Kathy Gibson is at ITU Telecom World in Durban – Small, medium and micro enterprises (SMMEs) are the backbone of the economy, and it is vital that all stakeholders pull together to ensure their success.
“SMMEs are key drivers of the economy, so we have to figure out how to support them,” says Stella Ndabeni-Abrahams, deputy minister of telecommunications and postal services.
She points out that the daily struggle to develop products, find funding and sell services is real for SMMEs. “There is a need for interventions.”
The health of the whole economy is tied up in the wellbeing of SMMEs, Ndabeni-Abrahams adds. “When the SMMEs cry, big business cries too.”
This is because the multinationals need local companies, that can respond to what Africans want, to take their products to market.
“Enriching one man doesn’t work,” Ndabeni-Abrahams says. “We are a capitalist state but that doesn’t mean we have to be selfish.”
Among the interventions from government are a re-assessment of how long startups need to be protected in incubation hubs.
The State IT Agency is also implementing strategies to drive business and revenue to SMMEs.
IT tenders under R30-million will be awarded exclusively to SMMEs and black-owned companies, while tenders above R30-million must have at least 30% of their value sub-contracted to SMMEs.
Contracts for digital platforms or services will be outside of the tender system, but they have to comply with public policy outcomes as spelled out in the National Development Plan (NDP) and intellectual property (IP) must be produced.
Skills development is important, and there are calls for an SMME skills audit so government and business can get a better picture of the skills available on the ground.
“We don’t want to build tenderpreneurs,” Ndebeni-Abrahams says. “We need to be building techpreneurs.”
We should be under no misapprehensions about the potential for technology SMMEs – there is no shortage of smart young companies.
What we need to do is ensure there is an enabling environment, says Barlow Manilal, chief executive of the Technology Innovation Agency (TIA).
The TIA is an agency of the Department of Science and Technology, focused on helping South Africa move from a resource-based economy to a knowledge-based economy.
The enabling environment needs to start with the legislative regime, Manilal says.
“There needs to be a lot more liberal policies. SMMEs, by their nature don’t want to be encumbered by legislation. They also don’t want to be corrupt, they want to conform but in a way that allows them to be agile.
“Agility is core to what an SMME is.”
In terms of funding, there is a lot of money in the system, Manilal points out. “But the programmes are not well co-ordinated. We need to harmonise that, find the linkages and support SMMEs.”
Global companies typically hesitate to let SMMEs install or service their equipment because there is a perception that small local firms are not skilled or equipped to maintain the brand or standards.
“When international companies talk about branding and quality, look at the automotive industry,” Manilal says. “The best quality BMWs in the world are made in Rosslyn. The best-quality Mercedes C-Class cars are from East London.
“We have the ability to produce the best cars in the world – and this is because the automotive industry has the best support instruments, the best enabling legislation, and the best SMME support programmes.”
Arguably the main stumbling block to SMME success is mindset, Manilal point out.
“I am privileged to engage with thousands of innovators, and I can say that we have among the most talented, creative and smartest people in the world. Our start-up companies are amazing and resilient.
“But we are always hung up on negative sentiment, and are so tentative.
“Our SMMEs don’t have to play second fiddle to anyone in the world. We just need the conviction.”
Our attitude when it comes to failure also needs to be examined, Manilal says. “We have a mindset where failure is a stigma and often fatal for the business. So when we fail we hide it.
“But failure is part of the journey: we need to give SMMEs the space to fail, learn the lessons and bounce