Should Government be driving Job Creation?
The
government has launched an aggressive Infrastructure development program to
improve trading conditions in the country and in so doing create much needed
jobs. In the run up to the 2010 World Cup, there was a boom in the construction
industry, this created jobs especially in the semi and unskilled areas. What has happened to those employees? What is
the long term effect of Government creating unsustainable jobs?
It is the
duty of the State to create conditions that are conducive to job creation, to
create the framework for long term economic growth through robust laws and
policies. It is up to the Captains of industry whose focus it is to create
shareholder value, to create jobs. Surely it’s a win, win situation for them?
Basic business fundamentals dictate that goods
are bought and sold at a profit. This in its own requires staff to fulfill
operational and strategic functions within that business, which in turn creates
jobs, which is a vital link in a “society value chain” which ultimately results
in more disposable income, which is good for business!
The Captains
of Industry however have unfortunately had their wings clipped. The Globe is
experiencing the worst economic crisis since the Great Depression. The
traditional American and European power houses are in the least very cautious
about increasing their overhead (jobs), in fact they are shedding jobs in an
attempt to maintain some level of profitability (shareholder value)
The picture
in the emerging (previously known as poor) economies, however is very different.
The BRICS countries have shown strong consistent growth. While these
Governments have funded infrastructure projects, there is a strong focus on
small business development.
The
champions for small business development has to be India and Brazil, both these
countries have legislation promoting small business business development and
easy access to finance for small businesses. (India has a Minister for Micro,
Small and Medium enterprises and Brazil, has measurable targets reviewed by the
Presidency)
It seems
that Brazil and India have a more focused or “single view” of small business
development. In South Africa, we have a fragmented approach spread across several
Government Departments resulting in confusion from the entrepreneur and a lack
of knowledge of what support is available to them.
The state has just launched
a new small business finance agency called SEFA. SEFA is a wholly owned subsidiary
of the Industrial Development Corporation, it is a merger of three public organizations
namely, Kula Enterprises, the SA Microfinance Apex fund and the IDC Small
Business Levy Fund. This may be a step in the right direction, but my research
to date indicated that while this may be a great idea strategically, there does
not seem to be an operational plan in place yet
Perhaps the State should be playing a role where legislation can be used to enable Entrepeneurs with clearly set deliverables and targets and less commissionsof enquiry
