The promise of a World Cup windfall for South African business in 2010 is likely to fall dramatically short for small, medium and micro enterprises (SMMEs).
That’s one of the key findings of SME Survey 2009, which set out to gauge expectations of the event among SMEs. Small, medium and micro enterprise owners, it emerged, tend to be overwhelmingly positive for the country as a whole, but have a gap in expectations for themselves.
Sponsored by Standard Bank, National Youth Development Agency (NYDA) and Fujitsu, SME Survey is in its seventh year and polls 2,500 SME business decision-makers on the issues they face and how they overcome these to remain competitive and sustainable in the current economic climate.
According to principal researcher Arthur Goldstuck, some 86% of SME owners believe that the World Cup will be positive for the country. “However, whether this benefit to the nation will filter down to the individual SME is more difficult to say. FIFA is known for its zealous protection of the rights of its sponsors to do business in zones surrounding match locations and therefore, to a large extent, works to exclude the participation of ‘outside’ organisations.”
Since sponsorships are far beyond the means of any SME, it does render direct benefit practically impossible. SMEs are well aware of this; just 45% believe the event will benefit their business directly.
Goldstuck adds: “Visitors to the event are very likely to do more than just attend matches. That allows for some spill-over of benefits.”
“Even though not as many young people will benefit from 2010 opportunities as we had hoped, an opportunity exists for young people to use their creativity and offer tourists the African experience. Young entrepreneurs can attract tourists to their communities and offer services such as, accommodation, food and beverages and even sell cultural artefacts,” Andile Lungisa, chairman of the NYDA.
An interesting fact that emerged from the research is that those companies that have applied for funding from the National Youth Development Agency (NYDA) tend to be more confident about the impact of the World Cup than the overall sample. Less surprising is that this group also tends to be more positive in terms of its perception of the relevance and effectiveness of Government support programmes for SMEs. Of those that have received support, 73% believe the World Cup will boost their own businesses, against 45% for the overall sample.
“They are also largely positive having seen that NYDA had a working relationship with the Local Organising Committee in terms of identifying and training volunteers for the FIFA Confederations Cup and now for the FIFA World Cup," says Lungisa.
Interestingly, when considering the impact of the World Cup by region, it emerges that the most confident is Limpopo province.
Goldstuck says “The Peter Mokaba Stadium in Polokwane serves as a beacon of hope for many; it is relatively a lot more significant for Limpopo than, for example, the facility in Green Point is to the Western Cape, since it is just one of many tourist attractions in Cape Town.”
In Limpopo province and the Eastern Cape, 88% of respondents are positive about the impact of the World Cup on the country, while in the Western Cape it is 86% and Gauteng 84%. “In Gauteng, people are as aware of the disruptions as they are of the games,” Goldstuck remarks.
Similar figures to that of Gauteng emerges from Mpumalanga and KwaZulu-Natal. “Again, there is a lot of activity in these provinces; the World Cup is a major development for them, but amid ongoing development that is happening regardless.”
Surprisingly, the Free State and North West province come in far lower, at 81% positive. “That is still overwhelmingly enthusiastic, but it would appear that SMEs in these regions are less likely to believe there will be any direct or other benefit from the event,” Goldstuck notes.
In terms of SME turnover relative to positive expectations of the World Cup, only one sector stands out; among those micro-enterprises with a turnover of less than R150 000 per annum, 93% are positive about the World Cup versus the average of 86%.
“Two factors are suggested here; one is that owners of these small enterprises have seen a gap which they will take advantage of, the other is that they have hopes which may be unrealistic,” Goldstuck says.