In South Africa, Enterprise and Supplier Development is a means for large companies to contribute to black owned suppliers within their supply chain and black owned businesses.
The Stellenbosch Business School defines Enterprise Development as, “the act of investing time and capital in helping people establish, expand or improve businesses. Enterprise development assists people in living; it helps them out of poverty; and it leads to long-term economic growth for themselves, their families and their communities.
Enterprise and Supplier development involves growing small and medium-sized black businesses by providing finance, support, and assisting business development and sustainability. By investing in a programme for enterprise and supplier development, it uplifts the quality of entrepreneurs and all the people they hire. These programmes lead to long term economic growth.
Enterprise and Supplier Development is also one of the 5 elements in the Broad-Based Black Economic Empowerment (BBBEE) codes. ESD is listed as one of the qualifying contributions which reflect positively on the companies BBBEE scorecard.
Large companies are required to spend 2% of their net profit after tax annual on supplier development and a further 1% of the net profit after tax on enterprise development and sector specific programmes.
This element is also a “priority element!”
Large companies play a pivotal role in driving inclusive and sustainable development. They create a positive impact by improving and growing development. This is achieved by investing in a ESD programme to include small business into their value chains and local communities.
For more information on investing in a ESD programme, contact us at New Generation Mindset. Our in-house consulting and advisory service, provides social responsibility, transformation and economic empowerment solutions to large corporate clients and multinationals.
We engage, transform and inspire our clients to develop and communicate a strategic, value-based view of social and economic enfranchisement.