Building SMMEs Growth Drivers for Economic Diversification and Privatisation
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is created by unique resources ( Barat ney, Boipuso 1995). Hall Supply in Gaborone as a category on in the 28 Schwenke’s and 29th conceptual of November framework heralded the also theme: determines entrepreneurship growth as it is developclosely ment, linked a to catalyst micro- for economic the National theory Reset of Agenda. demand. The As platform the level showcased of competition its effectiveness in an industry to Batswana contribute at various to market levels such structure as learning, that a company behavior and faces reacting in its to industry topical and issues influences seized the with ease the with new Ministry which companies of Entrepreneurship can grow. ( MoE).
As much as it proved to be a useful platform for professional development of entrepreneurs, Enhancement of academics, the management government capabilities agencies of SMMEs and SMMEs has attracted founding
Business
In this his last is a follow- up article article to to the the one previwhere I shared owners, increasing couraging the policy platform or attention inhibiting also brought entrepreneurial in recent into growth ous two some instalments peculiar insights which with are readers based last on week. the years. In spotlight Many
through of waning regulation, the mechanisms gaps taxation, underlying used political stability, this instalment, I share more insights on demyslevel of education, employment legislation and
development
my presentation at the first LEA SMMEs the by government local entrepreneurship agencies involve and small, the
tifying roadblocks of startups and small, medium to engaging economies in the global community and micro Entrepreneurship enterprises to growth in Symposium their pathways in to driving medium provision to of micro external enterprises expertise ( SMMEs) in the
( World Bank Group, 2016: p. 7). It is argued that
support needed
Botswana, economic diversification I will delve and into privatization building away from ecosystem. form a of public advice, institutions training, and and governments subsishould growth public sector drivers dominated for SMMEs. economic It is structure. assumed And so, dised this consultancy. invest funds to These create schemes incubators and other article forms the second part of my presentation at the
for SMMEs
that causal relationships that affect face various intense difficulties technology- in driven addressing hubs such as Tech
LEA Entrepreneurship and SMMEs Symposium held at City in London ( United Kingdom), Start Up in growth are complex. Therefore, factors Quantum the diverse needs leap of SMEs to effectively. escape
Boipuso hall in Gaborone. Chile, Zhongguancun Science Park in Beijing that influence growth also display inter( China), Paris- Saclay ( France), The City
the middle income trap relationships DEMOGRAPHIC DIVIDEND between themselves and Berlin ( Germany), Skolkovo in Russia
B
include Despite otswana more a youth categories has unemployment 14 Years than left rate captured to estimated beto In be As the engines Technology backdrop of of Security job numerous creation Park in underIsrael. in
37.52percent in Botswana ( ILO, 2019), the age category in my current come a discussion. High- Income Therefore, economy, it is lying Botswana, problems, agribusiness the LEA EntrepreneurSMMEs
of 18– 24 years was the lowest represented by 9 ( 3per2) BARRIERS INTERNAL TO THE FIRM
my hope yet and underlying intention cent) owner/ managers of SMMEs problems that a dissection in the have agribusiness ship have and a significant SMMEs symposium potential delivered spur
Key internal barriers to growth of small into value emerged, the chains barriers using including a ( which sample but of I covered 300. not It limited begs in the my question: at economic all levels
businesses diversification except are that identified of implementawhen as human they resources previous what to the happened following: article) to the and lack youth growth of demographic innovation drivers of dividend? tion, survive monitoring management, and thrive and to labour- their evaluation related full porestrictions of and SMMEs Demographic among would most dividend local unleash in SMMEs, this full context potential lack is taken of to as defined results tential. of conditions Estimates several entrepreneurial of from employment. the BIDPA Dismissal supof less grow by entrepreneurial the and United diversify Nations capital Population the local and economy. Fund, growth meaning ports and “the the which World have Bank, been 2011) promulgated put the
economic growth potential that can result from shifts in Thus, driven it seems mindset imperative among to founding explain this by contribution government by since SMMEs the to early employ1970s.
a population’s age structure, mainly when the share of the growth working- owners paradox. age of population small businesses. is larger than Despite the non- workingThere ment is creation a need for at 32%. a quantum This figure leap to
age considerable Schwenke share of the ( 2011) government population”. organises Our effort youth variables over ought to escape show compares the with country’s 32% ‘ contributed middle income’ by that more the influence years interest to in promote growth agro- based into SMMEs, SMMEs a number it in has order of to trap drive large which firms is and now 36% sitting contributed on the neck coherent diversification yielded little themes and in privatization terms assembled of initiatives economyinto five in Botswana. of by the government. local entrepreneurship LEA ( 2018) and states Small,
The World Bank ( 2016) has indicated that 600 million Medium categories wide export which diversification. are necessary SMME for a that Botswana to Micro has enterprises created policies, ( SMMEs)
jobs will be required by 2030 in order to provide employcompany sector continuous to ecosystem organisations like an and albatross. funds that
ment for the world’s grow. growing These to suffer workforce. categories neglect The are thought of supdescribed this relative statistic to other reinforces as ( 1) industries’ growth the need sectors motivation, for startups thus and small, port these enterprises. Against this
( medium foregrounding 2) expertise to micro in enterprises the managing need ( for SMMEs) growth, business growth ( 3) to background, be a a plethora of obstacles demand priority development for and all regimes ( support. 4) resources around the and world, supply. with Key takeaways from the
develop
remain in place, preventing SMMEs ing countries reporting that 7 out of 10 formal jobs are Extensive The just literature ended LEA reviews Entrepreneurdiscuss the from achieving sustainable entrepre
Entrepreneurship and
created by SMMEs. Many of the country’s formal jobs are influence found ship in and these of SMMEs firms, each even of symposium, these though components a single held SMME is neurial said growth. on to employ growth. fewer than 100 people. Yet, most SMMEs do At an international level, SMMEs not have tangible collateral or a clean historical financial are considered to be a springboard record, which are required by financial intermediaries, in
for achieving the United Nations order to secure a bank loan. As a result, the rate of start- up
Drivers of growth motivation can be 2030 Agenda on Sustainable Debusiness failure in Botswana remains high. The potential summarized as focus on growth, lead
role that small businesses can play in terms of poverty velopment since they promote susership, reduction, effective job creation, performance and fostering measureentrepreneurship tained, inclusive economic growth, ment in the local system economy and discipline. is unprecedented As much since SMMEs full and productive employment and as are motivation at the heart of to the grow Botswana is a precursor economy, according to decent to work ( Goal 8); foster inclu
International Trade Center ( 2019). growth, however sustainable growth sive and sustainable industrialisation can CHALLENGES only be AND achieved OPPORTUNITIES if the SMME AFOOT has and catalyse innovation throughout expertise Unlike most in other managing Sub Saharan growth. African Porter ( SSA) econothe economy ( Goal 9), and lastly, ( mies, 1998) Botswana argues has that a constant if companies promulgation ensure of governcontribute significantly towards end
ment’s initiatives to assist the small, micro to medium that there is a strong demand for their ing poverty ( Goal 1), according to
enterprises ( SMMEs). In Botswana, SMMEs can be products, they will achieve higher rates the UN 2030 Agenda ( 2018).
identified to possess the highest potential for employment of creation growth and than spread competition. the benefits of industrial prosperity widely through their geographical distribution and wider adaptability to change circumstances. Despite the Economic diversification has significant Demand economic is linked impact to made many by SMMEs growth in the underlined local major policy directives economy, they have continued to encounter difficulties in drivers such as customer enthusiasm, of the economy of Botswana such
gaining access to growth drivers such as funding and busientrepreneurship, economy and industhat it is a key determinant of both
ness development services, which inhibits their growth try. and expansion This is an ( area World where Bank, several 2016). Nonetheless, SMMEs against macro and micro 4. economic Consultants activity. are being
can this background, be classified entrepreneurship as weak at executing. and startup activities The role that SMMEs can play in Demand in Botswana for have a start- grown up’s significantly products in number or Botswana’s and economic diversifica
geographical spread recently contributing enhanced services requires the founding owners to tion drive is a major one. Support
levels of innovation and employment generation. get out of their building ( GOOTB) and for SMMEs by in the twentieth create ROADBLOCKS demand TO ENTREPRENEURIAL themselves. A common GROWTH century comes in various forms but toolkit There which are several has barriers recently to and entrepreneurial severally growth, is predominantly financial. That is gained which organisations usage for this should purpose guard by against modern ( Bartlett not and to say it must be confined to
Bukvic, 2001: p. 180), including but not limited to the folagile enterprises is the TAM, SAM and fiscal interventions alone, but also
lowing: institutional barriers, financial barriers, internal SOM framework. The acronyms TAM,
organisational barriers and social barriers. Reduced explore other supports such as land SAM chances SOM of success stand of for a start- Total up are Addressable made even lower and by business development support. Market, barriers to Serviceable market entry. Addressable Market, and Serviceable Obtainable Market, O’Brian M’Kali ( PhD, MBA,
1) INSTITUTIONAL VOIDS
respectively. These terms represent MSc, M. Ed.), has lent his expertise
Institutional voids emerge from non- existence of inmetrics stitutions that or formalised help businesses bureaucratic define arrangements the to such many organisations highlighting customer as government and regulations revenue that opportunities dictate how SMMEs the may essential role 7. that enterprise
within interact with their their market stakeholders spaces. ( Bartlett & Bukvic, 2001: development and SMMEs play
p. 180). This challenge is realised in both emerging and
in organisational and economic
developing economies such as our own, even though
growth. Can be contacted 8. on Mo
institutional barriers are regarded as a high- risk factor
The resource based view proposes for economic development. Rapid knowledge adoption bile: is 71860308 ( WhatsApp). before Email:
that necessary sustained for start- competitive up and SMMEs advantages in order to overcome obrianmkali@ yahoo. com
both the liability of newness and the liability of smallness 9. The submission must
( García- García, García- Canal & Guillén, 2017: p. 97).
To this end, government and public institutions can play a crucial role in the local SMMEs ecosystem by en
December 16, 2022