Helping Small Business: Dealing with skills and unemployment


For the last three months, the Democratic Alliance has been running a campaign designed to help and empower small business. We have thus far produced two documents in this regard. They are:

• A document setting out a DA plan for the establishment of a one-stop shop for small business development; and
• A document setting out how to clear away the red tape which hampers entrepreneurship and which set out seven steps to make starting a small business South Africa easier.

The document we are launching today is the third, and final, policy proposal in this series. It sets out the various challenges facing small business with regard to the skills and employment and proposes a number of solutions to those problems.

Unemployment remains a huge problem in South Africa and needs to be addressed with the utmost urgency.

Deputy President Phumzile Mlambo-Ncguka has explicitly acknowledged that Government will not reach its goal of halving South Africa’s unemployment rate by 2014. According to the latest statistics released by Statistics South Africa around 37.9% of all working age South Africans remain without gainful employment.

Studies show that as few as 10% of all new positions of employment are produced by large, established firms. Clearly, the best way to address unemployment would be to leverage the employment-creating potential of small businesses and to promote small business development.

There are three basic ways in which this can be achieved:

1. By making it easier for small businesses to employ people;
2. By ensuring that people with the right skills are available to be taken up into employment; and,
3. By developing small businesses specifically in labour-intensive sectors and sectors with high employment-creating potential.

In order to fully exploit these three modes of employment creation, there are ten basic things that Government should pay attention to:

1. Assessing the impact of laws and regulations on small business development in priority sectors on an on-going, permanent basis by a structure established for that purpose.
2. Allowing temporary exemptions for the long-term unemployed and small, labour-intensive businesses from certain categories of labour legislation and Bargaining Council determinations.
3. Removing obstacles to staff reductions and the fair discontinuation of employment where such employment hampers the long-term sustainability or immediate performance of a small business.
4. Retaining skills by comprehensively addressing issues such as crime, service delivery and the overall feeling of alienation experienced by many South Africans.
5. Actively engaging in external skills attraction programmes and removing obstacles TO the international sourcing of priority skills by the private sector.
6. Boosting skills development by scrapping the inefficient SETAs, incentivising vocational training by the private sector, and improving literacy and numeracy levels and maths and science teaching.
7. Including Export Processing Zones in a national industrial blue print that prioritises the development of labour-intensive small businesses in priority sectors.
8. Instituting a streamlined, clear master trade policy that that rewards export-orientated production and supports small business development in priority sectors through a number of customised sector programmes.
9. Expediting the introduction of competition in non-liberalised sectors to drive down the costs of basic services and commodities and ensure the long-term sustainability of affordable supply (e.g. fuel, steel, telecoms).
10. Using the fiscal system to facilitate opportunity creation, encourage labour-intensive methods and promote the labour market performance of the unemployed and new entrants to the job market.

The Joint Initiative on Priority Skills Acquisition (JIPSA) will at long last be presenting a skills development and business plan to Cabinet later this month. We will be sending the attached discussion document to the relevant Cabinet Ministers and the Deputy President so that they may consider it along with the JIPSA presentations for inclusion in Government’s overall skills plan.

Download supporting documents:

Streamling The DTI - Skills Development And Employment .doc