‘What do I say to my child when some days our grocery cupboards are full, and other days they are empty?’
This was the question a small business owner in a rural South African town posed to Larisha Naidoo, Head of Anglo American’s enterprise development arm Zimele. It highlighted the challenges faced by small businesses in remote communities, and underlined the role that large corporations can and must play in supporting community suppliers.
Naidoo says it is ‘critical’ that big business does more to stimulate economic development and job creation in our communities.
“Small businesses aren’t just the engine of our economy: they’re the engine of communities, and households. In our current economy, with record unemployment levels as well as the impact of the Covid-19 pandemic, we need a major realignment in how we create and support small businesses,” said Naidoo.
Many large companies have enterprise and supplier development (ESD) programmes, but for them to be successful and sustainable, they must be able to match what the company needs to procure with who is able to supply the necessary goods and services in any given community.
To make these links, businesses must have deliberate supply chain policies, practices and targets that focus on local procurement; and there must be strong engagement with community businesses to appreciate the issues faced by the small business owners on the ground, and their abilities and skill sets.
“Once you align the community needs with the business imperatives, and corporate supply chains dovetail with development programmes like Zimele, you reach a point where supplier development both supports SMMEs and an organisation’s inclusive procurement imperatives,” said Naidoo.
It is also vital that these small businesses are created, nurtured and sustained to become valued participants in a supply chain. To create sustainable businesses, an ESD programme needs to focus equally on mentoring and coaching entrepreneurs, igniting partnerships that create market linkages, and assisting with business loan funding.
“It isn’t a one-year engagement: the best results are delivered through sustained, long-term relationships, that deliver real value to both the big business and small business,” said Naidoo.
According to Naidoo, it is therefore important for corporates in South Africa to support small businesses in terms of creating market linkages enabling the small businesses to access contracts and purchase orders while continuously exploring ways to assist small businesses to be developed to new levels of performance.
“This is critical for skills and youth development as well as to get small businesses to be sustainable, competitive and stand on their own two feet. We need to go the extra mile in supporting these businesses by giving them feedback in areas that they are grappling with,” she says.
She adds that understanding the needs of small business will assist Corporate South Africa to be impactful in their enterprise and supplier development initiatives.
“To go for impact, we need to understand and define the impact that we need to achieve and the scale at which we need do that — from training to integrating into value chains and investing in infrastructure, systems to create jobs and partnering up with other entities in order to create influence.”
Partnerships are necessary to support these SMME’s through technical enablement efforts and integration of technical and financial skilling with accessibility to procurement opportunities on one end and financing to enable delivery of these contractual obligations on the other.
“This will allow a competitive advantage which will enable these small businesses to win opportunities that are available in their focus areas of work while enabling them to take advantage of this level of partnership diversity to manage complexity in especially a difficult environment that is brought about by the COVID-19 pandemic.”
Zimele is running a supplier development programme which aims to develop 900 community suppliers by 2022; an enterprise development programme, which has the ambitious goal of developing at least 2 500 sustainable small businesses beyond Anglo American’s mining operations; and a Youth Development Programme, which is on track to give 2 500 youth the skills needed to enter the job market by 2022.
This is part of Anglo American’s goal of supporting up to 10 000 jobs by 2022, creating three jobs off-site for every job on-site by 2025, and five off-site jobs for every on-site job by 2030.
“There is no better way for big business to help flatten the inequality curve and create jobs than through supporting local small businesses. That way, we can make sure nobody has to live with empty grocery cupboards,” said Naidoo.