While the BEE scorecard is well-intentioned, it should not be treated as a simple checklist, but rather seen as an instrument to facilitate real transformation. When it comes to building and supporting small black-owned businesses in South Africa, a much longer-term view needs to be taken.
Many BEE initiatives are nothing but short-term interventions that are carried out only to tick the boxes of the BEE scorecard. These short-term initiatives often do the bare minimum and, in the bigger scheme of things, don’t do much to help small black owned businesses.
In terms of the BEE Codes of Good Practice, Supplier Development contributions are made to qualifying entities that already form part of the measured entity’s current supplier chain. Enterprise Development contributions are made to qualifying entities that are not part of the Measured Entity’s supply chain.
Without a fallback on generational wealth, access to experienced role-models, or access to wealthy networks and finance, many small or start-up black-owned businesses have the odds stacked against it right from the outset.
Most Supplier and Enterprise Development initiatives as recognised in terms of the BEE Codes are aimed at providing a solid foundation for small black owned businesses to set it up for success. Supplier and Enterprise Development cannot, and should not, act as a solution to the inherent challenges of building a business, but it should help level the playing field for black entrepreneurs.
Real long-term initiatives can truly make a difference to small black owned businesses in South Africa and, when implemented correctly, presents an opportunity to give small black owned businesses the foundation they need to survive the first few years of business and increase their likelihood of success.
Supplier and Enterprise Development initiatives must be structured to create a stable environment where black entrepreneurs can experiment and take on the risks required for real growth, without the fear of catastrophic failure.
Successful Supplier and Enterprise Development initiatives will, in addition to earning companies points on its BEE scorecards, further benefit the South African economy as a whole by ultimately stimulating job creation and widening the tax base.
With this in mind it is therefore imperative that companies consult with their BEE advisors to develop and implement sustainable Supplier and Enterprise Development Initiatives.