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Policy & Regulatory Environment
BUSINESS DAY 17 July 2008 – Crime crippling small business, Chantelle Benjamin, Chief Reporter
A QUARTER of SA’s small businesses were reluctant to expand or employ more people after having been exposed to crime, according to a study commissioned by the Presidency.
Hardest hit were the smallest, most vulnerable companies, and the most successful entrepreneurs.
It was estimated that smaller businesses could expect to lose at least 20% of annual turnover to crime through direct and indirect costs, which could mean the difference between the survival and failure of a small company, especially since half the companies interviewed had no insurance.
The findings have serious implications for the government’s economic growth and job creation plans, which hinge largely on the development of a small business sector which the government believes has the potential to bring millions of people out of poverty and into the mainstream economy.
The study was commissioned by the Presidency, after a presentation by the Harvard-led group of economists advising the government suggested that crime may be a significant stumbling block to establishing a viable small business sector.
A total of 446 small and emerging businesses, almost all owned by blacks, in Cape Town, Durban and Johannesburg, were surveyed.
The survey found that businesses directly affected by crime were 20% less likely to have increased their staff numbers, and 10% were more likely to have shed jobs, with those in informal settlements or townships the most vulnerable.
Douglas Irvine, director of policy, programmes and research at SBP, the research company, said that while the finding that 54% of small businesses had been victims of crime was comparable with international standards, the “types of crime and the serious, violent nature of the crime was what set it apart”, with burglary and robbery “featuring prominently among concerns”.
Alan Hirsch, deputy head of policy co-ordination and advisory services in the Presidency, said the government was “very keen to turn this around”.
The survey has recommended that more effective policing was needed, with greater co- operation among business and the police, particularly in the townships and informal settlements, and that the trade and industry department consider developing mechanisms to assist emerging businesses, such as subsidies for burglar proofing.
www.businessday.co.za
BUA NEWS, Over 50% of emerging, small businesses targeted by criminals, Bathandwa Mbola
Johannesburg – Over 50 percent of emerging and small businesses in Johannesburg, Cape Town and Durban experienced one or more incidents of crime in the past year.
This according to the results of a survey, which was released on Wednesday, undertaken by SBP, an independent private sector development and research company.
The survey was commissioned by the Presidency to cover 446 small and emerging businesses, which are owned by historically disadvantaged black Africans operating in the three provinces.
The survey, which provides robust evidence about the experiences and perceptions of small business owners, found that 70 percent of the respondents that were interviewed felt vulnerable while at work.
The survey focused on businesses operating in five industrial sectors namely the retail, personal services, professional services, small manufacturing and construction, with the potential to contribute to economic growth and to support job creation.
It covered businesses located in inner city areas, large townships and informal settlements, and densely developed suburban areas such as shopping centres and business parks.
According to the report, 31 percent of businesses had been victimised twice or more, and almost 20 percent of businesses had been victimised three or more times.
Businesses based in Cape Town were more likely to have experienced crime than firms operating in Johannesburg or Durban.
Levels of concern were highest in the retail and construction sectors.
It found that 70 percent of retailers – from informal traders to formal fixed premises operators – rated crime as a major problem for business, while among construction firms the figure was 67 percent.
Burglary and robbery feature prominently in people’s concerns in townships and informal settlements, the survey found.
Inner city businesses also reported a high prevalence of burglary and robbery, but they also expressed higher than average concerns about petty theft and shoplifting.
Robbery accounted for 19 percent of incidents experienced by businesses in the survey– and in the majority of cases the perpetrators had been armed.
It also noted that 10 percent of incidents had been accompanied by physical violence against the victims.
Burglary accounted for 40 percent of incidents, while shoplifting made up just over 20 percent of the crimes experienced.
According to the report fraud, petty theft, vandalism, car theft and street violence together accounted for about one fifth of incidents.
Small businesses are important drivers of economic growth, job creation and black economic empowerment.
Speaking during the release of the report in Johannesburg, SBP Executive Professor Douglas Irvine said: “Small business owners are very worried about crime. They worry about its effects on their businesses, and they feel unsafe.“
Further he said business owners are also pessimistic about any prospect of relief.
“Two thirds do not foresee any decrease in crime levels – and indeed, over a third expect crime levels to rise even further.”
The incidences of violent and serious crimes, together with serious damage to or destruction of property, were higher among businesses in townships and informal settlements, where burglary accounted for 57 percent of incidents and robbery 28 percent.
In high density suburban areas, burglaries accounted for 43 percent of incidents, and robbery for 20 percent. In inner city areas the levels of burglary (32 percent) and robbery (13 percent) were considerably lower, but crimes such as shoplifting, petty theft, bag-snatching were more prevalent.
Business Against Crime South Africa Deputy Chief Executive Dr Graham Wright said it was essential that small businesses should continue with preventative measures to reduce their vulnerability to the rising incidences of business robberies.
Although levels of crime have been gradually decreasing, the scourge of crime remains a real challenge.
Over two million crimes were reported to the police in the financial year of 2007/08 in across the country. Of these, 52 percent were theft, commercial crime and property crime; 24 percent interpersonal violence; 9 percent robberies; 8 percent firearms and alcohol and drug; and 7 percent damage to property and arson.
Analysis of 2007/08 crime statistics shows an increase in crime victimisation of businesses – burglary of business premises increased by 8 percent, commercial crimes by 6 percent, and shoplifting by 2 percent.
Even more worrying is a 14 percent increase of robberies in residential premises. – BuaNews
BUSINESS REPORT, 17 July 2008, Sector is on the radar of criminals, Wiseman Khuzwayo
Johannesburg - More than 75 percent of small businesses admit to being vulnerable to crime, while 54 percent of these businesses have experienced at least one incident of crime in the past year, according to findings of a study commissioned by the office of the presidency.
Thirty-one percent of these businesses have been victimised more than twice and almost 20 percent have been hit three or four times.
The findings are in line with statistics released last month by the government, showing that crime against small businesses has been on the rise in the past year.
The survey says the 54 percent figure is closely comparable to the experiences of small business owners in the UK, the US and Australia.
The difference is that crime against local businesses tends to be more violent.
The objective of the survey, whose findings were released yesterday, is to analyse how much crime affects small enterprises, particularly emerging black-owned businesses.
The study was conducted in Cape Town, Durban and Johannesburg by the SBP (formerly the Small Business Project).
The research focused on five industrial sectors: retail, personal services, professional services, small manufacturing and construction.
"Small business owners are very worried about crime," says the study. "They are also pessimistic about any prospect of relief. Burglary and robbery are particular concerns."
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