Presentation to thePortfolio Committee on Trade and

Industry

4 February 2005

Rationale for reviewing the 1995 White Paper

• Build on the direction set by Government in 1995 Successful in identifying needs of SMMEs Focus on building capacity of institutions Entrepreneur at the centre

Apply lessons and experiences learned in the past 10 years

Embrace the broader policies and reforms of Government

- IMS LED

- BEEUrban Renewal

- Coops IRDS

Provide a 10 year Development Framework

Changing Small Business Environment

• Increasing competition

• Rise of Asian economies and exports

• Trade liberalisation

• ICT revolution: Spread of the impact

• Expansion of service sectors

• “Second economy” increasingly significant

• Differentiation of support policies

Highlights of the 10 year review

SA development frameworks

• Stabilising macro-economic scene with low growth

• National skills-development strategy

• National manufacturing strategy

• BEE and transformation frameworks

• Spatial development frameworks

• Sector development strategies

• General acceptance of the significance of SMMEs

Defining & Classifying the Small Business Sector

1. Restating the definition in the Small Business Act(1996)

Small business means a separate and distinct business entity, inc.co- operative enterprises and non-governmental org, managed by one owner or more which, incl,its branches or subsidiaries, if any, is predominantly carried on it any sector of the economy mentioned in columns 1 of the schedule and which can be classified as a micro-, a very small, a small or medium enterprise by satisfying the criteria mentioned in columns 3,4 and 5 of the Schedule opposite the smallest relevant size or class as mentioned in column 2 of the Schedule

Vision

The Integrated Small Business Development Strategy envisages:

• A South Africa with a vibrant and competitive small-enterprise sector with enterprises that grow in both turnover and employment.

Objectives

• Increase the contribution s small enterprises to the growth of the South African economy

• Create an enabling environment for small enterprises, with a level playing field between big business and small enterprises, and reduce disparities between urban and rural enterprises

• Create sustainable long-term jobs in the small-enterprise sector

• Ensure equitable access to business opportunities and support in terms of race, gender, disability, age, geographical location and sector

• Increase the competitiveness of small enterprises and the business environment so that they are better able to take advantages of opportunities emerging in national, African and international markets.

Targeting for support

• Micro enterprises Improve productive capacity Graduation towards formalisation Urban and rural

• Small enterprises in growth sectors ICT Fashion wear Designer furniture Biotech Tourism services Marketing Business services

• Black owned small and medium enterprises Management expertise Global networking Access to finance Export Readiness Business linkages Procurement

Strategy Pillars

Pillar 1

Promoting entrepreneurship

Pillar 2

Creating enabling environment

Pillar 3

Enhancing competitiveness &

capabilities at enterprise level

Strengthen national awareness about the critical role of entrepreneurship

Maintain small-business-sensitive business regulations

Strengthen managerial, business and technical skills

Promote alternative focus on ownership

Improve access to finance Facilitate improved quality, productivity and competitiveness

Expand franchise opportunities

Strengthen access to markets via procurement, exports and business linkages

Support technology transfer, incubation and the commercialization of business services

Strengthen business associations and networks

Facilitate the availability of business infrastructure and premises

Expand SMME-focused sector-support agencies

Increase the effectiveness of enterprise support

Pillar 4

Cross-cutting foundation services

Information, research, monitoring and evaluation

• Establishment of inter-department and Provincial

coordination structures

• Strengthening capacity of the dti to coordinate

interventions

• Establishment of non-statutory National Small Business

Advisory Council

• Establishment of SEDA to integrate Government small

business services through localized access points

• Establishment of an APEX Fund to provide micro finance

Institutional Reforms

• Launch of Seda

• Annual Review and Summit

• Franchising Legislation

• Small business register

• Further Integration of other sectoral small business

programs

• Revision of Schedule in Small Business Act

• Publication of Base-line study on the Profile of Small

Business in SA

• Midterm review 2009

Action Plans

Strategy MapImplementation

/ Strategy

The dti

coordinating

all Government

Departments

Small Enterprise

Development

Agency

Public private

partnerships

Provincial

Directorates

Local Agencies

Key performance

Areas

Increased

Contribution

to GDP

Increased

Contribution

to employment

Increased

Contribution

To exports

Conducive

Regulatory

environment

Reliable

statistics on

small business

Programs

Export

Readiness

Manufacturing

Advice

Technology

Incubators

BRAIN

Franchising

Support

Community

Public Private

Partnership

Vision 2014

Vibrant and

Competitive

Small Business

Sector with

Enterprises of

all sizes

Impact Outcomes Outputs Processes

Next Steps

Cabinet approval early 2005

Publication of documentation 2005