SA's ageing manufacturers 'a dying breed'

Chris Darroll, chief executive of the Small Business Project, a Johannesburg-based think-tank and research outfit that conducts the growth index, said that the research confirms that entrepreneurs are not, as the popular myth wants it, "bright young things", who throw caution to the wind and start businesses as soon as they leave the school gates.

As in other countries, Darroll said, a large majority of South African small manufacturing business owners are over 50 years old with years of mostly corporate experience who start businesses in the middle of their lives. The index indicates that less than a fifth of factory owners are under the age of 40, while a third are over 60, many of whom are beyond retirement age. And they are having a tough time, says the report - "[m]anufacturers were ... reeling from increased input prices, particularly in relation to rising electricity and fuel costs, and the rising cost of imported components." Small Business Project researcher Kerri McDonald told the Mail & Guardian that the responses recorded by the index indicate that factory owners are ageing, along with the skilled workforce from which they came. Given a choice, their children are more interested in pursuing a professional career.

According to economist Iraj Abedian, South Africa has unique exacerbating factors. The pool of skilled artisans and professionals out of which factory owners develop has shrunk as a result of "an education system that has degenerated rapidly, reinforced by a black economic empowerment strategy that essentially prematurely retired engineers who ended up in Australia or Ghana," he said, adding that without small factories to supply inputs, components and maintenance services, mega-projects lose their ability to stimulate the economy and become "imported white elephants" that play havoc with the country's balance of payments.

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