Shaping the next generation of entrepreneurs

Clement Chinaka, MD of Old Mutual Corporate.

The importance of a thriving small business sector cannot be overstated, as small and medium enterprises (SMEs) employ approximately 60% of South Africa’s workforce and contribute significantly towards economic growth, reportedly around 34%1.

How big businesses and corporates can assist in creating an environment that will promote this sector and propel the country’s future entrepreneurs was the conversation topic at the recent Old Mutual Corporate Wisdom Forum Gala Dinner held in Johannesburg.

Speaking at the event, Clement Chinaka, MD of Old Mutual Corporate, referred to the recent protest action across South Africa, which highlighted the country’s significant economic growth challenges. “We urgently need sustainable solutions that will be effective in growing the national economy in order to raise our global competitiveness ranking, create much needed employment opportunities, and encourage broad economic access, participation and contribution by more South Africans.”

Chinaka said that business partners in the South African economy should take on a larger role in developing the new generation of entrepreneurs. “We need to assist entrepreneurs who are in tune with the local business environment and have the ability to identify opportunities and leverage these in order to grow South Africa’s economy.”

The findings of the 2015 Old Mutual Corporate SME Employee Benefits Monitor reveal that many small and medium businesses believe they are unable to compete with larger corporates, thereby confirming big businesses’ responsibility to support the growth of smaller businesses.

“Given that larger and more established businesses have overcome many of the challenges associated with small business, such as access to funding and lack of business or management skills, we have the ability to advise and mentor emerging entrepreneurs.”

Chinaka added that promoting and enabling the next generation of African entrepreneurs is both a business and moral imperative. “The role a thriving SME culture can play in South Africa’s economy and its society is enormous.”

He points to the following scenario. “An entrepreneur identifies an opportunity and starts a business. If successful, the benefits begin to flow and jobs are created. The new business and its employees pay taxes, thereby contributing to Government revenue and increasing the national fiscus. Indirectly, the new business will also ease social pressures, as the new employees will no longer need to depend on the state for welfare benefits. Furthermore, the entrepreneur and employees will spend their income across a range of sectors, thus improving the country’s economic activity.”

Working closely with more than 8 000 businesses of all sizes across South Africa, Old Mutual Corporate identified a unique opportunity to create a platform where a range of perspectives and insights could be shared. Among the leading global and local entrepreneurship thinkers and practitioners at this year’s Wisdom Forum was Natasha Sideris, founder of Tasha’s, a chain of contemporary restaurants across South Africa and Dubai, and Matsi Modise, Managing Director of the SiMODiSA Association, an industry association committed to accelerating entrepreneurship.

Modise, a national executive director of the South African Black Entrepreneurs Forum, believes there is opportunity for improved synergy between corporates and SMEs. She says that if harnessed correctly, these partnerships have the potential to ignite the local economy.

“Broadening the market for small businesses is key and corporations have a huge role to play in building, supporting and investing in the entrepreneurship ecosystem of our country. The relationship however should always strike a win-win balance. There are many examples of corporates who have invested well in small businesses and received good socio-economic returns.”

Providing an international perspective at the event was Stephen Archer; founding partner of UK business strategy consultancy Spring Partnerships, and Zev Siegl, co-founder of Starbucks.

Siegl, a self-proclaimed serial entrepreneur, says that a mentor is crucial to the growth of a new business, as a mentor can point out pitfalls and provide guidance. When launching Starbucks, he approached a popular coffee shop owner in a different city to be his mentor. He maintains that mentor made a huge difference in both his personal life and the success of his business.

Chinaka summed it up: “By assisting entrepreneurs we enhance the efficiencies of markets and industries for the good of all South Africans.”