Although it is now common knowledge that funding small suppliers is key to igniting the engine of inclusive economic growth, the evaluation and development of relevant skills play an equally significant role in powering the economy.
It is this focus on skills development that underpins the operating principles of Old Mutual’s Entrepreneurship Ecosystem.
In this month’s SmartProcurement, Old Mutual’s SME Development Manager, Khanya Okumu, explains the financial group’s premise that a small supplier run by people who possess the right skills will have a firm foundation and the potential for sustainable long-term growth.
For this reason, skills development and financial education are high on the agenda of the Old Mutual entities driving this ecosystem. Skills development (as it relates to entrepreneurship) is primarily driven by the Old Mutual Foundation, Black Distributors Trust and Masisizane Fund.
The private sector’s role in post-investment business support and capacity building is as critical as its role in financing small, medium and micro-sized enterprises (SMMEs). Providing finance and access to markets without appropriate skills development programmes to make these investments sustainable would be a fruitless exercise.
There is a need to build both technical skills as well as overall business management skills. Old Mutual believes that effective enterprise and supplier development (ESD) can best be achieved through partnerships that leverage incubators and accelerators as well as government programmes/initiatives.
However, as great as their potential for job creation is, SMMEs cannot be expected to be the Holy Grail in an economy in which growth has crawled to a near halt.
Making a real impact in increasing the potential salary-earning or employable workforce requires a multi-faceted approach:
– Integrate skills training into early education to instil an entrepreneurial mindset and encourage innovation. The world is changing and the skills required to be productive are changing as well.
– Stipulate clear regulations and a commitment to quality interventions at policy level to incentivise skills development and skills transfer from large corporates to small businesses.
– Drive a holistic approach to skills development. Mentorship, networking and overall business acumen are skills that can make a business stand out from its competitors.
When the above work harmoniously together, as an effective and efficient ecosystem reliant on each other’s strengths and support mutually beneficial objectives, the likelihood of success is increased.
The Old Mutual Entrepreneurship Ecosystem seeks to promote entrepreneurship through a holistic approach that encompasses the abovementioned interventions at schools, financial education training and non-financial business support, which includes mentorship and training for SMMEs in the value chain.
The desired outcome is an enterprise that leaves an ESD programme empowered to survive and thrive in the business world. Monitoring and evaluating these enterprises are essential to track growth and success, but also to identify areas of weakness that need further intervention.
At the heart of ESD is the notion that large businesses should move beyond compliance (box-ticking) and towards the heart of transformation. By directing development interventions and activities in a responsible and focused manner, the skills level in small businesses can be raised to ensure their transition into viable, growing enterprises.
In short, ESD is essentially about creating livelihoods as well as wealth. To move from creating only livelihoods to creating sustainable wealth, the skills gap must be closed.