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SMEs - government strategies

Guest post by: Dr. Rob Smorfitt

Article Overview: An overview of government strategies for SMMEs

SMEs - government strategies

Africa has incredibly vast unemployment and poverty problems to deal with. Superimpose this on top of political imperatives to remain in power as politicians are wont to do, and you have an enormous problem.

SMMEs (small medium and micro enterprises) are seen as the solution to the unemployment and poverty crises. However, the strategies are seldom suitable.

These governments need to have multiple strategies, but seldom understand or address this.

They need a general strategy for education and change management, to make entrepreneurialism acceptable in what are generally collective societies. Think about it. How do you encourage someone who has grown up, and quite likely stills lives in a tribal environment where the chief often makes decisions affecting the group, to understand that it is okay to do your own thing? How do you make the chief and other tribal members understand this? This is a very real issue that requires a solution from within Africa.

They need a strategy for the informal sector. The unemployable generally form the largest component of the informal sector, and consequently are the highest political risk in the context of the opposition politician who targets the unemployed sector with promises of wealth and jobs. However, these survivalist entrepreneurs are unlikely to generate many jobs if any, and suffer a high failure rate. Therefore a strategy for increasing their startup rate is required, and they also need development funding as traditional banks are not likely to ever enter this market.

Then there are the formal sector SMMEs. Again a strategy is required for both starting new businesses, and another strategy for growing existing businesses. It is the growing SMMEs who are moving towards medium and also large, that create the jobs. Look for other articles on high growth entrepreneurs.

It is not a simple one dimensional strategy, but a multifaceted strategy that is required.

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Article Tags: development, entrepreneur, entrepreneurship, SME, Smorfitt, strategies, strategy



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