The challenge of Enterprise development in South Africa



In the business ecosystem as in the natural ecosystem, growth most commonly takes the form of evolution. Adaptation to either adapt to mitigate against threats or take up opportunities created by some other change. Change could be from one or more of the many variables that are relied upon to keep the system continuing on its journey through the many processes to achieve sustainability. If any internal or external variables are changed either by design or by default, then the entire ecosystem needs to adjust either positively or it will be effected negatively. This is standard systems theory and applies in the context of enterprise in any market or socially defined segmentation.


Lets explain:

The horizontal axis is a simple value chain; Design – Manufacture – Trade and the vertical axis is volume. This gives us 9 segments which can design any enterprise in the value added manufactured products sector.

The bottom Pink band is the High value – low volume sector. This includes the sectors of Art, Craft art, Studio Crafts, Designer products, some exclusive luxury products as well as expensive bespoke products and services. If this were in the garment sector it would be called Haute couture.

  1. Design is done as an artist, little consideration for normal market needs and wants. This is the world of the “named”, interior, industrial and product designers as well as ceramic, jewellery and fashion designers.
  2. Most often this work is produced by an unnamed third party artisans. Or by an artist or studio craftsman themselves.
  3. The resulting wares are sold through galleries, exhibitions and special exhibitions, under the name of the designer/ maker; eg. Lucinda Mudge, Gregor Jenkins and Porky Hefer.

This is the world of Southern Guild, Crafts Council and the Gallery sector. Upmarket, exclusive, expensive, urban and white.

The next sector is Artisanal or Handicrat sector; medium volume – medium value sector (in Blue). If this were in the fashion world, it would be called Pret a porter (off the peg).

  1. The design is done based on market trends, fashion and in consultation with the market, through buyers, store owners, etc. Consideration is given to the more modest production processes and technologies of this sector.
  2. Manufacturing through simple production line manufacturing processes, by skilled artisans using any level of technology. Hand-tools, power tools, CNC all have a place in this environment. Set-up time and costs are lower than the next sector as the technology and volumes are at a lower level.
  3. The trade in these medium volume-medium value products is primarily through the Boutique market (not galleries and not mass market). It is the exclusive domain for independent and small, medium and even large boutiques like Galleries Lafayette in Paris, Anthroplogie, Habitat and Conran Shop in London. Cape Town has a few such store, but very few, if any in Johanneburg. I used to own such a store in Johannesburg, called Brighthouse. Much of is now online.

The final green sector is that of Mass production. High volumes – lower value.

  1. The design is done almost exclusively by Industrial Designers for mass production. There role is from sketch to final tooling.
  2. Manufacture is in technology intensive mass production factories. Relatively few workers are involved. CNC, robotics and high speed machines have long replaced workers. The so called deindustrialization of the South African manufacturing capacity is because of cheaper foreign products, primarily from China, expensive local labour and our small market, have all contributed to the demise of many factories.
  3. The Market for mass produced products it The Mass market. To best get our head around it, think of Masspart, they are this market. Large global mass market organizations and local mass market organizations like: Edgars, Mr Price, Pick and Pay, etc. This is not the market for the Artisan sector. If all the artisan makers in South African worked together, they could not stock one of these chains for one day. They rely on the volumes and prices from imported goods. They pay the rentals on the shopping malls and have the national footprint, this is how it is.


So where is the potential for enterprise creation?

The Artisanal sector (Blue) has the potential to create millions of jobs in urban and rural South Africa, but it needs a lot of sustained work and political will.

The pink exclusive sector, is not doing well. It is fueled by the likes of the Design Indaba.

The Green Mass production market has never really been in South Africa. Read why on my blog:


How then will we get this sector going?

  1. Recognize the Artisanal sector. (short term)
  2. Create proper policy. (medium term)
  3. Build the institutional capacity. (Medium term)
  4. Resources (medium term)
  5. Ongoing support (medium to long term)
  6. Commit to a long term generational programme (25 Years)


In conclusion, there are many opportunities in the many markets for Johannesburg, Gauteng and South Africa to create many highly profitable enterprises and the resultant work and jobs. We literally need to get our act together. We have the strong, happy, healthy hands to do the work which are currently idle. We have the land that is lying fallow and we have the materials that are being exported to countries that do have their act together. We cannot export leather and import shoes any longer.


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