The overall impact of the World Cup 2010 soccer showpiece for SMEs was negligible and that was largely a factor of the policies of soccer's governing body Fifa, the complicity of government and lack of connectivity.
These were the findings of the 2010 SME Survey carried out by the National Youth Development Agency (NYDA) and World Wide Worx.
Arthur Goldstuck, World Wide Worx principal researcher says it is very easy to define the impact of the World Cup on small business. “In short, there was little in it for the SME.”
However, he points out that it doesn't mean the World Cup wasn't a success or that it didn't bring benefits to SA a whole.
“Rather, what is clear is that Fifa locked down the economic benefits, making them available only to selected service providers. In effect, the little guy was frozen out almost completely,” he says.
Goldstuck blames lack of connectivity among the SMEs as one of the biggest reasons why the emerging businesses failed to enjoy a larger share of the global soccer showpiece. According to the survey findings, more than a third (37%) of SMEs in SA have no Internet connectivity at all.
Steven Ngubeni, CEO of NYDA concurs, saying there is a direct correlation between connectivity and profitability because businesses that have connectivity are able to respond much quicker to business opportunities.
Goldstuck explains that before the event, the SME Survey showed that 86% of small businesses expected the World Cup to boost business in general.
However, he says, just 45% anticipated any benefit to their own businesses, adding that this year's research bears that out: 92% believed the event as a whole was a success, while 42% felt that there was adequate support from business advice structures.
“The significance of this - that expectations were closely matched to the outcome - is that the South African SME owner understands his or her business and its position in the macro-economy very well. Small businesses were not swayed by the hype,” Goldstuck notes.
He adds that expectations were based on the kind of support which was accessible to the SME. “Those who got support, benefited from it,” Goldstuck notes, adding that this finding confirms the value of general support, which reinforces the ability of the SME to plug into and provide services to an event of this magnitude.
Drilling down into the vertical sectors and their direct benefits from the World Cup, it was also found that specific sectors that expected major benefits but were let down included transportation, manufacturers and engineering firms, where only 10% felt direct benefit, construction, with only 8% benefiting, and retailers (13%).
The survey also discovered that the sector that saw the least benefit was printing and publishing, at a mere 4%. On the other hand, 26% of respondents in the advertising industry, 30% in hospitality and accommodation and 30% in the government sector said they had benefited - a lot higher, but still less than a third of respondents in those sectors.
“This confirms the contention that Fifa had firm control of which businesses could participate in the benefits of the spectacle - and small business was certainly not invited to the party,” Goldstuck asserts.
Besides lack of connectivity, the survey also determined that crime and competition are the major worries besetting the SME sector.
“Crime is far and away the most important concern for SME decision-makers. This is probably due to the fact that emerging businesses remain more focused on getting their businesses properly established, while those that are already established make more likely targets for criminals,” he says.
After crime, the issue that causes the most sleepless nights is that of competition, the survey also found out.
“In the emerging SME sector, 14% of businesses consider competition to be a major headache. The proportion is even greater among established SMEs (18%). This indicates that, in a tight economy, the same businesses appear to be fighting for a smaller piece of the pie,” notes Goldstuck.
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