Social Enterprise

SOCIAL ENTERPRISE

Development Impact Support (DIS) department

 

The Development Impact Support (DIS) department promotes local economic development.

Objectives

  • To support industrial development capacity; and
  • Promote entrepreneurship

 

The DIS department is a unit within the IDC that is responsible for the establishment and facilitation of funds and support for public local economic development agencies. The agencies have been designed to bridge the gap between the public and private sectors and other development organisations at a local level. The DIS department supports the IDC’s overarching strategic direction through the implementation of its Vision, Mission and Objectives in all the nine (9) provinces of South Africa – which is in alignment with the following IDC outcomes:

 

  • Sustainable employment;
  • Regional equity;
  • Environmentally sustainable growth;
  • Growing sectoral diversity;
  • Growing the SME sector;
  • Broad-based black economic empowerment; and
  • Ensure new entrepreneurs enter the economy.

A key element of the department achieving the above outcomes is the creation of conducive local environments to mobilise investment and activity that can create sustainable employment including:

 

  • Linking the public, private and community sectors – promotion of strong social dialogue to focus stakeholders on growth and employment creating activities (social capital formation);
  • Supporting job creation initiatives;
  • Enhancing local and regional competitiveness and social equity; and
  • Supporting broader based participation in the economy (economic transformation).

Principles

Taking into account DIS’ mandate in relation to the projects it is undertaking, the department has set the following core principles on which to operate:

Social capital

A key element in the creation of integrated sustainable development is the role of social capital. Social capital is the connection within and between social networks that enable people to act collectively. Social relationships and networks serve as a form of capital because they require investment in time and energy, with the anticipation that individuals or groups can tap into these resources when necessary. The more individuals and groups invest in these resources, the more they are likely to benefit in the future. Social capital is a key resource for community economic development as it can be used to aggregate and leverage other development assets. It is for this reason that DIS needs to incorporate social capital into the operations of various agencies.

Creating sustainable communities

Another central concept impacting on DIS is the need to promote holistic and integrated sustainable communities. Sustainable communities are places where people want to live, work and play. Places that meet the diverse needs of existing and future residents. The sustainable communities that DIS strives to create through its supporting agencies include: active, safe and inclusive communities with a strong local culture; environmentally sensitive communities; well-connected communities with good transport and communications infrastructure; and well-serviced by public, private and community amenities.

Innovation

A new spirit of innovation and creativity is being nurtured within the IDC. New and “out-of-the-box” solutions are actively being sought to address the persistent challenges of poverty and underdevelopment. It is thus incumbent upon DIS to think and act beyond the confines of what can be termed “normal business” practice.

SOCIAL ENTERPRISE

In line with a growing acknowledgement that development institutions need to be more cognisant of the direct bearing that environmental and social issues have on economic growth and development, and the growing awareness that addressing these issues directly provides great opportunities for job creation and economic growth, the DIS has a programme aimed at supporting social enterprises.

For the IDC, a social enterprise is an entity that adheres to the following:

Places social and environmental issues and job creation of social value as its primary focus

Uses business principles to create, build and maintain social value

Has a long-term strategy towards a degree of self-sustainability (with at least 50 percent of operating costs recovered from revenue generated through its own trading); and

Re-invests a majority of its revenue back into the business to ensure a larger social impact

The DIS envisages that this social enterprise fund will have social and environmental impact as its primary focus, with economic benefit. Among other things, the fund will be used to provide investment to establish (start-up) and develop (grow, replicate, scale) social enterprises and entrepreneurs; facilitate the integration of these enterprises into the main-stream economy; build and strengthen social capital and inclusivity; and support initiatives where community empowerment and integration of first and second economies are key.

THIRD PARTY FUNDS

Uplifting South Africa’s craft industry. The IDC’s Development Impact Support department supports the Department of Trade and Industry by managing funds for specific economic development projects. The support is provided through the:

Vuth'Umlilo Fund

The Vuth’Umlilo Fund provides resources and support to municipalities to ensure the efficient delivery of local economic development as an approach to stimulate growth. Completed projects funded by the Vuth’Umlilo Fund include training and employing young people through the Local Economic Development Cadet Programme, in which learners were trained in economic development and governance and were placed in local economic development agencies and municipalities across the country. It also supported a forestry initiative in KwaZulu-Natal; business retention and expansion across several provinces; a chicory production and beneficiation, and tourism project in Ingquza Municipality in Eastern Cape; mining in Mutale, in Limpopo; and an energy project in Blue Crane Municipality in Eastern Cape.

The National Craft Fund

This was established to encourage the competitiveness of South Africa’s craft industry locally and internationally. It supports craft hubs and provincial investment agencies (Pipas) that are aimed at improving the levels of competitiveness of craft producers.

 

Specifically, the fund aims to help crafters overcome challenges such as production inefficiencies, lack of quality control systems, costing and pricing, and inability to follow through on orders.

 

To date, R3.5-million has been approved for a craft hub in Western Cape and R8.3-million has been approved for local economic development project preparation programmes across the country. In addition, R6.9-million will be leveraged for the approved projects through the public and private sectors.

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