Entrepreneurship the way forward for E-Cape, South Africa

In order to make the most of South Africa’s empowerment policies, both the government and business need to focus on investment in high growth, small and medium sized businesses which have the potential for job creation, said  Liz Zambonini, CEO of The Hope Factory, in Port Elizabeth yesterday.

She was addressing corporate stakeholders at the annual stakeholders’ day which also marked the 10th anniversary of The Hope Factory and the opening of its new Hope Hub business incubator in North End, PE. The Hope Factory, which is recognised as one of the most successful and sustainable entrepreneurial  development programmess in South Africa has trained and empowered  nearly 900 previously unemployed people — mostly women — in the past decade and  80% of them are still economically active.

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South Africa’s poverty levels remain alarmingly high, with those households that are the worst off sinking ever deeper into poverty while the gap between the rich and poor has widened in recent years, said Zambonini.

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According to the National Development Agency, the Eastern Cape’s population is estimated to have increased by 20 000 from 6.3 million to 6.5 million in 2010, which makes the Eastern Cape the third most populous province in the country after Gauteng and Kwazulu-Natal. Approximately 43% of the province’s population can be categorised as being poor, with an analysis of poverty data collected in 2006 indicating that a minimum of R881.5 million would be required per annum to alleviate poverty in the Eastern Cape.

Two of the government’s foremost development priorities are job creation and enterprise development in the province, which will in turn impact positively on their additional imperatives, being poverty alleviation, socio economic development and economic growth.

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According to Zambonini, developing entrepreneurs will offer the best way to reduce the levels of poverty seen in the Eastern Cape.“Research has found that for every person assisted on the road to entrepreneurship, seven others benefit indirectly – through food on the table, paid school fees, new shoes, books, knowledge and the like. This not only benefits these individuals, but also the province through a reduction in social grants, an increase in employment and a lowering in crime and poverty levels. For those South African entrepreneurs who start their entrepreneurial careers by creating a ‘home-based enterprise’ (HBE), they have been proven to contribute R6 billion to the economy annually. This is the bottom line when it comes to developing entrepreneurs.”

“As South Africa has one of the highest failure rates of business start ups in the world, investment and support of these businesses is critical, such as through business incubator programmes or solid mentorship programmes. Lastly, as we also have one of the lowest new business start-up rates in the world, we need to focus on growing the base to get the volume we need.”

The Hub will offer entrepreneurs individual office space, access to specialist industrial equipment, a computer centre, and support services such as mentoring and accessing markets.

“The last decade has been a celebration of equipping South Africans with skills to create sustainable businesses and uplift their communities. To be able to make a positive impact on people’s lives, particularly in the Eastern Cape where so many live below the poverty line, has been extremely satisfying,” concludes Zambonini.