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The experiences of other developing nations were examined at the Soweto entrepreneurship conference, which looked for ways to help turn the economic tide in townships.
SOWETO’S entrepreneurs gathered at the University of Johannesburg Soweto Campus on 13 and 14 April to engage with experts from all over the globe about how to enhance skills and value-add in township economies.

 

Oupa MonarengMMC for economic development, Oupa MonarengOrganised by the university’s Centre for Small Business Development (CSBD), the aim of the International Soweto Entrepreneurship and Small Business Development Conference was to create opportunities for discussions and dialogue among township businesses, academics and policy makers.
 

It is the centre’s second such conference; the first took place in January 2010 and focused on transforming townships into economic powerhouses.

Daneel van Lill, the executive dean of the Faculty of Management at UJ, opened proceedings on the first day by commenting on the fact that South Africa’s large corporations had not been creating the employment they had needed to over the past few years. “Small businesses have been driving employment and economic growth,” he said.

The question then became why South Africa was lagging behind countries such as Mexico in terms of the sustainability of small businesses, Van Lill said. “We need to create equality between the haves and have-nots, and overcome the high failure rate of small start-ups.”

We had learned a lot over the past 15 years by engaging with other countries, but now we needed to ask ourselves “How do we get the job done?”, he maintained. “At the end of the day, you are either part of the problem or part of the solution.”

Being part of the solution is the aim of the CSBD, and is why it was established in 2006. It offers courses that provide invaluable skills needed to keep afloat as a small business owner.

“Dealing with value-add in townships will not happen overnight, though; it will take time,” said the centre’s director, Thami Mazwai. “This conference is about finding strategies to retain spending power and how to promote industrial development in townships.

“People in townships think their problems are unique, but they are not and have happened all over the world. Learn from them,” he advised. This was why the conference had speakers from China, Brazil and India – for Soweto’s business owners to learn from their know-how and apply it to their own companies.

Local business
To illustrate that the centre was serious about supporting small businesses, the catering for the conference was done by a Soweto company and all international speakers stayed in Soweto, said Mazwai.

 

Small businessesThe Soweto Empowerment Zone provides vital support to small businessesOupa Monareng, the member of Joburg’s mayoral committee for economic development, concurred with Mazwai’s sentiments about supporting local Soweto businesses, and posed the question: “If we are serious about helping entrepreneurs, what are we doing to show we are serious about the challenge?”
 

He said it was necessary to discuss the progress that had been made since last year’s conference. “We want results in actual development of townships, not in the number of papers that are presented or the number of attendees at a conference.”

This led to questions about how economic growth must be measured in townships. “Economics will tell us you can measure growth by gross domestic product (GDP) or gross value added (GVA). If it is helpful, measure growth by GDP or GVA, but if it is not we must find other ways which people in townships will find useful.”

The City was trying to facilitate an environment of success, where entrepreneurs in Soweto had as much chance as entrepreneurs anywhere else, Monareng added. It was therefore necessary to take advantage of the expertise offered at events such as the conference.

“We need to join hands as entrepreneurs, men and women, mothers and fathers, employed and unemployed people to think together and work together to build the townships.”

Chinese model
Chunlin Zhang, the lead private sector development specialist at the World Bank, gave the keynote address about township and village enterprises (TVEs) in China and the implications these could have for South Africa.

TVEs in China arose in the 1980s after an agricultural reform privatised collective farming. Townships and villages invested in off-farm businesses, mostly factories, where they sought high returns and jobs. “TVEs can therefore be defined as off-farm businesses, located rurally, owned collectively and run by a manager appointed by the people,” Zhang said.

An example of a successful township in China would be Qiatou, which produced 60 percent of the world’s supply of buttons. “Key factors of success of TVEs are the pooling of savings; finding and taking advantage of a market niche; technology and skills diffusion; and entrepreneurship,” he said.

Although the average growth of TVEs declined in the late 1990s, they still accounted for 27 percent of China’s GDP in 2007.

 

A small business in SowetoSmall businesses are thriving in SowetoThe success of these types of companies in China indicated that small businesses in Soweto could play a vital part in the South African economy, Zhang added. “It shows that rural enterprises are a useful starting point for industrialisation; finding a market niche is critical given competition from established firms; government can play a useful role in channelling technology, skills and knowledge; and that entrepreneurship is the key.”
 

Sessions
In line with this, four breakaway sessions were introduced, with academics from all over Africa presenting papers with solutions for small businesses. These sessions were: financial solutions; co-operatives, networking and other solutions; skills and sector development; and strategies for township entrepreneurs.

On day two of the conference, the Gauteng MEC for economic development, Qedani Mahlangu, spoke about solutions for entrepreneurs within the Gauteng Township Development Strategy. Mari Carmen, the head of technical co-operation in the Brazilian embassy, revealed the social policy for small, medium and micro enterprises in Brazil; and Rajesh Kumar from the National Small Industries Corporation shared experiences from India.

The conference focused on the improvement of industrial capabilities with an increasing return on investments and skills development, as well as the creation of export competitiveness.

It was sponsored by the City of Johannesburg; the CSBD; the Greater Soweto Business Forum; the Gauteng Enterprise Propeller; Merseta, Manufacturing, Engineering and Related Services Seta; the Gauteng department of economic development; and the Small Enterprise Development Agency.

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