- The December 2005 enterprise development code (600) defined three types of beneficiaries for enterprise development purposes.
- These are:
- An exempted micro enterprise (EME)
- A qualifying small enterprise (QSE) which is:
i. in excess of 50% black owned and a level one to six BEE contributor
ii. a level one to three BEE contributor (irrespective of ownership) - A generic enterprise which is:
i. in excess of 50% black owned and a level one to six BEE contributor
ii. a level one to three BEE contributor (irrespective of ownership)
The definition of an EME carries no racial classification (this is the only time this occurs within the codes). In other words, any EME could be a beneficiary.
The new codes seem to have closed this gap (I stress the word seem, because it's not that clear yet).
- "Category A” EME’s or QSE’s which are black owned or black women owned
- "Category B” Enterprises that are:
i) black owned or black women owned with a BEE status of between level 1 and 8; or
ii) 25% black owned or 20% black women owned with a BEE status of between level 1 and 6;
If category A beneficiaries are limited to black owned etc type companies we are doing the economy a massive disservice. South Africa needs to create more jobs. Today's Business Day notes that 73,000 jobs have been created in the last quarter, but this is still far short of the ASGISA targets - unfortunately the article doesn't state what the target it. The deputy president reckons the second economy will make up the shortfall. I think that new businesses in the first economy have the better chance of succeeding.
The 5 October, 2006 edition of Finweek produced a table showing the self employment trends. The research, conducted by Mike Schussler of T-Sec, also observed that 242,000 new companies had been registered in 2006, amounting to 1.69million active companies (from 812,000 in 1999).
White males - 25.5%
Black females - 19.6%
Indian males - 18%
White females - 14.7%
Black males - 14.6%
Indian females - 8%
Coloured males - 5%
The percentages are the number of people per group starting their own businesses. In other words 18% of all Indian males are now self employed.
Tie this into the Global Entrepreneurship Monitor findings that "the person who creates jobs for others in South Africa is likely to someone with better education and opportunities." We now get a picture that suggests that businesses that will employ more people should be targetted as beneficiaries for enterprise development as well.
I hope that my initial reading of the category A beneficiary beneficiaries is not so limited and that all EMEs may be regarded as enterprise development projects.
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