1. Entrepreneurship Promotion “Role of Government and its Agencies”
21 October 2010
Presented By:
Kaybee Motlhoioa
Executive Manager : Corporate Services

2. South Africa at a glance1
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

3. 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 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)

4. Reasons for SME Failure Informal Formal 3 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 Contracts/subcontracts
Skills shortages
Low success rate of tenders awarded to SMMEs

5. support the Development of Entrepreneurship
How Can Governments,
at all levels,
support the Development of Entrepreneurship

6. Overview 4
How Can Governments at all levels support the Development of Entrepreneurship
Policy (Enabling Environment)
Delivery Vehicles (Agencies & Institutions for development & Support)
The Fiscus Funding for delivery
Entrepreneurship Promotion
Grant Funding
Incentives
Soft Loans
Business Linkages
Payment Assistance
Procurement Opportunities
Public Private Partnerships
Vertical & Horizontal Integration and coordination across all levels of Government
Effective monitoring, evaluation & reporting
Long term impact evaluation

7. Policy Framework Objective5
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)

8. The dti’s strategy for the
promotion of entrepreneurship 6
Strategic Actions
Strategic Pillar 1:
Strategic Pillar 2:
Strategic Pillar 3:
Creating demand for small enterprise products and services
Increase supply
for financial and
non-financial support services
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

9. Institutional Mandate National Small Business Advisory Council7
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. ,

10. Institutional Mandate Non-Financial Support Services8
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.

11. Institutions for Financial and Non Financial support9
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

12. Who is seda? 10
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)

13. Legislative Mandate 11
Implement national government small business strategy.
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

14. in coordination and partnership with other role-players
MISSION 12
to develop, support and promote small enterprises to ensure their growth and sustainability
in coordination and partnership with other role-players

15. Strategic Objectives
2008/9 – 2010/11 13
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

16. Target Market 14
20 %
80 %
Potential entrepreneurs

17. Delivery Model 30 Centres 9 Offices 50 Enterprise Information Centres15
EIC
SEDA
BRANCH
EIC
EIC
EIC
SEDA
NATIONAL OFFICE
SITUATED IN
PRETORIA
EIC
EIC
SEDA
BRANCH
TECHNOLOGY INCUBATORS
PROVINCIAL SEDA OFFICE
EIC
EIC
EIC
30 Centres
EIC
9 Offices
SEDA
BRANCH
EIC
EIC
50 Enterprise Information Centres
41 Branches

18. Seda’s Key Products & Services based on size and need16
Business
Information
Business Start
Business Grow
Business Build
BUSUNESS DEVELOPMENT SUPPOR DRIVERS
Diagnostic tools
Diagnostic tools
Diagnostic tools
Diagnostic tools
Pool of external experts to increase internal capacity
Training and
technical support
Business
planning
Tender advice
Generic and customised programmes
Business
information and
guidelines
registration
Mentorship and
incubation
Franchising
Business start
counselling
Sector specific databases
Enterprises
Services providers
Cooperatives
management
training
Export
readiness
Access to
finance referrals
Mentorship and
incubation
Shared service administration processes for the network
Business start
advice
Tender advice
Business
management
support
Client registration and tracking system
Franchising
Business
counselling
Export readiness
Established network infrastructure
Subsidised
expert services
Subsidised expert
Services
Subsidised
expert services
PRE-START UP
START UP
GROWTH
MATURITY

19. Seda Technology Programme17
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.

20. Business Linkages 18 Payment Assistance Procurement
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

21. Vertical & Horizontal Integration19
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
Seda integrating/coordinating activities of all support agencies at all levels of Government as well as collaboration with the private sector
Public Sector
Support Agencies
Parastatals
Private Sector
Chambers
Banks

22. Effective Monitoring & Evaluation20
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.

23. Long Term Impact Evaluation21
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.

24. THANK YOU 22
Questions & Answers