The Integrated Small Business Development …

1 Unlocking potential in an enterprising nation The Integrated Small Business Development strategy in South Africa 2004 - 2014 Department of Trade and Industry October 2003 Integrated Small Business Development strategy Government of the Republic of South Africa 2 TABLE OF CONTENTS Abbreviations .. 5 Executive 7 Foreword .. 12 1 13 The purpose of the Integrated Small Business Development strategy .. 13 Defining the Small Business sector and setting targets for 13 Definitions .. 14 Targets of Development support .. 15 A vision for the South african Small Business sector.

2 15 Promoting 16 Unlocking potential through better Business environments .. 16 Promoting more competitive Small businesses .. 16 2 The context of Small Business Development in South Africa .. 17 The national contribution and challenge of Small Business Development .. 17 Small Business markets and the restructuring of state assets .. 17 Changing labour relations and the Small Business sector .. 17 Small businesses and the ICT revolution .. 17 Small businesses and HIV/AIDS .. 17 Wider objectives and thrusts of Small Business 18 South african Small Business and the african 18 Development challenges of a globalised 18 Responding to the current state of the Small Business sector.

3 19 Evolution of the Government s response to the Small Business 19 Lessons learnt in Small Business Development .. 20 Sharpening the focus of policy .. 20 Integrating Small Business Development and black economic empowerment .. 20 Poverty Alleviation .. 21 Streamlining the institutional framework for Small Business 21 Differentiating between sectors .. 21 Small businesses and their local 22 Responding to entrepreneurs with special 22 The role of government .. 22 3 Objectives and principles .. 24 Objectives of the Integrated Small Business Development strategy .. 24 Fundamental principles.

4 24 Find a balance between the main roles of 24 Closely integrate Small Business Development with the broader macro economic and Development frameworks of government .. 25 Integrated Small Business Development strategy Government of the Republic of South Africa 3 Respond to the diverse needs, capacities and opportunities found in the Small Business sector with market-oriented and strategically focussed 25 Connect national Small Business Development interventions with those at provincial and local levels .. 25 Holistic support services .. 25 Small Business as a vehicle for social Development .

5 25 Small Business as a mechanism for black economic 26 Market-oriented Small Business Development .. 26 Small businesses and the formal economy .. 26 Inter-firm cooperation and collaboration .. 26 Strategic public expenditure in the Small Business sector .. 26 The need for streamlined, market-oriented and sustainable institutions .. 27 Targeting support .. 27 Micro enterprises: Building the base of the Small Business sector .. 28 Small Business in high-growth sectors .. 30 Black owned and managed Small and medium enterprises .. 31 5 Support strategies for Small Business 32 Promoting 32 National entrepreneurship promotion 32 Creating an inter-ministerial response to the Development of 33 Expanding franchise opportunities.

6 34 Better access to information and advice .. 35 Strengthening Business associations .. 36 Unlocking potential through better Business environments .. 36 Small Business -sensitive regulations .. 37 Improving labour relations in Small 37 Access to 38 Increasing the effectiveness of 39 Promoting more competitive Small 39 Infrastructure facilities .. 39 Technology transfer and incubation .. 40 Access to finance .. 41 Access to appropriate 42 Increasing research capacities and improving the dissemination of results .. 43 6 The institutional framework for Small Business 45 National Government.

7 45 The National Small Business Advisory 46 Small Business Development service institutions .. 46 Small Business finance 48 Provincial government authorities .. 48 Integrated Small Business Development strategy Government of the Republic of South Africa 4 Local government authorities .. 48 Non-government organisations and community-based organisations .. 49 Education, training and research institutions .. 49 Business sector associations .. 49 Private Business service suppliers .. 50 Towards effective 50 International 50 7 Implementation, monitoring and review Small Business Development .

8 51 Resource mobilisation and allocation .. 51 National government as funder of Small Business support .. 51 Provincial authorities .. 51 Local authorities .. 51 Facilitating self-help and cost recovery .. 52 Spreading financing responsibilities .. 52 Maximising overall resource inputs .. 52 Propagating the new 52 Institutional realignment .. 53 Setting performance 53 Mid-term review (2009) .. 53 Integrated Small Business Development strategy Government of the Republic of South Africa 5 Abbreviations AGOA african Growth and Opportunities Act BEE Black economic empowerment Black Economic Empowerment Commission BRAIN Business Referral and Information Network CBD Central Business District CBO Community-based organisation CCs Close corporations CGIC Credit Guarantee and Insurance Corporation CSIR Council for Scientific and Industrial

9 Research Director-General DBSA Development Bank of Southern Africa DPLG Department of Provincial and Local Government DTI Department of Trade and Industry EMIA Export Marketing and Investment Assistance Scheme EU European Union FET Further Education and Training GDP Gross Domestic Product GTZ Gesellschaft f r Technische Zusammenarbeit HDI Historically Disadvantaged Individuals HRD Human Resource Development HSRC Human Sciences Research Council IDC Industrial Development Corporation ICT Information and Communication Technology LBSC Local Business Service Centre LED Local Economic Development LIP Local Industrial Park MAC Manufacturing Advice Centre NAFCOC National african Chamber of Commerce NAMAC National Manufacturing Advice Centre NGO Non-governmental organisation NPI National Productivity Institute NRF National Research Foundation NSBC National Small Business Council PDI

10 Previously disadvantaged individual RSA Republic of South Africa SABS South african Bureau of Standards SADC Southern african Development Community SARB South african Reserve Bank SAWEN South african Women Entrepreneur Network SB Small Business Integrated Small Business Development strategy Government of the Republic of South Africa 6 SBDC Small Business Development Corporation SETA Sector Education and Training Agency SMEDP Small /Medium-Enterprise Development Programme SMEs Small and medium enterprises SMME Small , medium and micro-Enterprises SPF Sector Partnership Fund SSA Statistics South Africa TAC Tender Advice Centre TIDP Trade and Investment Development Programme TIPS Trade and Industrial Policy Strategies UK United Kingdom USA United States of America Integrated Small Business Development strategy Government of the Republic of South Africa 7 Executive Summary The Integrated Small Business Development strategy (ISBDS)