Seedbed of job creation?

Should the government’s broad-based black economic empowerment (BBBEE) strategy be reassessed and enterprise development be ditched? A leading accountancy firm and one of the country’s leading empowerment and business development entities find themselves on different sides of the fence.

KPMG recently proposed a reassessment and has suggested that enterprise development, with skills development and socio-economic development, be removed from empowerment assessment. This would mean that the seven elements used to rate companies’ BBBEE profile would be reduced to four.

But Nick van Rensburg, managing director of Anglo American’s Zimele, one of the country’s most successful empowerment and business development initiatives, has come out with guns blazing. He has strongly advocated the retention of the three elements.

“It will be an atrocity if that (enterprise development, skills development and socio-economic development) falls away,” Van Rensburg says. He describes enterprise development as the “seedbed” of job creation in South Africa and points out that whereas big business is shedding jobs in the current downturn, only small business is creating jobs. (Source: "Mail & Guardian").

Van Rensburg told the publication "BEE Scorecard" that BEE legislation and the codes of good practice have created awareness within corporate South Africa.
It has facilitated an introspective look for companies to evaluate more closely  and expand their own corporate and social responsibilities.
“This has resulted in a more socially responsible corporate South Africa, whereby each business has created and developed enterprise development strategies and BEE initiatives across a spectrum of fields,” he told "BBQ Scorecard".

‘Left out in the cold’

“The spreading of the BEE base has also assisted in a 'push down' of training and transactions to the middle and lower class where true empowerment is, in fact, taking place.”

Companies that did not comply soon realised they were left out in the cold.

The benefits far outweigh the cost of a company complying with the relevant legislation / BEE Codes of Good Practice.

Another positive outcome is that companies that have not been proactive in the field have put programmes in place. This is a prerequisite to obtaining a licence to operate in South Africa.

Corporates are actually prepared to start funding these businesses from both a financial and non-financial perspective.

The legislation / BEE Codes of Good Practice have also been very instrumental in creating decent jobs for South Africans.  Future job creation will occur less in the corporate sector and more in the small and medium enterprise sector.

The creation of quality entrepreneurs will go a long way to ensure the creation, sustainability and success of these enterprises, said Van Rensburg.

(for the full report, click here)