EMMA MOUTON AND HENRY WISSINK
In a recent article, Dhivana Rajgopaul writes about the importance of entrepreneurship in the context of the increasing and concerning unemployment rate in South Africa.
She writes that many South Africans have turned to entrepreneurship out of necessity and provides valuable advice and recommendations on what it takes to become a successful entrepreneur.
Apart from the essential qualities and traits that entrepreneurs should possess or develop, having the right approach to addressing market needs is crucial for running a successful business.
Key elements include effective planning, securing appropriate financing, staying attuned to market trends, maintaining realism, and seeking guidance from mentors or role models throughout the entrepreneurial journey.
All of this is undoubtedly important, and numerous master-class opportunities are available to help aspiring entrepreneurs become well-prepared and develop essential skills for success in a challenging environment.
It is critical to address “bottom-line” turnover and profit margins to thrive as an entrepreneur. Without the right mindset, training, and increased experience in the business and entrepreneurial world, successful entrepreneurship is unattainable.
Temporary and attractive lifestyles displayed by unethical “high-flying” tenderpreneurs can be misleading. Authentic entrepreneurs adhere to laws, rules, and provisions designed to promote entrepreneurship and create opportunities for individuals who are willing to commit and remain resilient and agile in pursuing dreams.
The idea of BBBEE has always aimed to transform the economy and increase access for many younger and aspiring South Africans. The goal has been to close gaps, reduce unemployment, alleviate poverty and address ongoing inequality.
However, this strategy appears to have had limited success in addressing the unemployment issues, for various reasons that are beyond the immediate scope of this article. Nevertheless, if these policy measures are applied, monitored, and evaluated with the sole purpose of increasing access for young graduate entrepreneurs in small and medium-sized enterprises, progress can be made in changing the unemployment landscape in South Africa.
In addition, apart from the BBBEE policy and measures, we want to argue that specific and targeted industry and enterprise policies must be consistently monitored and evaluated to promote entrepreneurship and protect local economies.
Broad policies and declared intentions may not address the unique challenges faced by different sectors or regions. Specific measures (instruments) need to target the particular needs of local industries, such as access to finance, market development or skills training, thereby providing more effective support for entrepreneurs.
Markets do not always function perfectly. Specific policies can correct market failures, such as the lack of access to capital for start-ups, inadequate infrastructure, or insufficient market information. Local and small businesses often face competition from big or established multinational companies with significant resources.
Directed policies, like import tariffs or local subsidies, can help level the playing field by providing small businesses with a competitive edge or financial relief, which is essential for their survival and growth.
Entrepreneurship often requires a conducive environment to thrive, including access to resources, networks, and support systems. Specific policies can foster innovation by creating incubators, accelerators, or research grants that help entrepreneurs develop and bring new ideas to market.
Industry-directed measures can promote economic diversification by specifically supporting emerging sectors and industries. This is particularly important in economies that are overly reliant on a few sectors, as diversification can reduce vulnerability to economic shocks and create more resilient local economies. Such policies can also help preserve and promote local culture and traditions, especially in industries like textiles and fashion.
Supporting local artisans and businesses will also help to maintain cultural heritage and foster community pride. It also assists local businesses to adapt to changing market conditions, environmental regulations, and technological advancements, which will ensure that they remain competitive and viable over time.
For example, specific and targeted policy interventions in South Africa were introduced to protect and support its local textile and fashion industry. The South African government has increased import tariffs on certain textile products and has engaged in trade negotiations and agreements that seek to protect its local industries from unfair competition.
This intervention aims to make imported goods more expensive and less competitive compared to locally produced textiles. By doing so, it encourages consumers and businesses to buy South African-made products, thereby supporting local manufacturers.
Very recently, tariffs on certain types of clothing and textiles have increased up to 45%, based on the value of the imported goods predominantly from e-commerce sites.
This significant increase aims to make imported fashion items more expensive, thereby encouraging consumers and businesses to buy domestically produced goods, as well as preventing the dumping of low-cost textile and fashion items into the South African market, which can harm local industries.
Local content requirements for government procurement and other major contracts have also been added to these measures. This means that a certain percentage of materials or products used in public projects must be sourced from South African suppliers.
This policy helps to stimulate demand for local and quality textiles and fashion products, and also foster a circular economy fashion industry for small entrepreneurs who engage in the re-commerce market. Various programmes and grants are available to support the growth of local textile, footwear and leather businesses that are starting to yield positive results.
These initiatives may include funding for modernisation, training programmes for skill development, and marketing support to assist local businesses to compete both domestically and internationally. It is critical that policy instruments such as these are constantly evaluated for their impact.
It requires ongoing monitoring and evaluation of policies and their instruments or measures, and excellent policy research and analysis that assesses the nature and extent of policy issues. It provides the evidence-based support for devising policy instruments and committing public resources on a long-term basis. This emphasis on improving policy management also requires ongoing collaboration between government, industry, and academia to produce good governance for success in various sectors.
Henry Wissink is an emeritus professor of public governance at the UKZN. He is also the co-editor and author of the 2024 edition of a widely used postgraduate text: ‘Improving Public Policy for Sustainable Development Impact in the Digital Era’. He writes in his personal capacity.
Emma Mouton is a PhD student and an independent fashion trend forecaster and researcher with a special interest in sustainable production and consumption in the local fashion and textile industry. She writes in her professional capacity.
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