Reimagining the impact of enterprise and supplier development within the state-owned enterprise: a case of Umgeni Water.

Abstract

Globally, Small, Medium and Micro Enterprises (SMMEs), also called small businesses, hold a significant role in the world economies. This significance to the economy is based on the SMMEs potential to create employment opportunities, reduce the number of people living below poverty line and drive innovation which are important aspects of economic growth. In South Africa (SA), government acknowledges the importance of SMMEs as it has characterised the small business sector as a vital part of the national economy. The importance of SMMEs is reflected in the various government legislation, policy frameworks and support mechanisms that facilitate the operations of small businesses in their variety. Resulting in mandates that prioritise the redistribution of economic opportunities and commercial relationships between large corporates and SMMEs. Promoting an atmosphere that pushes government, state-owned entities (SOEs) and large private companies to engage in economic activities that involve small enterprises. Such practices, specifically those driven by the Amended Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practice, influence corporates to grow their Enterprise and Supplier Development (ESD) efforts by procuring or donating to SMMEs. The objective of the Enterprise Development programme is to create a solid business base for entrepreneurial people and in turn create further employment. ESD programs bring to Small Medium and Micro Enterprises (SMMEs) development in South Africa. Particularly at a time when SMME’s are expected to contribute towards stimulating economic growth and contribute towards the reduction of unemployment. The purpose of the study was to examine the impact of B-BBEE ESD as a growth and SMMEs development mechanism. The purpose of the study was to reimaging the impact of enterprise and supplier development within the state-owned enterprise, in particular Umgeni Water. Data was collected from 12 Umgeni Water cooperatives through interviews with active term contract at the time of the study. The interview based on a predetermined questionnaire method was used to gather data from participants. Thematic data analysis was used to code and categorise the data into themes according to similar perceptions. This study identified the impact of SMMEs within UW value chain and appropriate tools, assessed competitiveness to meet their profitability potential, evaluated capacity building requirements in executing deliverables and lastly ascertained the support intervention and resources accessibility in sustaining for SMMEs.