Serious Development Funding Covers Both CSI and ED

Hunger Entrepreneurship CSOs enterprise development CSI
Wednesday, 24 November, 2010 - 09:57

Enterprise development (ED) could contribute to poverty eradication, increasing the skills base in the country and creating opportunities for employment or self-employment. ED and CSI and their respective approaches could assist in identifying areas of synergy and programmes that should complement each other

At the heart of enterprise development (ED) is the desire to address the high levels of unemployment, poverty, inequality and skills shortage in our country. This is no easy task and there are no silver bullets when it comes to ED or other forms of development for that matter.

The critical thing to bear in mind is that successful enterprise development doesn’t come from nowhere. It is an integral part of the overall development continuum. Our own experience at Tshikululu Social Investments is that success in the continuum is not only about the application of money. Rather, it is about identifying, and working with, things that are themselves real, and that result in long-lasting and positive empowerment of people. It’s about being in for the long haul, and knowing that liberation is a process, not an event. The continuum can be likened to one’s progress up a ladder.

On the first rung of the economic ladder, there are those people marginalised from the socio-economic mainstream. Their needs are very basic and immediate, focusing on family livelihoods, health, basic education and skills.

The response at this first level is often to provide basic skills training, with the hope that this will lead to some form of employment. But too often, we have encountered training programmes that have been ‘imposed’ upon vulnerable communities, who out of desperation will accept anything, however inappropriate, that seemingly holds the promise of a better life. Sadly, such initiatives inevitably lead to disappointment once it is realised that the skills offered are not matched to the surrounding economic needs and that training is simply being offered for its own sake.

A basic principle of any sustainable development work, and also to enterprise development, is to ensure that what is being provided is what the community first and foremost requires and wants and, that it is in response to a tangible need.

It is then also important to distinguish between basic welfare or development objectives versus commercial goals. In many instances it is important to firstly assist communities to address basic needs such as food security, housing, securing identity documents, accessing social grants, schooling and primary health care before we are able to move along the continuum towards economic self advancement and job creation.

There are many examples of successful training programmes. These include programmes that focus on street children who are offered a safe living environment in conjunction with skills training focusing on basic skills such as baking or bead making. A major part of working with such beneficiaries must also be in the proper provision of life skills training, often using innovative means. These interventions not only address a social need for security, hope and acceptance but in some instances lead to future employment in the formal economic sector.

The next tier up the ladder is that of self-help groups, often comprised of unskilled women in rural areas, who produce goods in limited quantities to supplement social grants needed to eke out a living. These groups are rarely made up of the sort of aspirant entrepreneurs required to run structured businesses, fixed production quotas, or put together sophisticated marketing strategies. But they do provide a way – albeit modest – to supplement income and they should not be overlooked when they are effective. They are critical in the very important developmental facets of providing ways for people to believe in their abilities and potential, accept that they can affect their circumstances for the better, and give greater meaning to their lives.

Many groups simply want to operate at a very basic level in order to meet a basic need and this has a social benefit in itself. Also, we should never discount the often harsh realities that people face in simply surviving. Indeed, often the very survival of such groups represents a major achievement by the individuals concerned.

Enterprise development takes place further up the ladder. There are various initiatives that corporates are engaged in through micro-enterprises, small and medium-sized ventures, micro loans, and similar forms of enterprise development.

At Tshikululu, we have always said that you cannot respond to a need alone and that you need to back champions. In selecting an enterprise development partner there are also a few obvious partners you could consider such as business hubs, incubators or individual entrepreneurs. However, a sector that is often overlooked in the ED space are the non-governmental organisations that, for many years, have been at the coalface of providing skills training and employment opportunities for often the most vulnerable communities in our country.

As with any investment, you need to manage your risks upfront. Developing enterprises and creating employment is no easy task and there are no quick fixes. Lastly, we should not create false divisions between enterprise development and social development in general. So we need to be asking:

  • How can we encourage ED and job creation when our matric pass rates are abysmal?
  • How can we encourage an entrepreneurial mindset among women when the majority are unemployed and, sadly, in many communities the rights of women are disregarded?
  • How do we ensure that the future workforce can make informed career choices and have access to proper vocational and life skills training? and
  • How do we ensure that the 15 million South Africans who are chronically vulnerable to food insecurity have access to basic services as a step on their journey to independence?

These are all critical building blocks to reducing poverty, increasing our country’s skills base and creating opportunities for employment or self-employment. And so ED should not be seen by business as a stand-alone initiative, but rather as integral to its overall development strategy. Often, ED and CSI departments do not have formal working relationships and operate oblivious to what each other is doing. A greater understanding of their respective approaches could assist in identifying areas of synergy and programmes that should complement each other.

- Tracey Henry is CEO of Tshikululu Social Investments (TSI). This article first was first published on the TSI website and it is republished here with the permission of TSI.

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