Let’s share SMEs growth responsibility

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Kudzai M. Mbaiwa Small Businesses
Small-scale enterprise development must become a shared responsibility in Zimbabwe. Though we have a dedicated Ministry of Small to Medium Enterprises and Co-operatives Development, whose vision is “To be the ‘nerve’ centre for sustainable, inclusive, socio-economic empowerment, growth and development of MSME’s and Co-operatives”, alone, they cannot effectively deliver all the support (starting with policy) small business owners and entrepreneurs require in Zimbabwe.

Last week we looked at the potential contribution of small scale enterprises to the economy, and this week we start on the associated structural issues, policy being the first.

 Responsibility and Representation

Overall responsibility for developing policy for small business lies with the aforementioned ministry, but there are other major factors to be taken into account namely the country demographics and the era of digital technologies.

Most reports confirm that women make up the majority of the Zimbabwean populace, with over 51 percent of our population being female.

To corroborate this, it is estimated that about 76 percent of the economy is informal (meaning unregistered business) and 67 percent small and medium enterprises are owned by women.

Reports also indicate that over 60 percent of our population are youth, and without doubt these make up a great number of micro-enterprise owners or necessity entrepreneurs, on the back of high unemployment. In the age of digital technology, innovations and enterprises now include the Information Communication Technology (ICTs) sector over and above the small business sectors of manufacturing, retail and transport, mining, energy, transport and construction.

Representation has therefore become a critical determining factor when crafting policy. The perspectives and issues of women, youth and digital industry players would greatly inform any strategy and necessitate specialization in programming, expertise that the ministry governing small business may not have.

Other ministries such as that of Women’s Affairs, Gender and Community Development/Youth, Indigenization and Empowerment/Information Communication  Technology, Postal and Courier Services would naturally be better suited to dealing with these special groups, but may correspondingly not have the technical understanding of the enterprise development aspects.

As such, the expectation would be that their policies interact. The question therefore is “Are our current small business policies age, gender and era sensitive? Which ministry is culpable if young, female, and/or digital entrepreneurs’ needs are not met?”

While entrepreneurs and enterprise owners have a responsibility to work hard, self-develop, produce quality products and/or services that they rigorously market; the most important thing for national prosperity through enterprise is an enabling environment.

Registration, licensing, access issues matter before one even starts; policy will always inevitably affect and guide action.

Some nations have thrived when governments have taken seriously the potential and indeed the present contribution of small businesses, policies must clearly acknowledge them. The right policies will create an environment conducive to starting up and starting out.

Innovation and the Digital Age Opportunity For Africans

The much touted “African solutions to African problems” is fabulous on paper, but has hardly been lived up to in the region, and similarly, in Zimbabwe. Though it is important to be a part of the global technology revolution, we must localize innovation and stop “looking for the next Facebook”.

What we need, rather, is a Mpesa or Ushahidi or Iroko TV, platforms and innovations that solve the difficult and important problems unique to African nationals. The promoters of such, who are creators rather than consumers, must be enabled. In truth, we have not had much more by way of African innovations after these.

The right policies will place relatively few hurdles in the path of potential business owners and allow a common youth in Zimbabwe, with just access to the internet and brilliant ideas, to be a part of those that create solution. The opportunity of the internet must be for all.

Access to the internet alone will provide a startup owner the platform to build and also allow his potential customers to utilize his products.  This is something the ICT ministry can work towards, availing the means of production first. Subsequently it will become easy to measure real usage/uptake of innovations because the prohibiting factor — assess to the internet, ceases to be an issue.

To start a business easily it must take fewer than five steps, all of them fully actionable online. Registration costs must not be prohibitive then, seeing as much of the (human) labor elements can be taken away by a simple fully functional interactive website.

It is commendable that the SME ministry recently introduced a lower cost Private Business Corporation  (PBC) registration option over the traditional Private Limited Company, but there is no reason why the process of obtaining it must be manual, when practically everything is going into the cloud, the PBC has so little paperwork compared to its’ predecessor — full company registration and with mobile money, payments can be made online.   Business tax, intellectual property, and contracts information must be available to download at will, as well as policy in a summarized format with the option to feedback.  Social media must be leveraged now, utilized to engage enterprise owners and raise awareness of prevailing policy.

 Involving Additional Actors

Traditionally policy is only ever discussed in-depth at the consultative level, prior to being deployed. It is time to change this approach and seek to involve more stakeholders after policies are complete, for dialogues in places like vocational training centres, small business associations and the many emerging business incubation hubs and co-working spaces.

These are the places the affected innovators and enterprise owners gather, and such conversation allows them to take ownership and bring to life the things outlined in policy documents, as well as engage on the unworkable bits.

Policy should not be just a thick impractical volume of points and strategy that does not speak to the ones it superintends over.

Resources to make policies lived realities tend to come from such business serving organizations and in doing so they will be fulfilling their own agendas as well. The concerns of policymakers must therefore be as follows: Is it all encompassing, taking account of the concerns of the largest players? Once published, is it known, and thereafter clearly understood?

Finally, is it being implemented and is it working?

The fact is we cannot innovate around or entrepreneur our way out of bad policy!

The small to medium enterprises sector has been shown to impact positively on economic recovery and growth, employment creation and poverty alleviation (UNDP, 2010).

It must therefore be enabled by appropriate policy. Thereafter, we may then focus on other matters like small business modelling, funding and support services in                                                                                              Zimbabwe.

In conclusion, the statement issued out by the #i4policy project on entrepreneurship and innovation policy recently aptly summarises.

“Many improvements need to be made before the continent can fully capture the potential for innovation that exists in our                                                                        communities.

“And whilst we acknowledge that some governments are working hard to encourage entrepreneurship, innovation and job-seeking youth, we believe there needs to be inclusive dialogue amongst policy makers, innovators and local communities in order to create policy frameworks that foster local, bottom-up innovation.”

Indeed, these are things within our reach. Next week we will consider in greater details the major elements that affect small scale enterprises and share ideas on how Government policy can ease them.

Feedback: Twitter @kumub, Email kudzi@investorsaint.co.zw

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