Small and micro enterprises are critical to the South African economy and undoubtedly have a role to play in the country’s economic recovery. However, many of these businesses were struggling even prior to the Covid-19 pandemic. The pandemic further exacerbated their challenges. However, if small and micro enterprises are not given the support they need right now their future sustainability will be in question.
A recent Business Day Dialogues LIVE, in partnership with Unisa Graduate School of Business Leadership (Unisa SBL), focused on the issue of SMMEs and Covid-19, including job losses, redundant skills and the essential proficiencies required for an economic recovery.
The Covid pandemic created a significant economic shock which surpassed even that of the global financial crisis in 2007 and 2008, pointed out Professor Pumela Msweli, executive dean and CEO of the Unisa SBL. SMMEs have been even more susceptible to these shocks than larger businesses.
In response, SMMEs have had to adapt rapidly. Recognising that SMMEs need to be able to cope with this new normal, the Unisa SBL has been looking at how it can help to equip them with the necessary skills to cope with these challenges. Its solution: an Urban-Rural Linkages Programme which aims to link urban businesses with rural SMMEs businesses.
“SMMEs are a source of growth for the future,” said Msweli. “This is demonstrated by their growth of over 12% for the last six years. SMMEs, which collectively account for around R2 trillion of turnover each year, have significant potential to aid SA in its economic recovery.”
The informal trade – which has not traditionally been categorised as part of the SMME sector – accounts for almost 30-40% of total intra SADC trade and creates over 70% of employment in the SADC region.
“Urban-rural linkages is about capacitating SMMEs and helping to grow cross-border trade,” reveals Msweli.
The Unisa SBL has established a Business Leadership Clinic as a mechanism to transfer skills from its students to SMMEs. It is an opportunity, says Andile Nobatyi, head of the Academic portfolio at Unisa SBL, for students to put in practice the theory that has been taught to them and benefits the SMMEs with critical skills transfer. Student involvement with these SMMEs forms part of their academic assessment. “The aim is to find real solutions to real problems,” he said.
Navigating the new normal, said Professor Neha Purushottam, a specialist in sustainable livelihoods, requires both upskills and reskilling as well as acquiring the skills required of e-commerce.
Morafe Tabane, an expert in Intra-African Trade & Investments at Unisa SBL, said the Urban-Rural Linkages Programme and Business Clinic has a role to play in facilitating and growing intra African trade and investment.
The African Continental Free Trade Agreement (AfCFTA) – which became operational on 1 January this year – has come about at an opportune time, she said. Unisa SBL’s programme aims to assist micro enterprises to take advantages of the opportunities presented by AfCFTA.
Andre Marrian, head of operations at Unisa SBL, said it was important that SMMEs selected the right tools to assist them with their digital migration given that digital skills could help them to grow.
Unisa SBL operates in a highly competitive and saturated market. What differentiates the school is its strategy of prioritising SMME skills, particularly through the Urban-Rural Linkages programme, which aims to help SA effect an economic recovery.
Covid-19, said Msweli, has pushed the school to become more agile both in terms of its structure and processes, and has resulted in a more streamlined operation. Given that much of the theory typically taught in business schools is rapidly obsolete, Unisa SBL has focused on developing an entrepreneurial and market oriented mindset.
Click here to watch the full discussion.