In SA, approximately 80% of SMEs fail within their first year, but incubation, or small enterprise development acceleration, has proved to increase the potential for long-term SME sustainability and success.
These were the statistics from of the Small Enterprise Development Agency or 'Seda' Technology Programme (STP), which claims 80% of small enterprises in the programme incubators survive the maiden year of trading.
The STP was established in 2006 by the Department of Trade and Industry (DTI), through the merger of Godisa Trust and the National Technology Transfer Centre, as part of government's national strategy to consolidate small enterprises support interventions across the various government departments and agencies.
According to the STP, the programme specifically targets entrepreneurs who want to develop their businesses through innovation and technology.
“It provides access to financial, strategic, technological mentoring, coaching and technical expertise as well as management support while addressing the technology needs of enterprises, the programme says.
These enterprises comprise ones operating in the science, engineering, metals, construction, manufacturing, ICT, mining and agricultural sectors, and those involved in development and technology transfer projects.
It adds that one of the programme's core focus areas is technology business incubation, which revolves around empowering SMEs to use technology to improve the competitiveness of their businesses.
Diverse sectors
The programme currently funds and works directly with 30 incubators across the country, ranging from ICT SMEs to enterprises in the aluminium, platinum and bio-diesel industries.
“Not only do these incubators provide necessary business infrastructure and strategic guidance, but also an environment of learning and sharing in which information, experiences and ideas are freely exchanged,” it says.
This, according to the programme, builds entrepreneurs' skills and knowledge bases, better preparing them for business in the open market, with a view to increasing profitability and growth.
“I really believe the STP's interventions lower the barriers to entrepreneurship and are part of the solution to local economic development and unemployment.
“In the past financial year, the STP created 6 778 direct, indirect and casual jobs; increased its support to 656 SMMEs; and assisted in increasing the turnover of the SMMEs it supports from R129 million in the previous year to R169 million in the past financial year,” says Jayesh Ravjee, STP Acting Executive Manager.
One of the STP's 'incubatees' is the Gauteng-based Softstart BTI technology and business incubator, which promotes entrepreneurial development in the ICT sector.
Skills empowerment
It adds that the incubator specifically focuses on young IT graduates and professionals and previously disadvantaged groups, empowering them through appropriate skills development to pursue ICT-oriented entrepreneurial opportunities.
“Incubation is incredibly important to ICT entrepreneurs, particularly those in the early stages of their business development. We are proud to say that our incubator is a level 2 contributor with a 125% B-BBEE recognition level and a Value Adding Enterprise,” says Leonie Greyling, Softstart BTI's CEO.
“We look forward to hosting more opportunity-driven entrepreneurs with a passion for ICT in the future,” Greyling adds.
On the other hand, Ravjee points out, in addition to incubation, the STP also focuses on quality management, ensuring SMEs have access to quality control, and technology transfers, which makes new technology available to incubators across the country.
The STI is housed within Seda, which is mandated by the DTI to develop and support small enterprises in SA, ensuring their growth and sustainability.
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