One of the most damaging and threatening legacies of the Apartheid system is the enormous wealth inequality gap that still persists today. The gulf between the ‘haves’ and the ‘have-nots’ perpetuates problems of crime, educational attainment gaps and racial isolation and therefore minimizing this inequality is central to future economic stability and national success. In an effort to reconcile past injustices and create a more even and just wealth distribution the post Apartheid government focused on aiding black small business development and spurring entrepreneurship to as a sustainable route to economic growth and job creation. However, as various reports indicate, South Africa suffers from both low entrepreneurial activity and low success rates, particularly in the previously disadvantaged communities. For this reason the work of government programs and policy are particularly important in creating and expanding micro, small and medium sized enterprises.
In order to understand the successes and failures of government aid to small business development I reviewed previous relevant academic literature (with a focus on quantitative studies I would not be able to carry out myself) and conducted additional in-depth interviews. The interviews were conducted with a variety of figures related to the issue of small business development, ranging from government officials at the various programs to academic researchers to entrepreneurs from vastly different backgrounds and with different levels of experience.
While the government’s attempts are well intentioned and widespread, ultimately the government is not as effective as possible. The incredibly diverse group of entrepreneurs is particularly challenging to aid because of the various levels of entrepreneurial experience and education. Poor outreach, an inadequate secondary education system, lack of specialized services and failure to act as an enabling force providing market opportunities for small and medium enterprises limits the effectiveness of government. Fundamental changes in the organizational structure and advertising methods of these organizations as well as a renewed commitment to provide opportunities in the open market for small businesses and to entrepreneurial education at the secondary level would go a long way to increase government effectiveness.
Entrepreneurial and Small Business Operations | Public Policy
Houghteling, Will, "Growing ‘Black Diamonds’: The Role of the Government in Small Business Development and Black Entrepreneurship" (2007). Independent Study Project (ISP) Collection. 109.