The benefits of ESD in South Africa

WRITTEN BY BUHLEBETHU MTSWENI

Enterprise and Supplier Development (ESD) is an element that is deeply enshrined in the B-BBEE codes, although the idea is a global one. In South Africa, Enterprise Development is used to propel previously disadvantaged groups into the world of entrepreneurship.

 

Why do companies run ESD programmes?

The reason why corporate companies embark on ESD programmes is two-fold; first to develop black-owned companies to maximise their B-BBEE points, and additionally to invest in current and future suppliers of their business, for maximum value-extraction.

What are the benefits to small businesses?

The benefit to small businesses is that all corporates that are generic sized are encouraged to invest Enterprise Development funding in black-owned companies. This investment assists smaller companies in becoming better potential suppliers, with better business structures and management systems, and this helps them to get more work and survive. By being a better-run business, their goods or services are more attractive to other companies, and this makes their potential market-growth a possibility.

What are the benefits to the economy?

Enterprise Development is crucial to the economy due to its ability to empower small businesses. SMEs in South Africa contribute more than 50% to the job market, contributing a further 45% to the Gross Domestic Product of our country, and so their survival is absolutely crucial to the economic growth of our country. Developing small black-owned businesses that are in the demographic majority, is the key focus of ESD. For that matter, ESD programmes seek to encourage the growth and sustainability of small businesses, thus securing the more than 50% contribution to employment and the possibly increase in GDP.

What is the criteria to become a beneficiary?

The criteria to become a beneficiary depends on the ESD strategy of the corporate, but in general terms the potential beneficiary needs to have a registered entity and show some level of proficiency in running a business.

Only a few companies in South Africa have truly understood the value of Enterprise and Supplier Development for their overall performance. For a quality, tailor-made ESD solution, or for more information, contact LEAP today on 011 449 7074 or visit www.leapco.co.za.

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