There are many interests competing for budget share in our current ever-fluctuating economic climate. Many seem to make more short term business sense, but Nabeela Vally, Head of Business Development for SME-enabler Edge Growth, believes that ESD has a key role to play in stimulating South Africa’s economy.
We asked her why early stage businesses and entrepreneurs should be supported as a matter of priority. Her answer: “In a nutshell, they create jobs for the country, improve competitiveness, grow new markets, de-risk supply chains by reducing dependency on imported goods (let’s not mention our current exchange rate) and create shared value for stakeholders. Need more good reasons?”
So how do we use ESD to build the future markets we need? Nabeela recommends starting with a clear ESD strategy and roadmap which incorporates the following items.
- Achieving the minimum number of ESD points (a level 4 rating) must be made a top priority for the business to maintain its license to trade. This means that it must achieve at least 65% compliance across each ESD element (enterprise development, supplier development and preferential procurement).
- Mutual value creation. ESD is not a question of driving either commercial value or societal change; they are intricately linked at all levels of business. A successful ESD implementation assists businesses to improve affordability and efficiency in their own value chains, while at the same time uplifting the suppliers they depend on – a win-win situation.
- Reputational benefits. In South Africa’s current economic climate, it is more important than ever for enterprises to do their part to uplift South African communities by nurturing small businesses into stable and efficient employment creators. ESD is the perfect way to fulfil this moral imperative and to show stakeholders, and the business community at large, that your enterprise is committed to making a difference on a socio-economic level, which can only be of benefit to your brand.
- Value–chain sustainability. ESD contributes to de-risking the value chain by breaking existing supplier monopolies, promoting localisation in order to reduce dependency on imports (a serious side-effect of recent volatility in the exchange rate), and assisting distributors to improve service delivery and adopt a more client-centric way of operating.
- Profitability. In terms of cost-per-point efficiency, ESD is the best way to improve your organisation’s B-BBEE scorecard – essential if you are hoping to remain competitive.
ESD provides the most bang for your business’s buck. Job creation and stimulating the economy is the role of everyone who lives, works, produces and prospers in South Africa.
“When ESD is done and done well, the results bring about visible positive change,” says Nabeela, “including improvement in supply chain performance, genuine cost reduction by allowing new suppliers with superior quality and lower prices to enter the supply chain, brand loyalty, customer centricity, community goodwill, government buy-in and much more.”
It’s clear that ESD has a key role to play in South Africa’s future markets. Edge Growth is a key enabler in this space, however, there’s more than enough space for other companies to get involved. Our future markets depend on us.