Very Small is Beautiful for the Majority of Our People

Linked with Independent Development Sector Consulting, and with Southern African NGO Network SANGOnet.

Published on Sangonet, by Jan Beeton, not dated.

Survivalist entrepreneurship continues to be discounted in South Africa in favour of small to medium employment creating businesses. In our quest to focus exclusively on the employment creating potential and economic growth contribution of the more formal and growth oriented small business sector, we ignore at our cost, and at our nation building peril, the fantastic resource and value of micro and survivalist businesses. Whilst such entrepreneurs are a response to desperate  circumstances, they nonetheless have phenomenal social and economic value which is so often overlooked in their role as Useful start up economic endeavours and sources of work (as opposed to idling about and unemployment): 

  • A cradle of human capital formation
  • A key entry level point for attaining work and business experience
  • An opportunity to access the mainstream economy

The informal sector was ‘discovered’ in the 1970s when Keith Hart first used the term. This was then quickly embraced by the International Labour Organisation (ILO). This view largely saw the informal sector as “Covering marginal livelihoods and survival activity outside the regulatory reach of state and not yet able to be absorbed by industry.” The sector has in fact always been seen as transitory and a temporary safety net for the unemployed and marginalised. Yet it has persisted, refused to decline or disappear and has in fact often increased in different parts of the globe. Its contribution to national economies has been significant and in many developing countries it employs the majority of workers and offers increasing employment when the potential of other sectors to create jobs is declining.

Let’s talk livelihoods rather than jobs … //

… So, what do we need to think about and do here in South Africa?

  • Firstly we need to ask the question what is the problem here in South Africa with accepting the survivalist sector as part of our economy?
  • The writer’s answer to this question is that our general way of business life is hugely influenced by a mentality of materialism, ‘up market’ approaches to business, a profit above all mentality, and ‘the bigger the business the better’ thinking – it drives business in our country and our people at all levels.
  • Prevailing values of accumulating large amounts of money quickly, a get rich quick and ego driven mentality, personal enrichment before all else, image and status, all overshadow more relevant approaches for the majority population in our country of thinking small, thinking inclusion, thinking caring and sharing, in order to build a sustainable nation over the longer term.

Examples of what we need to do are:

  • 1.We need to stop discounting the survivalist sector
  • 2.We need to stop seeing this economic sector as peripheral and marginalised
  • 3.We need to stop treating it as a ‘CSI case’ and a ‘poor cousin’;
  • 4.We really do need to accept that we are a developing country and work more with the requirements of a developmental economy and its realities of poverty and marginalisation, as well as with the survival and coping strategies of poor people living on the fringes.
  • 5.We need to acknowledge and accept that we have a survivalist economic sector that is not temporary and that we should be working with it and acknowledging its phenomenal value and the significant economic contribution it makes to the country
  • 6.We need to build supplier and value chains that are more inclusive and diverse, creating links between developed and developing businesses as a national priority
  • 7.We need to make micro-credit available on a broad scale – we even need to think about establishing peoples’ banks– banks that have a primarily social rather than a profit purpose. (Muhammad Yunus who won a Nobel prize in 2006 for championing tiny microcredit loans to the poor in Bangladesh, is now pioneering this idea which he calls “social business” as a way to fight poverty – business not for profit, but to solve social problems).

(full long text).

(Jan Beeton is an Independent Development Sector Consultant specialising in micro enterprise development. She has run her own consultancy, QED Development Consulting CC, for the past 10 years. Jan has a long work history in micro business development education, training and mentoring all over the country in both urban and rural areas. Find her website Independent Development Sector Consulting).

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