Small business, big future: What will the economy do for entrepreneurs?

June 27 marks International SMME Day, a moment intended to recognise the contributions of small businesses to national economies.

In South Africa, this day, if we are honest with ourselves, is actually less about celebration and more about confronting hard and uncomfortable truths. Despite being repeatedly described as the backbone of our economy, small businesses continue to face conditions that are anything but supportive. The contradiction between policy rhetoric and lived reality is stark.

Small, micro, and medium-sized enterprises are expected to carry the weight of job creation in a country where the expanded unemployment rate hovers above 43%, and youth unemployment exceeds 46%.

Let’s not quibble about definitions - but these figures are not mere data points, they reflect a broken promise of a better life for all. They reveal an economic system that closes more doors than it opens, particularly for those trying to build businesses from the ground up. Across the country, small business owners navigate a daily struggle through unreliable electricity, decaying infrastructure, slow payments from state institutions, limited access to finance, and a policy environment that is too often performative.

In theory, our market economy rewards innovation and risk-taking. In practice, it rewards incumbency and inherited advantage. Markets do not design themselves. They reflect decisions, who sets the rules, who benefits from them, and who gets excluded. In South Africa, we continue to treat the economy as if it were neutral, as if it were untouched by history. But the economic terrain is uneven, shaped by generations of exclusion. Small businesses are told to compete, to innovate, to absorb unemployment, while carrying the burden of systemic dysfunction that they did not create.

The state, while well-meaning in policy documents, often underperforms where it matters most. Implementation. Red tape is reduced in speeches, not in reality. Support schemes are announced, yet the delivery is wanting. Entrepreneurs spend more time navigating bureaucracy than growing their businesses. Plans such as the National Development Plan and small business development funds look good on paper and yet the reality is it remains out of reach for most, especially those in rural and township communities.

This failure is not just administrative. It is ethical. At its core, it raises a question of fairness. Do these business owners receive a return that matches what they put in? For many, the answer is no. They invest capital they can barely spare, work relentlessly, and still face barriers that have nothing to do with effort or talent. Roads are broken, electricity unreliable, and government institutions often unresponsive. The playing field is not just tilted it is actively stacked against them.

At the same time, large businesses continue to operate with insulation from these realities. Their supply chains remain exclusive; their transformation commitments often reduced to checkbox exercises. Supplier development is treated as obligation, not opportunity. While procurement frameworks nominally include small businesses, the real value often flows to the same few players. Too many corporates confuse compliance with contribution, and mentoring with meaningful inclusion.

We must ask harder questions about who holds power in our economy, and why they continue to do so. True economic inclusion requires structural change, not surface adjustments. It requires a shift in values towards recognising that small business is not a charity case or a backup plan for unemployment. It is a central pillar of innovation, dignity, and community stability.

Black Economic Empowerment, in its original form, was a bold attempt to correct the imbalances of the past. But its spirit has been diluted. It is now often misused as a political talking point or reduced to bureaucratic compliance and complaints of reverse discrimination. The problem though is not with the tool itself; it lies in how we have chosen to apply it. When transformation is gamed, fronting tolerated, and true access to opportunity remains limited, we have to admit that the practice has drifted far from the principle.

Part of this failure traces back to the early days of our democracy. In the political negotiations of the 1990s, South Africa secured the vote but relinquished meaningful leverage over the economy. Economic power, ownership, capital, and institutional control, remained largely untouched. While the Constitution enshrined rights, the structure of the economy remained shaped by old interests. What followed was a democratic state tasked with redistributive justice but with few tools to restructure entrenched inequality.

The result is a transformation agenda that operates within the confines of an inherited system. We asked the economy to include the excluded without reconfiguring who holds the keys. It was, in effect, a freedom with limits, political representation without economic reconstruction.

Equally dangerous is the continued peddling of the myth that economic freedom can exist independently of social and political freedom. A market that is free for some and closed for others is not a free market at all, it is a rigged game. Growth that enriches the few while excluding the many is not development; it is stagnation disguised as success.

South Africa has no shortage of entrepreneurial talent. What it lacks is an ecosystem that recognises and rewards it. Until small businesses are built into corporate value chains, until public institutions are held accountable for timely payments, until financial systems start assessing potential rather than pedigree, we will continue to fall short of our national potential.

SMME Day should not be a ritual nod to entrepreneurs. It should be a reckoning. A moment to ask not what more small business can do for the economy, but what the economy is willing to do for them. Praise means nothing without power. Recognition means nothing without reform.

Small businesses are not asking for handouts. They are asking for fairness. They are asking for a seat at the table they help to build. And if we are serious about a future that is inclusive, stable, and just, then it is time for both government and big business to answer that call with action.

Dr Armand Bam is Head of Social Impact at Stellenbosch Business School.

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

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