Are you a pharmaceutical manufacturer or medical device / medical technology business operating in South Africa but struggling to deploy your Enterprise and Supplier Development (ESD) and Socio-Economic Development (SED) funds for your B-BBEE scorecard? 

You are not alone. 

In our engagements with the industry we find that many businesses operating in these sectors struggle to deploy their ESD and SED spend and in this blog post, we are going to unpack some of the reasons for this. 

Enterprise Development solutions for healthcare/pharmaceutical businesses 

There is no question that Enterprise Development is a game-changer for bringing early stage working capital to SMEs. 

As noted in the Sanlam Transformation Gauge report: 

“The National Status and Trends on the B-BBEE Report for 2021 reported an aggregated spend of R26bn by measured entities, which is 46.6% of their set target. This R26bn is more than 10 times the R2.567bn allocated to the Department of Small Business Development (DSBD) and its agencies by National Treasury for the 2023/24 financial year. Basic Education has been allocated R30.788bn for the same period. This shows the relative scale of the investment in ESD by measured entities.”

One of the challenges we see when looking Enterprise Development – and this subsequently segues into the Supplier Development discussion – is around finding beneficiaries who are either in the value chain or ecosystem. 

Fortunately, there has been quite a lot of work through the various incubators and other initiatives which has brought some quite exciting HealthTech / eHealth and other solutions which is opening up the Enterprise Development circles.    

Supplier Development for the sector 

Supplier Development is where the real pain point often lies as many of the pharmaceutical, MedTech or medical device businesses are often importers of technology and make limited use of local suppliers. 

This is where organisations need to think a little more laterally. 

For example: One of the biggest challenges that the sector faces is the lack of local manufacturing capacity. The development of a manufacturing business is not a cheap process – particularly in heavily regulated industries – and bringing in professional capital raisers and service providers can be a way of not only deploying your spend, but supporting capacity. 

Socio-Economic Development (SED) for pharmaceutical businesses 

SED is typically easier to deploy as organisations have identified SED causes that they wish to get behind. 

For instance, we have facilitated solutions including: 

• Tackling Period Poverty and developing menstrual health education through Blossomcare
• Cancer awareness and education with our partnership with Campaigning4Cancer 
• Access to healthcare and Patient navigation through public healthcare systems 
• Partnering with the Youth Employment Service (YES) to deliver healthcare sector solutions 

When we look at the sector, one of the comments we are seeing is that many organisations are pressed in terms of resources for analysing and selecting beneficiaries. 

This issue is often further compounded by issues where the highest impact SED beneficiaries may be at loggerheads with the Measured Entity around issues like government policy. 

This is one of the reasons we are actively exploring an impact fund for the sector to create an arms-length relationship while still ensuring the B-BBEE scorecard recognition for participating partners around ESD and SED. 

Looking for a partner to help you navigate ESD/SED solutions for the healthcare sector? 

If you would like to schedule a meeting to discuss innovative ways to deploy your ESD and SED solutions, please do not hesitate to contact us.