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Established Business Ownership Rate: Percentage of 18-64 population who are currently owner-manager of an existing business i.e. owning and managing a running business that has paid salaries, wages or any other payments to the owners for more than 42 months Source: Global Entrepreneurship Monitor. http://www.gemconsortium.org/data/key-indicators
Small business, poverty and inequality in south africa uct
5 August 2015
Presented at: Understanding and Engaging with Poverty and Inequality
in South Africa 3—7 August 2015, Cape Milner Hotel Cape Town
One million new small business? Five million jobs by 2020?
More Employers = More Jobs
National Development Plan Takes a Similar Approach
Ownership Rate for
2014 is 2,68%. Out
of a sample of 69
countries, we rank
So how do we create many
small businesses, in an
economy with such low survival
rates for businesses?
Venture capital role through
Intermediary role in linking
Deeper tax relief for small
Procurement set asides
Introduce land holding
agreements for small holder
intervention, but holds big
potential to reduce poverty
and extend markets
Markets in Traditional
Possible routes through tax
systems – incentivise big
Procurement system, but
will have smaller impacts
Address value chains
Supporting the ‘integration
economy’ – build new value
chains in the knowledge
Creating and allocating
funds to franchising and
Is an initial redistributive efforts needed before markets become enablers of
Who benefits from current government programmes?
National Development Plan does not have a plan for small business
development, although it is seen as crucial to reducing employment.
Agency vs. structure- Small Business ministry (so far) focussed vey
much on agency
Understanding the distinction between earned and inherited
People want secure employment, not insecure ownership (Banerjee and Duflo
A case can be made for a wider and bigger structural reforms focussed on small
Will it create a million new small businesses?
Unclear if the unofficial target will be reached
However, the reform process increases participation and widens ownership
Potentially offers route for employment growth in a low-growth economy
Small business interventions important, but need to be conceived as part of a wider