Enterprise and Supplier Development (ESD) now constitutes 40% of a company’s B-BBEE scorecard and at our recent Thought Leaders, Building Bridges Between SMEs and Corporates Through ESD, Webber Wentzel Partner in Corporate Practice, Adam Ismail, described ESD as an opportunity for a win-win situation. As corporates, we must start investing and putting the hard work into ESD before we can see it bearing any fruit, but this effort will be rewarded as a more prosperous society and vibrant SME sector will emerge, which will greatly impact corporate performance in the long-term. Plotting the evolution of BEE which includes ESD, Adam noted that it is constantly evolving, however, he said we need to keep the end game in mind and not practice meaningless or “paper” BEE/ESD but instead, always ensure that we are seeking to honour the original intention of the legislation.
A big part of improving SA’s GDP growth rate, as well as reducing unemployment statistics especially amongst our youth, lies in the creation of SME’s. There simply isn’t enough happening in SA’s corporate sector to create the number of jobs we need; therefore, small businesses must be the answer. Adam said that SME stimulation can be immensely impactful, as its effects can spread like ripples in our economic pond.
Tanner Methvin, Partner at Impact Amplifier, shared the results of their highly successful ESD initiative working with Nando’s, which saw the development of a small network of chilli farmers in Zimbabwe, Mozambique and Malawi who now supply 95% of Nando’s global peri-peri demand – more than R11 million per annum is paid into this network. Felix Philipp, also from Impact Amplifier, shared interesting findings from the research they conducted in 2013, in partnership with New York University (NYU), around the impact of ESD in SA, how corporates perceive ESD and what their goals are. Felix highlighted that, for many corporates, ESD is no longer a compliance exercise, but rather a strategic issue. Impact Amplifier is aiming to conduct this research again in 2018, and because we believe in the value that ESD can bring SA, we would like to encourage our corporates to participate in the next survey – please contact us if your organisation would like to participate.
Pavlo Phitidis, CEO at Aurik Business Accelerator, shared some of Aurik’s high impact initiatives with us, as well as the strategic opportunities that lie within ESD. Pavlo said that with the rise of social advocacy in SA, big business can no longer afford to be a Level 8 contributor, not committed to SA’s transformation and the eradication of elements plaguing our society, such as mass unemployment. It is important to note that globally, ESD has been recognised to eliminate poverty and Pavlo firmly believes that it is the one cog that can create an inclusive economy.
Pavlo encouraged corporates to work with SMEs to take their businesses to the next level and said that we should view ESD strategically. In the past, ESD was positioned in the CSI/Transformation domain, however, it now forms a vital part of forward-thinking organisations’ operations and is a key agenda item in the boardroom. Pavlo said that ESD is the engine room for SA’s future growth and we should focus our economic growth aspirations on the SME sector.
The session ended with Ryan Ravens, Accelerate Cape Town CEO, who shared the components of ACT’s ESD Programme with us. These include and are based on the principles of collaborative co-creation:
- A Shared Services Hub
- A Finance Hub
- An ESD Portal
- Access to a Corporate Marketplace for SMEs
- Access to a Supplier Database for corporates
- An ESD Conference in Q2 2018.
Click here for more information on our ESD Programme.