Further cooperation needed to grow small business: Davies

Friday, February 22, 2013

Johannesburg - In order to reach the objective of 250 incubation facilities for small business to grow the economy, further cooperation between government and business is necessary, Trade and Industry Minister Dr Rob Davies said on Friday.

He was speaking on Friday at the Exhibition of Incubation and Socio Economic Development Projects - which American companies in South Africa are implementing.

Davies said that although South Africa had operating incubation facilities that were facilitated by the Small Enterprise Development Agency (Seda), these were not enough to take on the challenges that the country faced.

“While we set ourselves a target of 250 incubators emerging in South Africa in the next five years or so, we realise that the goal of Seda and government programmes  is only going to be part of the story. We need to encourage much more involvement by the private sector,” he said.

Seda is an agency of the dti and is running a technology programme that supports 38 multi-sectoral incubators operating across eight provinces. “They’ve supported 4893 Small, Medium and Micro-sized Enterprises (SMMEs) over the last six years and established 1210 SMMEs,” said the minister.

There was progress made but “this was not big enough”.

“We need to multiply those incubation programmes across the country,” said Davies.

He added that a lot of SMME’s were excluded from playing a role in the economy during the apartheid era.

“What we need to develop in South Africa are entrepreneurs that can be active in the productive economy of the country, not just traders ,” said the minister.

Incubation facilities are successful in that they group together SMMEs that fall within a certain sector  and they benefit  from mentoring, skills development and training. The best ones that stand a chance of being most successful are those that have a direct link to big companies.

“Multi-nationals have such programmes but we want to encourage more of that,” said Davies.

American Chamber of Commerce in South Africa (AmCham) President Donna Oosthuyse said that small business contributed to job creation in developing countries,  adding that  small business was not easy to sustain.

She said it was critical for small business to receive support.

Over 500 American companies do business in South Africa.

Davies said: “If we are to have 250 incubators over the next five years, we need to encourage involvement by the private sector.” He added that AmChan had been among those the dti had approached first with regards to this.

Last September the department announced the creation of an incubation support service to incentivise business to come to the party.  To date 44 applications have been received with three having been approved, explained the minister.

Touching on the issue of late payments to SMMEs, the minister said that government is addressing this. “If you don’t make the 30 day payment rule, it will become an audit issue. We are ramping it up,”  he said.

Davies further added that becoming an entrepreneur required work and dedication and that entrepreneurs are essential to help in the fight against unemployment and poverty. - SAnews.gov.za