Abstract:
It is often said that South Africa’s future depends on the ability of
small, medium and micro enterprises (SMMEs) to grow. SMMEs
can be instrumental in driving competitiveness, economic
development, and job creation. They can also play a central role
in providing the innovation necessary for communities and
environments to thrive sustainably. Moreover, a flourishing
SMME sector can be the catalyst for transformation.
Across the world, entrepreneurial ecosystems have been
demonstrated to play an important role in entrepreneurial
development. An entrepreneurial ecosystem is defined as “a
community of multiple coevolving stakeholders that provides
a supportive environment for new venture creations within a
region” (Cao and Shi, 2021, p. 75).
Enterprise and supplier development (ESD) programmes have
gained increasing attention as vehicles that support the growth
and sustainability of small and growing enterprises or the SMME
sector in South Africa. ESD is fuelled by legislation such as the
Broad-Based Black Economic Empowerment Act of 2003 and
the Constitution of South Africa (1996), and transformation and
inclusion remain its main objectives. The B-BBEE Commission
(2022) points out that effective ESD programmes can drive job
creation, particularly for the youth, and economic growth by
strengthening local supply chains.
However, despite a variety of measures having been put in
place to develop the SMME sector in South Africa and ESD
programmes being valued at between R20 billion and R30
billion per annum, the impact of such programmes in terms
of developing the country’s entrepreneurial capacity and
capabilities remains uncertain.
We would like to thank the 41 members of the ESD ecosystem for
giving us their time, Edge Growth for their funding support, and
Dr Lusapho Njenge for his helpful comments on earlier drafts of
this White Paper.
