. By all accounts the ecosystem in South Africa is under-developed, fragmented and lacking leadership.