Presentation to the Portfolio Committee on Trade and Industry 4 February 2005

Rationale for reviewing the 1995 White Paper Build on the direction set by Government in 1995  Successful in identifying needs of SMMEs  Focus on building capacity of institutions  Entrepreneur at the centre  Apply lessons and experiences learned in the past 10 years  Embrace the broader policies and reforms of Government - IMSLED - BEEUrban Renewal - CoopsIRDS  Provide a 10 year Development Framework

Changing Small Business Environment Increasing competition Rise of Asian economies and exports Trade liberalisation ICT revolution: Spread of the impact Expansion of service sectors “Second economy” increasingly significant Differentiation of support policies

Highlights of the 10 year review SA development frameworks Stabilising macro-economic scene with low growth National skills-development strategy National manufacturing strategy BEE and transformation frameworks Spatial development frameworks Sector development strategies General acceptance of the significance of SMMEs

Defining & Classifying the Small Business Sector 1.Restating the definition in the Small Business Act(1996) Small business means a separate and distinct business entity, inc.co- operative enterprises and non- governmental org, managed by one owner or more which, incl,its branches or subsidiaries, if any, is predominantly carried on it any sector of the economy mentioned in columns 1 of the schedule and which can be classified as a micro-, a very small, a small or medium enterprise by satisfying the criteria mentioned in columns 3,4 and 5 of the Schedule opposite the smallest relevant size or class as mentioned in column 2 of the Schedule

Vision The Integrated Small Business Development Strategy envisages: A South Africa with a vibrant and competitive small- enterprise sector with enterprises that grow in both turnover and employment.

Objectives Increase the contribution s small enterprises to the growth of the South African economy Create an enabling environment for small enterprises, with a level playing field between big business and small enterprises, and reduce disparities between urban and rural enterprises Create sustainable long-term jobs in the small- enterprise sector Ensure equitable access to business opportunities and support in terms of race, gender, disability, age, geographical location and sector Increase the competitiveness of small enterprises and the business environment so that they are better able to take advantages of opportunities emerging in national, African and international markets.

Targeting for support Micro enterprises  Improve productive capacity  Graduation towards formalisation  Urban and rural Small enterprises in growth sectors  ICT  Fashion wear  Designer furniture  Biotech  Tourism services  Marketing  Business services Black owned small and medium enterprises  Management expertise  Global networking  Access to finance  Export Readiness  Business linkages  Procurement

Strategy Pillars Pillar 1 Promoting entrepreneurship Pillar 2 Creating enabling environment Pillar 3 Enhancing competitiveness & capabilities at enterprise level Strengthen national awareness about the critical role of entrepreneurship Maintain small-business- sensitive business regulations Strengthen managerial, business and technical skills Promote alternative focus on ownership Improve access to financeFacilitate improved quality, productivity and competitiveness Expand franchise opportunities Strengthen access to markets via procurement, exports and business linkages Support technology transfer, incubation and the commercialization of business services Strengthen business associations and networks Facilitate the availability of business infrastructure and premises Expand SMME-focused sector-support agencies Increase the effectiveness of enterprise support Pillar 4 Cross-cutting foundation services Information, research, monitoring and evaluation

Establishment of inter-department and Provincial coordination structures Strengthening capacity of the dti to coordinate interventions Establishment of non-statutory National Small Business Advisory Council Establishment of SEDA to integrate Government small business services through localized access points Establishment of an APEX Fund to provide micro finance Institutional Reforms

Launch of Seda Annual Review and Summit Franchising Legislation Small business register Further Integration of other sectoral small business programs Revision of Schedule in Small Business Act Publication of Base-line study on the Profile of Small Business in SA Midterm review 2009 Action Plans

Strategy Map Implementation / Strategy The dti coordinating all Government Departments Small Enterprise Development Agency Public private partnerships Provincial Directorates Local Agencies Key performance Areas Increased Contribution to GDP Increased Contribution to employment Increased Contribution To exports Conducive Regulatory environment Reliable statistics on small business Programs Export Readiness Manufacturing Advice Technology Incubators BRAIN Franchising Support Community Public Private Partnership Vision 2014 Vibrant and Competitive Small Business Sector with Enterprises of all sizes ImpactOutcomesOutputsProcesses

Next Steps  Cabinet approval early 2005  Publication of documentation 2005