Enterprise Development Feature
by Ilse Ferreira
employment. Some progress has been reported and figures continue to rise, but women are still not as representative of their gender in the formal economy as they could be.
Yet, developing a new business is fraught with obstacles. For women, these obstacles differ from those that men have to deal with when entering the business arena.
Development is about people, their needs and their circumstances. It is not about modernisation or industrialisation. In its broadest sense, it is more about creating new things that help people and communities move away from poverty. Some people see development as the opposite of poverty, or as a poverty-eradication tool. Yet, in the case of development, the sustainability of new businesses should be part of the planning process from start-up.
Start-up businesses are seen by all, government included, as a creator of new jobs. However, global statistics show that most of them do not make it past 28 months – and, in South Africa, between 70 and 80% of micro-, small and medium enterprises do not make it to their fifth year in business.
According to the 2010 Global Entrepreneurship Monitor (GEM), South Africa was ranked second-last out of 59 countries analysed in terms of established business activity. In line with global trends, women-owned businesses in South Africa tend to operate mainly in the informal sector and often fail to achieve growth anywhere near the benchmark that will allow them entry into the formal sector. Therefore, poor access to the broader marketplace hampers sustainable growth of these micro-enterprises and limits not just their growth, but also the impact they have on the national economy.
According to the National Small Business Act 102 of 1996, firms with less than 5 employees are classified as micro-enterprises, those with between 6 and 20 employees are consider to be very small, and those with from 21 to 50 employees are considered small businesses. Companies with up to 200 employees are ranked as medium-sized companies.
Most Micro-sized Enterprises are Female-driven
As many as 72% of micro-enterprises are owned by women, and around 40% of small businesses are in female hands. The SA Board for People Practices (SABPP) 2011 Report states that “there is no clear-cut evidence that women are more likely to be in an informal work environment; however, there is evidence suggesting that women are over-represented in lower tiers of informal employment”. The report further states: “Furthermore, many developing countries that underwent, and are still undergoing, an industrialisation process have created new jobs. These new jobs are often characterised by poor working conditions, low pay, no sense of security, and limited opportunities to climb the corporate ladder. Unfortunately, most of these jobs have been taken up by women. The over-representation of women in these low-paying positions with poor working conditions emphasises the lack of equal opportunities.”
Smooth Start-ups Do Not Guarantee Sustainability
According to Seda (Small Enterprise Development Agency), the risk associated with start-ups is much higher for women, not only because they have to deal with problems related to entering, and attempting to play on, a male-dominated playing field, but also because of their lack of education and training in the fields where they want to participate.
Moreover, sociocultural pressures and family commitments are brought to bear in the lives of women who take the plunge into starting up a business. Some of the challenges women face are almost insurmountable. Yet, there are organisations operating in this area that provide skills development and training. But a rather huge, fallow field still beckons just behind them. A global survey reported that South Africa’s unemployment rate is the highest when compared with that of developed and semideveloped countries such as the United Kingdom, the United States of America, Australia, New Zealand, Canada, and Poland. Interestingly, this same global survey also indicated that female employment was less affected than male employment during the global economic downturn.
The Cycle of Poverty
Poverty can be alleviated or combated by women-driven enterprises growing and expanding all over the country. It is known that 75% of South Africa’s poor live in rural areas. Therefore, women in these outlying communities can play a significant role in changing the future of their local communities, but so, of course, can women in trades, industries and other businesses who climb the ladder to financial success. However, many reports and research projects have already shown that the way forward is not a smooth road to wealth.
The obstacles facing women in particular have been identified. They are many and varied (see article, “facing the obstacles head-on”). There are role-players, from government to nongovernmental organisations (NGOs), to local government agencies, as well as community programmes, already in or entering the arena to assist, train and mentor women who have the determination, drive, passion and resilience to take on the task and make a difference in more lives than they may even think of.
Women’s Development and Poverty: Can the Cycle be Broken?
Women’s enterprise development immediately brings to mind the issue of poverty. Traditionally, women have always been thought of as the breadwinners in rural communities, which is where they came to the fore and started small-scale businesses, most often growing and selling vegetables.
But the last few decades have seen major strides in this area, with women moving into every imaginable job in nontraditional areas, and also in developing enterprises and starting up new businesses. Trade Union NUMSA says almost half (48%) of its membership consists of women.
Since the Ministry for Women, Children and People with Disabilities was formed by the government in 2009, awareness of women in all walks of life has increased. In business, the Employment Equity Act (55 of 1998) was promulgated to redress the backlogs and inequalities existing at all levels of