I often wonder what the heck I am doing travelling to emerging economies in search of small business lessons. Perhaps you are wondering that too. But a little on how I got into it all might clear things up.
I am just back from a 10-month stay in Brazil, my fourth visit there. My intention in moving there in February was that I wanted to live there (I might still go back), improve my Portuguese and learn more about one of the world's biggest emerging markets. While there I was also in Chile, my second visit after a brief trip in late 2011 while doing a study for the South African government.
It all started in 2003 when a year out of journalism school at Rhodes University in South Africa, I took up a job writing for a small business newspaper, Bignews. I didn't think it would be much. After all it was a small paper with seemingly little acclaim. And I knew next to nothing about business.
It turned out to be exciting times. It was nine years into the new democracy and with political freedom having been secured, debate was gaining momentum on how to transform the country's economy. Small business was already expected to play a big role, but many of South Africa's new small business institutions and programmes were proving not quite as successful as had been hoped.
With a readership of (mainly black) aspiring entrepreneurs and business owners Bignews was dedicated to helping reader to improve their business while at the same time acting as a voice in fighting for their rights. The next seven years proved to be fascinating as I learnt everything there is to learn from editor Barrie Terblanche about the struggles small businesses are up against in South Africa.
In 2006 I quit working at Bignews and following a dream to go back to the country my great-grandmother had grown up in, went on a three-month backpacking trip through Brazil (after having taught myself basic Portuguese). The paper was keen to keep me on and so roped me into writing a monthly column from Brazil. Like this I was introduced to the small business scene there.
Back to Brazil
At the beginning of 2010 I decided I needed a way to get back to Brazil again, but thought that perhaps there was something practical I could do there. Then it struck me that I could go there and look at some successful small business programmes that South Africa could learn from.
South African commentators had long been comparing the country's policies and programmes to those of more advanced countries like the US or the UK. But such comparisons could easily be dismissed as being unfair ones. South Africa is after all a developing country.
But what if one drew comparisons with fellow emerging economies. Like this if a programme or policy had success in another emerging economy, which faced similar problems in helping small businesses, it was more likely to work and be adopted in South Africa.
At the time it seemed a good idea to include India too, as together the three countries were part of the India, Brazil and South Africa (Ibsa) initiative.
A contact in The Presidency suggested I put together a research proposal to get some funding. I sent it to him a day later and he forwarded it to two research units. Within a week I was signing a research agreement with Trade and Industrial Policy Strategies (TIPS), a think-tank attached to The Presidency. Just two months later I was off to India.
The release of that my first TIPS report, in 2010, led to various presentations. But it was one particular one to the economic development committee in South Africa's Parliament that I will always remember. It left me feeling despondent and the few questions I fielded from Members of Parliament (MPs) indicated that they knew little on economics or small business or cared little about small firms.
One MP who had been constantly rocking his chair and looking seemingly distracted throughout my presentation, offered a strangely illogical response to my concern that the state's small business lending agency Khula had run up an over 42% default rate over a five-year period to 2010 on its credit guarantee scheme it ran in partnership with banks, saying "but chief we live in a developmental state".
Some MPs and government officials pointed out that it was difficult to draw much from India and Brazil (only after South Africa's acceptance into Brics in 2011 did interest rise) as these were bigger economies.
So I began trawling figures and reports to find smaller countries similar to South Africa that I could do another report on. This is how I came to Malaysia and Chile (initially I was going to visit Colombia but then found Chile had a number of more interesting looking SME programmes). That (second) report was completed by end of 2012.
So have my reports made any difference? This is a question I often ask myself. It all depends on how you believe policy is developed. In the end policy changes are often seem to be the combination of various voices and processes, rather than one report or presentation by a consult like myself.
But on closer reflection I believe I have perhaps made some difference. My two reports have generated significant debate and have been well cited by various sources. Some of my suggestions appear to have been taken up by government agencies too.
Since the publication of my first TIPS report I've realised that just as important as contributing new ideas, is to keep pressing the right people to get those policies considered and adopted. And so it was that I decided to start this blog earlier this year. I suppose you can call it a form of small business activism.
Timm writes on small business. He is in Cape Town at the moment. His regular blog returns in early January. Click here to sign up to his monthly newsletter.
Stephen Timm is a