Editorial Comment: Paradigm shift vital to understand job creation
STATISTICS provided by the National Social Security Authority on new job registration carried in The Herald Business yesterday highlighted the importance of a paradigm shift in Zimbabwe with regards to perceptions on employment creation.
The paradigm shift that is required in Government, industry and academic circles is that the huge industry mentality is a thing of the past. A new economy anchored on micro, small to medium scale enterprises has taken space in the economy.
Statistics show that retailers, wholesalers and commodity brokers have become huge employers. In summary NSSA processed 4 071 new company registrations during the year 2013 and a noble 1 700 during the six months to June 2014.
Of the 4 071 companies registered in 2013 almost 50 percent were retailers, wholesalers and commodity brokers with very few players joining the textile and clothing sectors of the economy. A similar trend is also quite evident for half year 2014.
With regard to employment levels created, of the total 37 827 employees registered in the year 2013 close to 40 percent are in the retail, wholesale and commodity broking sectors followed by other labour intensive sectors such as farming and construction.
While huge conglomerates are desirable, facts on the ground show that the Zimbabwean economy has shifted from the big companies to micro, small and medium scale enterprises. A 2013 report by the Ewing Marion Kauffman Foundation found that companies less than a year old with under five employees have created about one million jobs every year for the last three decades in America. Those with five to nine employees add about half a million every year.
The fact that small companies are taking space in economic growth and development also shows that local entrepreneurs are stepping up to the plate, exploiting the opportunities in the various sectors. Local entrepreneurs who will benefit from this foundation of the Zimbabwean economy going forward have taken the lead in job creation.
The statistics confirm one of Zanu-PF’s 2013 election campaign pillars which put job creation central to economic development.
Further, the fact that more than 50 000 jobs were created in the last one and half years shows a positive development where most of these companies are owned by Zimbabweans.
While huge conglomerates employed thousands of Zimbabweans early after independence, most of these companies were foreign owned with very few indigenous Zimbabweans owning businesses.
A nation’s economic growth should be locally based, built on its citizenry. Zimbabwe had for years depended on multinationals, including Anglo American, Rio Tinto, BHP Billiton, and many others, which employed several thousands of locals. Naturally, multinationals are there to extract profits and their policies protect the interests of their countries of origin, understandably so.
Therefore it is imperative for Zimbabwe to move from over-reliance on multinationals headquartered outside the country and develop the capacity of the local entrepreneur.
The other important factor that has not been captured is the entrepreneurial appetite by Zimbabweans. The new trend shows the participation of the local population in the mainstream economy, which was for decades closed and mostly the preserve of large conglomerates.
The fact, that there has been movement in the sense that new jobs have been created shows that with more effort and co-ordination, more jobs could be created.
Most importantly, more local entrepreneurs who will employ more locals could be raised during this time.
Together, entrepreneurial companies add even more jobs to the economy.
Zimbabweans’ entrepreneurial skills can never be overlooked. The many small scale complexes dotted around the country where locals manufacture furniture, sell food and agricultural equipment show the extent of entrepreneurial mindset.
It is, therefore, high time Government put more effort towards helping to grow and formalise these businesses.
Some of the measures the Government should fast track to help strengthen the locals to grow their firms include decriminalisation of artisanal and small scale miners, registration of vendors and organisation of micro, small and medium enterprises.
The Government, through the Ministry of Mines and Mining Development in conjunction with the Chamber of Mines of Zimbabwe held a consultative workshop with small scale miners yesterday to highlight critical issues of co-operation.