Open up the barriers to market entry for SMEs, for that way economic growth lies

Many large incumbent companies are not inclined to innovate and make large-scale investments — their position is so well protected they simply do not need toToo little of the discourse on an economic growth strategy for SA has focused on addressing barriers to entry and putting in place mechanisms for ensuring effective participation of black-owned firms and small- and medium-sized enterprises in established value chains.

As part of research by the industrial development think tank, based at the University of Johannesburg, we are reviewing the black industrialists scheme of the department of trade and industry , among other government and private sector-led initiatives to support SMEs. The research, which will be made public in the coming months, shows that potential for investments and growth in the economy is not only vested in the large, well-established firms.

New technologies, social media marketing channels, and the significant growth of online retailing offer alternative routes to market for smaller firms and, therefore, reduce barriers to market entry. Despite significant growth in recent years, these channels, however, are still very small compared to the volume of trade which takes place through the main retailers in SA, partly due to associated entry costs and small domestic market size.

Start-ups are, in any event, expected to be supported by other government programmes such as the Small Enterprise Development Agency, with the BIS being complementary to these core initiatives.

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