In most market economies, except the most flexible and deregulated, there are significant barriers to business growth. For example in the UK, the important issues have been highlighted in a report by the Federation of Small businesses entitled “Barriers to Survival and Growth in UK Small Firms.” It shows that transition economies are expected to face more severe barriers to growth of SMEs. Therefore, there is a need to give attention to the set of barriers which hinder the growth of potentially fast-growth firms which have the greatest capacity to provide employment and bring in innovations as well as new technologies.
South African President Cyril Ramaphosa, during his state of the nation address, acknowledged the issue around bureaucracy and red tape and how these are limiting factors for startups and enterprise growth. Problems of red tape, inflexible legalisation and state bureaucracy currently stifle entrepreneurial activity and small, micro and medium size business capacity development in South Africa
The Minister of Small Business Development South Africa, Ms. Lindiwe Zulu, participated in the Startup Nations Summit 2017 and returned to South Africa armed with a wealth of global entrepreneurial policy insights, specifically those related to startups. The minister signed a Memorandum of Understanding with the Global Entrepreneurship Network (GEN) to fast track the achievement of their mutual entrepreneurial development objectives. The terms and understanding laid out in the MOU for collaboration included engaging with small and medium sized businesses to understand existing ‘red tape’ issues through local and regional policy hackathons.
“We are excited to partner on an initiative that enables entrepreneurs and support organisations to create a forum for dialogue between startups, policymakers, investors and regulators,” said Mojalefa Mohoto, Deputy Director General of Department of Small Business Development.
GEN Africa has partnered with Startup Nations South Africa, representatives from the World Bank and UNCTAD to participate in a series of policy hacks in Nigeria, Ethiopia, Botswana and Kenya. The objectives of the hacks are to support and influence policy engagements, and to further follow through implementing ideas generated through the African Entrepreneurship Policy Forum hosted recently in Kigali. A policy report will be compiled in partnership with UNCTAD, World Bank, Startup Nations South Africa and GEN Africa to share outcomes and best practices from each country that participated in this process.
“The results and outcomes achieved through this event will be shared at the Ministerial Roundtable on Entrepreneurship, World Investment Forum in Geneva, October 2018. The winning team in South Africa will also have the opportunity to showcase their innovative solutions at the next Startup Nations Summit to be hosted later this year in Indonesia,” said Alesimo Mwanga, Research Director at 22 ON SLOANE.
The Startup Nations Policy Hack model is focused on real policy challenges, actual implementation and impact; results produced from the hack should be tested in an identified area. Mulalo Rambau, Startup Nations South Africa policy lead, says that this process gathers together startup ecosystem representatives, which includes the participation of entrepreneurs to “hack” a specific policy solution in response to identified challenge in the ecosystem. The Startup Nations Policy Hack in South Africa will be hosted at 22 ON SLOANE, 11th May 2018 focusing on theme’s identified through a consultative process between IDC, the Department of Small Business Development (DSBD), World Bank and UNCTAD representatives. The themes identified include the following:
- Reducing barriers to entry for startups – company registration process, regulatory burden, tax burden;
- Reducing late invoice payments – both from public sector to private sector;
- Monitoring and evaluating 30 percent procurement and access to markets from SMMEs and Cooperatives;
- Reducing trade barriers between regional blocs in Africa – SADC, EAC, ECOWAS;
- Implementing entrepreneurship education in basic education curriculum.
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