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It is time to scale-up or close up

27 Feb 2015

The Ministry of Finance should be commended for allocating R3.5 billion in support of small business, however, the funds should also benefit 'scale-up' businesses to unlock their high-growth potential which could boost the South African economy. This is according to Heather Lowe, Head of Enterprise Development at FNB Business.

A Scale-up report published in the United Kingdom in November 2014 describes a 'scale-up' as an enterprise with average annualised growth in employees or turnover greater than 20% per annum over a three year period, and with more than 10 employees at the beginning of the observation period.

"South Africa needs to start prioritising scale-up business to create the economic growth momentum necessary for job creation. Our best and realistic chance of accelerating job creation depends on creating an enabling ecosystem for scale-up business because they have the highest-growth potential," she says.

"This country may not necessarily have a significant pool of scale-up businesses but we need to start analysing national databases to identify such companies. Some of the businesses may not immediately be scalable but their potential to grow beyond our borders should be good criteria to invest in their growth.

"Enhanced support for scale-ups should not necessarily mean that start-ups should be ignored; however, an equitable amount of resources should be made available, so that the country can generate momentum in creating jobs," she concludes.