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Media release South Africa’s national development vision in the first democratic decade showed a clear commitment to both skills and small enterprise development. But there has been a concern among researchers that the interface between these two policy areas has been characterised by poor policy coherence and weak delivery. Such criticisms are in keeping with the broader African experience in this area. It has proved particularly difficult for African states to reorient public provision towards the needs of both existing micro and informal enterprises and potential new entrants into this segment of the economy. Nonetheless, what this literature also shows is that much training is present in the micro and informal enterprise sector regardless of the interventions of states and donors. In a report entitled, Skills Development in Very Small and Micro Enterprises, edited by Simon McGrath, the debate is taken further through an analysis of the state of skills development for smaller enterprises in South Africa, based on two empirical studies of practices and attitudes related to skills in very small and micro enterprises (VSMEs – those with 2-10 employees), commissioned by the Department of Labour. In keeping with work in other African contexts, these studies show that the South African Government and its agencies do not play a particularly prominent role in the entrepreneurs’ accounts beyond their initial education and training. It is not that these entrepreneurs did not believe that skills development is beneficial to individuals and enterprises. Nor is the issue that they were not actively engaging in skills development. Rather, the report suggests that the challenge for skills development within VSMEs in South Africa lies in the desirable level of formality of training and its articulation with the official national skills development system. Informal training can be seen as providing a rapid and relevant response to the skills needs of VSMEs. Moreover, it avoids the two major challenges of time and money that particularly affect formal training in smaller enterprises. Nonetheless, informal training is not particularly well suited to responding to technological changes or in addressing more strategic and longer-term skills gaps. A major problem with South African attempts to intervene in informal training has been in the weak articulation between the modest and focused skills needs of VSMEs and the vast and complex structure and mechanisms of the National Qualifications Framework. The NQF was not designed with the needs of VSMEs in mind and has largely failed to understand the skills needs of the sector as it has evolved. Where the formal qualifications system does appear to be having greatest impact on VSMEs is through learnerships. Both studies found high levels of positive sentiment amongst owners and managers regarding the notion of learnerships as well as several examples of participation of owners or staff in such programmes. However, the extent of provision must not be overstressed and the fragility of the emergent system requires great caution in predicting that learnerships will ever be a major vehicle for skills development within VSMEs. Although the VSMEs interviewed in the NSF study were largely positive about the training they had received, their criticisms should be noted. They were particularly concerned about the generic and superficial nature of much of the training offered. The diversity of VSMEs, even within one economic sector, means that careful attention needs to be paid to the targeting of interventions. Given the relatively high educational levels in our samples, it appears that many interventions are pitched too low on the NQF for at least some of those they are intended to benefit. There was little apparent impact of business development services and microfinance on the surveyed enterprises. South Africa is in the process of a reorganisation of the national agencies with responsibility in this area. This is a reflection, in part, of the poor levels of impact to which our studies point. In this reorganisation process, it will be important to take account of evidence such as ours which points to how enterprises actually operate. The interactions among the new agencies with regard to financial, business development services and skills development will be particularly worth monitoring. The two studies also appear to provide evidence about the poor performance to date of the levy-grant model in its interaction with smaller enterprises. Both studies point to the high levels of ignorance, poor communication and frustration that characterise VSME relations with Sector Education and Training Authorities. Few enterprises claimed to be paying the levy, even where they were liable. Fewer reported making use of Workplace Skills Plans, the principal planning tool of the new system. Fewer still, acknowledged receiving the mandatory grants that should have flown to them as a result of WSP submission. In saying all this, however, it is important to remember that the SETA system is still very young. Because of this, many sectors have not yet moved away from old patterns of organisation. Thus, in sectors where large firms tended to dominate collective action this largely remains the case. SETAs can lead sectors to be more focused on smaller enterprises’ needs but they need time and assistance in developing such a leadership role and will never be able to totally overturn the power dynamics of their sectors. The relevance of these studies to policy and practice in South Africa is clear and demonstrable, but it is important to note that South African studies are relevant to wider African debates. One pressing policy lesson that other African countries would do well to learn from South Africa is that of the performance of the National Qualifications Framework over its first decade. The two studies point to the very limited relevance of the NQF to smaller enterprises in South Africa, and this is even more likely to be true for other African countries where smaller enterprises are both more prevalent and, often, less formalised. If, as appears the case, other African countries are determined to follow the NQF route, then it is vital that they consider how it can best be adapted to meet national realities, including the central economic importance of smaller enterprises. The studies also reinforce existing concerns with the effectiveness of other elements of the toolkits of enterprise and skills development being used across Africa. They suggest that levy-grant systems are at best a difficult tool to use and that their ability to balance the needs of larger and smaller firms is far from proven. The South African experience also raises a question about the appropriateness of a sectoral approach. The National Skills Fund Strategic Projects were a deliberate intervention from the Department of Labour to encourage a focus within the SETAs on the needs of smaller enterprises, but the limited progress in several sectors is striking. Equally, the failures of the small enterprise development system, given the resource base from which they were operating in South Africa, may provide further impetus to a more cautious approach to such interventions elsewhere in Africa.
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