Creating an innovative climate for small, medium and large enterprises
The debate around enterprise development in South Africa is often skewed towards the establishment of new enterprises, however, we also need to realise that we have an equivalent responsibility to sustain existing small, medium and large businesses.
The need for sustainable enterprises can never be over-emphasised, especially because key industries which have been the key pillars of our economy are facing a number of challenges, some of which include strikes, declining production and profits??? All these are factors which pose a serious threat to the growth prospects of our economy. According to the findings of the 2012 Global Entrepreneurship Monitor (GEM), South Africa’s rate of established businesses is relatively low. The GEM report attributes the sluggish rate to various issues such as commercial and physical infrastructure, government policies, internal market openness and government programmes.
The despondency around the slow benefits of enterprise development was also expressed by the Governor of the Reserve Bank, during an address at the 26th annual Labour Law Conference. The Governor’s sentiments are not surprising, considering that South Africa started discussing the ???hot topic’ of entrepreneurship almost 20 years ago. The frustration is certainly growing and the truth is that various segments of our population, including entrepreneurs, are no longer interested in pure rhetoric intended action.
It would be unjustifiable to argue that nothing has been done to create an environment where businesses, big or small, can flourish. However, tough local and global economic conditions simply demand that we do more and be innovative to get ourselves onto the next level. The pressure to implement decisive and pioneering action is also growing due to the superb performance of peers across the East and Western parts of our continent.
The good news for South Africa is that we all still agree that a sustainable business environment remains the cornerstone to our efforts to accelerate economic growth. Unfortunately it’s not pure rhetoric that’s going to take us forward but ideas that have a potential to prosper beyond any imagination, and in simple terms, that means we need to innovate. As a country, we’ve certainly witnessed South Africans who are innovating at a global stage, influencing the manner in which our world works ??? think solutions such as PayPal. Our country remains on the cutting edge of technological solutions in the continent and we have one of the highest mobile telephony usages, however, we’re still lagging when it comes to introducing groundbreaking solutions for the necessary boom in enterprise development.
It’s been interesting to see the changing perception around the role that banks can and do play in enabling the country to build sustainable businesses. Initially, a banker couldn’t participate in any enterprise development discussion without being asked about the issue of funding. While funding remains a core offering by the banking sector, current activity shows that the sector’s contribution far exceeds immediate business interests.
Within FNB Business Banking, our plan is to go beyond simply providing transactional banking capabilities to being more helpful by introducing solutions that change the way clients do business. We believe that all the solutions we’ve introduced have added great value, and our business customers have recognised these efforts as demonstrated through their feedback which led to the accolade of FNB being SA’s Top Business Bank, as announced by Intellidex Investment Research. The report found that 77% of our clients gave FNB 5/5 when it comes to satisfaction levels. One is equally aware that the banking sector is one of many that plays, an instrumental role in building sustainable businesses but industries alone will never create the required enterprise development boom.
Questions around innovation also need to be posed to entrepreneurs, because in a competitive environment, small and medium enterprises stand a greater chance of losing against well established entities. Therefore, innovation becomes the key to sustaining one’s competitive edge. There’s very little doubt that the operating environment for businesses will persist to be tough. In fact, local and international economists continue to emphasise that the uncertain economic climate is likely to continue and this ultimately means that businesses could find it difficult to flourish.
One thing we should get used to as a country is the fact that the global spotlight will remain on us because we play such an important role in our continent. When the global community looks at rapidly growing economies such as Nigeria, questions will be raised about South Africa’s timid growth, which currently lingers around 2% to the Gross Domestic Product (GDP).
Even though time is against us, it’s undeniable that we have some of the building blocks to grow the pool of sustainable commercial businesses in the country. As shown in the 2013-2014 Global Competitive Index, our financial systems are among the best in the world and financial inclusion continues to be advanced through all sorts of means, including mobile telephony. Perhaps the time is now for our country to be less rhetorical about our challenges and start looking at meaningful, innovative action that will produce the desired results. We’ve done it across various sectors but now need to use the same energy to boost and sustain enterprises.
