Transcript Document

Entrepreneurship Promotion
“Role of Government and its
Agencies”
21 October 2010
Presented By:
Kaybee Motlhoioa
Executive Manager :
Corporate Services
South Africa at a glance
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 Key Economic Sectors:
Mining services, Transport, Energy,
Manufacturing, Tourism and
Agriculture
 Population
49,32 million (mid-year estimates for
2009 – Statistics South Africa)
 Government
Constitutional Multiparty
three-tier (local, Provincial and
Nationa) democracy
 11 Official Languages
SMME Performance
2
Growth Trends

SA Economic Growth 5,4% in 2006, 5,1% in 2007 and 3,1% in 2008

in 2007 there were 27% more formally registered enterprises in the Stats SA Integrated Business
register than in 2004.

Almost 40 000 new entrants annually

40 % GDP Contribution
Main contributing Sectors

Construction - Services- Transport, telecommunications and financial services

Spread of SMME representation in above sectors

Construction and services and retail account for 90 % ( by number) of informal sector

Formal small business concentrated in business services ( 44%) trade (23%),manufacturing 12 %

Sector growth highly depends on domestic expenditure
Constrained participation in the manufacturing sector

Market failure constraints ( small business access to financial and industry high value chain markets)

Skills versatility constraints ( cost of staff training for small businesses, not all setas have a small
business focus)
Reasons for
SME Failure
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Informal
Formal
Lack of Infrastructure
Low export market
Low profit margins
Difficulty competing in SADC export
Lack of collateral
High local company tax
Relatively high velocity of stock turnaround
Insufficient
collaboration
with
small
business in terms of purchases of raw
materials
Limited involvement of informal SMMEs in Skills shortages
Contracts/subcontracts
Low success rate of tenders awarded to
SMMEs
How Can Governments,
at all levels,
support the Development of
Entrepreneurship
Overview
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Policy
(Enabling
Environment)
Delivery
Vehicles
(Agencies &
Institutions for
development &
Support)
Long term
impact
evaluation
Effective
monitoring,
evaluation &
reporting
Vertical &
Horizontal
Integration
and
coordination
across all
levels of
Government
How Can
Governments
at all levels
support the
Development
of
Entrepreneurs
hip
Business
Linkages
•Payment
Assistance
•Procurement
Opportunities
•Public Private
Partnerships
The Fiscus
Funding for
delivery
Entrepreneurs
hip Promotion
•Grant Funding
•Incentives
•Soft Loans
Policy Framework
Objective
To create an enabling environment for the promotion and
development of entrepreneurship

Enabling Acts and Strategy for small business
 National Small Enterprise Act 102 of 1996
 Amended by
 National Small Business Amendment Act 29 of 2004
 Public Finance Management Act 1999 Act 1 of 1999
 Strategy
 National Strategy for the Development and Promotion of Small
Business in South Africa (Notice No 213 of 1995)
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The dti’s strategy for the
promotion of entrepreneurship
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Strategic Actions
Strategic Pillar 1:
Increase supply
for financial and
non-financial support
services
Strategic Pillar 2:
Creating demand for
small enterprise
products and services
Strategic Pillar 3:
Reduce small enterprise
regulatory constraints
As an integrator of policies, institutions and programmes, the strategy seeks
to ensure that adequate support and delivery mechanisms exist across the entire
entrepreneurship continuum• pre-start-up to start-up,
• business survival, growth and expansion,
• turnaround of ailing businesses
Institutional Mandate
National Small Business Advisory
Council






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Advocate for the small business community and advise the
government on relevant issues;
Monitor the impact of small business in the economy;
Monitor the impact and effectiveness of existing initiatives and
programmes for small business development;
Participate in the assessment of impact and effectiveness of
existing and proposed legislation on small business;
Strengthen Liaison with the small business community to identify
their constrains and concerns;
Make proposals to government through the Minister and other structures of government
based on the Council’s assessment of all above;
In partnership with the dti, commission annual review on small
business in South Africa. ,
Institutional Mandate
Non-Financial Support Services
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
Effective implementation of the national policy;

Design and implementation of the standard national delivery framework;

Integration of all government-funded small enterprise support agencies across
all spheres of government;

Design and implementation of support programmes;

Establishment of provincial structures for network expansion and management; and

Generally strengthen the capacity of service providers to support small enterprises and
small enterprise capacity to compete successfully domestically and internationally.
Institutions for Financial and
Non Financial support
 Small Enterprise Development Agency (Seda )
 Company and Intellectual Property Registration
Office (CIPRO)
 South African Micro-finance Apex Fund (SAMAF)
 Khula Enterprise Limited
 National Empowerment Fund (NEF)
 Industrial Development Corporation (IDC)
 Other Provincial Agencies
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Who is seda?
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Small Enterprise Development Agency (seda) was established in December
2004, through National Small Business Amendment Act, 29, 2004.
seda was formed through the merger of Ntsika Enterprise Promotion
Agency, the National Manufacturing Advisory Centres (NAMAC) as well as
the Community Public Private Partnership Programme (CPPP). Godisa
incubation programme, technology transfer programme, and the SA Quality
Institute were later incorporated into Seda as a ringfenced programme viz
Seda Technology Programme (sTP)
Legislative Mandate
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1. Implement national government small business strategy.
2. Design and implement a standard and common national delivery
network that must uniformly apply throughout the Republic in
respect of small enterprise development, integrating all
government funded small enterprise support agencies across all
tiers of government.
Section 10 of Act 29 of 2004
MISSION
to develop, support and
promote small
enterprises to ensure
their growth and
sustainability
in coordination and
partnership with other
role-players
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Strategic Objectives
2008/9 – 2010/11
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 Enhance competitiveness and capabilities of small
enterprises through co-ordinated programmes and
projects.
 Ensure equitable access for small enterprises to
business support through partnerships
 Strengthen the organization to deliver on its
mandate
Target Market
20 %
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Characteristics
Opportunity-driven/
Entrepreneurial
Medium
enterprises
•Less than 200 employees
•Developed technical & business skills
•Less than 50 employees
Small enterprises
Small enterprises
•Developed technical/limited business skills
•Less than 5 employees
80 %
Micro
enterprises
Micro
enterprises
•Limited technical and business skills
Survivalist enterprises
Necessity-driven/
•Individual self employment
Survivalist enterprises
Survival
Potential entrepreneurs
•Very limited technical and business skills
Delivery Model
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EIC
EIC
SEDA
BRANCH
EIC
EIC
EIC
SEDA
NATIONAL OFFICE
SITUATED IN
PRETORIA
EIC
PROVINCIAL
SEDA OFFICE
EIC
SEDA
BRANCH
EIC
EIC
9 Offices
30 Centres
EIC
SEDA
BRANCH
41 Branches
TECHNOLOGY
INCUBATORS
EIC
EIC
50 Enterprise
Information
Centres
Seda’s Key Products & Services
based on size and need
BUSUNESS
DEVELOPMENT
SUPPOR DRIVERS
Pool of external experts
to increase internal
capacity
Generic and customised
programmes
Sector specific
databases
Business
Information
Diagnostic tools
Business
information and
guidelines
Business
registration
Business Start
Diagnostic tools
Business
planning
Business start
counselling
-Enterprises
Access to
finance referrals
-Services providers
Shared service
administration processes
for the network
Business start
advice
Client registration and
tracking system
Business
management
support
Business Grow
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Business Build
Diagnostic tools
Diagnostic tools
Training and
technical support
Tender advice
Mentorship and
incubation
Cooperatives
management
training
Franchising
Export
readiness
Mentorship and
incubation
Tender advice
Franchising
Business
counselling
Export readiness
Subsidised
expert services
Established network
infrastructure
PRE-START UP
START UP
Subsidised expert
Services
GROWTH
Subsidised
expert services
MATURITY
Seda Technology Programme
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sTP is made up of the following:•
Incubation division
• Technology Demonstration Centres focuses on demonstrating, exhibiting and providing
training in the use of available technologies with respect to value addition processes
• Technology Incubators provide a sheltered and protected environment within which to
support and nurture technology-based startups and enterprises requiring
“rehabilitation/resuscitation”
•
Technology Transfer division
• The Technology Transfer division will provide a range of technology transfer services that
will enable small and micro enterprises to have access to appropriate technology, funding
for technology transfer interventions, technical advice and support and business assistance
•
Technology for women division
• This division provides technology transfer services to women owned enterprises (No funds
are available for this division in 2009/10)
•
Quality division
• This division provides services to enhance the quality and services produced by South African
entrepreneurs for local and export market through the provision of advice and technical
support.
Business Linkages
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Payment Assistance


Cabinet mandated the Department of Trade and Industry to develop a framework to step-up
measures for government compliance to the 30 days payment cycle and to establish a
Public Sector SMME Payment Assistance Hotline
Seda was tasked with the implementation of this mandate
Procurement

To contribute to an increased participation by small businesses in accessing markets
through tenders and request for quotations from both the private and public sectors.
Community Public Private Partnerships (CPPP)

To promote the establishment of cooperatives and collectively owned enterprises to ensure
their growth and sustainability by facilitating public and private partnerships
Vertical & Horizontal
Integration
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Design and implement a standard and common national delivery network that must uniformly apply
throughout the Republic in respect of small enterprise development, integrating all government
funded small enterprise support agencies across all tiers of government
Section 10 of Act 29 of 2004
• NATIONAL GOVERNMENT
• PROVINCIAL GOVERNMENT
• LOCAL GOVERNMENT
Public Sector
• Support Agencies
• Parastatals
Private Sector
• Chambers
• Banks
Seda integrating/coordinating
activities of all support agencies
at all levels of Government as well
as collaboration with the private
sector
Effective Monitoring &
Evaluation
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The dti annually conducts a review on the status of small business in SA.
The review covers a standardized statistical analysis of trends and performance of small
enterprises focusing on the following aspects:
• Number of entrepreneurs, sectoral distribution, geographical spread, distribution by demography,
entrepreneurial dynamism (entry & exit) and contribution to the economy by employment and GDP.
Data is sourced from credible reports of the following institutions:
• Stats SA reports (e.g. Labour force surveys & Integrated Business Register, etc.), SA Reserve Bank
Quarterly Bulletins, Regional Services Council Levy databases and reports, SA Labour reports, Bureau
of market research institution reports, CIPRO register of companies, etc. ( Source index attached)
The Annual Review Report is currently the source that provides statistics on the profile of small
business sector in South Africa.
The research process currently relies on best available national data, however, further work in
refining this report is in progress, a project led by the National Small Business Advisory Council.
Long Term Impact Evaluation
The Department of Trade & Industry (the dti) together
with the World Bank is currently piloting an Impact
Evaluation in one province (Western Cape)
Through randomized sampling, track control and
treatment groups on an annual basis.
The study is to be replicated nationally in 2010/11.
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THANK YOU
Questions & Answers
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