Presentation on theme: "Entrepreneurship Promotion “Role of Government and its Agencies”"— Presentation transcript:
1 Entrepreneurship Promotion “Role of Government and its Agencies” 21 October 2010Presented By:Kaybee MotlhoioaExecutive Manager : Corporate Services
2 South Africa at a glance 1Key Economic Sectors:Mining services, Transport, Energy, Manufacturing, Tourism and AgriculturePopulation49,32 million (mid-year estimates for 2009 – Statistics South Africa)GovernmentConstitutional Multipartythree-tier (local, Provincial and Nationa) democracy11 Official Languages
3 SMME Performance 2 Growth Trends SA Economic Growth 5,4% in 2006, 5,1% in 2007 and 3,1% in 2008in 2007 there were 27% more formally registered enterprises in the Stats SA Integrated Business register than in 2004.Almost new entrants annually40 % GDP ContributionMain contributing SectorsConstruction - Services- Transport, telecommunications and financial servicesSpread of SMME representation in above sectorsConstruction and services and retail account for 90 % ( by number) of informal sectorFormal small business concentrated in business services ( 44%) trade (23%),manufacturing 12 %Sector growth highly depends on domestic expenditureConstrained participation in the manufacturing sectorMarket 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 marketLow profit marginsDifficulty competing in SADC exportLack of collateralHigh local company taxRelatively high velocity of stock turnaroundInsufficient collaboration with small business in terms of purchases of raw materialsLimited involvement of informal SMMEs in Contracts/subcontractsSkills shortagesLow 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 Overview4How Can Governments at all levels support the Development of EntrepreneurshipPolicy (Enabling Environment)Delivery Vehicles (Agencies & Institutions for development & Support)The Fiscus Funding for deliveryEntrepreneurship PromotionGrant FundingIncentivesSoft LoansBusiness LinkagesPayment AssistanceProcurement OpportunitiesPublic Private PartnershipsVertical & Horizontal Integration and coordination across all levels of GovernmentEffective monitoring, evaluation & reportingLong term impact evaluation
7 Policy Framework Objective 5ObjectiveTo create an enabling environment for the promotion and development of entrepreneurshipEnabling Acts and Strategy for small businessNational Small Enterprise Act 102 of 1996Amended byNational Small Business Amendment Act 29 of 2004Public Finance Management Act 1999 Act 1 of 1999StrategyNational 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 entrepreneurship6Strategic ActionsStrategic Pillar 1:Strategic Pillar 2:Strategic Pillar 3:Creating demand for small enterprise products and servicesIncrease supplyfor financial andnon-financial support servicesReduce small enterprise regulatory constraintsAs 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 Council 7Advocate for the small business community and advise thegovernment on relevant issues;Monitor the impact of small business in the economy;Monitor the impact and effectiveness of existing initiatives andprogrammes for small business development;Participate in the assessment of impact and effectiveness ofexisting and proposed legislation on small business;Strengthen Liaison with the small business community to identifytheir constrains and concerns;Make proposals to government through the Minister and other structures of governmentbased on the Council’s assessment of all above;In partnership with the dti, commission annual review on smallbusiness in South Africa. ,
10 Institutional Mandate Non-Financial Support Services 8Effective implementation of the national policy;Design and implementation of the standard national delivery framework;Integration of all government-funded small enterprise support agencies acrossall spheres of government;Design and implementation of support programmes;Establishment of provincial structures for network expansion and management; andGenerally strengthen the capacity of service providers to support small enterprises andsmall enterprise capacity to compete successfully domestically and internationally.
11 Institutions for Financial and Non Financial support 9Small Enterprise Development Agency (Seda )Company and Intellectual Property Registration Office (CIPRO)South African Micro-finance Apex Fund (SAMAF)Khula Enterprise LimitedNational Empowerment Fund (NEF)Industrial Development Corporation (IDC)Other Provincial Agencies
12 Who is seda?10Small 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 Mandate11Implement 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 MISSION12to develop, support and promote small enterprises to ensure their growth and sustainabilityin coordination and partnership with other role-players
15 Strategic Objectives2008/9 – 2010/1113Enhance competitiveness and capabilities of small enterprises through co-ordinated programmes and projects.Ensure equitable access for small enterprises to business support through partnershipsStrengthen the organization to deliver on its mandate
17 Delivery Model 30 Centres 9 Offices 50 Enterprise Information Centres 15EICSEDABRANCHEICEICEICSEDANATIONAL OFFICESITUATED INPRETORIAEICEICSEDABRANCHTECHNOLOGY INCUBATORSPROVINCIAL SEDA OFFICEEICEICEIC30 CentresEIC9 OfficesSEDABRANCHEICEIC50 Enterprise Information Centres41 Branches
18 Seda’s Key Products & Services based on size and need 16BusinessInformationBusiness StartBusiness GrowBusiness BuildBUSUNESS DEVELOPMENT SUPPOR DRIVERSDiagnostic toolsDiagnostic toolsDiagnostic toolsDiagnostic toolsPool of external experts to increase internal capacityTraining andtechnical supportBusinessplanningTender adviceGeneric and customised programmesBusinessinformation andguidelinesregistrationMentorship andincubationFranchisingBusiness startcounsellingSector specific databasesEnterprisesServices providersCooperativesmanagementtrainingExportreadinessAccess tofinance referralsMentorship andincubationShared service administration processes for the networkBusiness startadviceTender adviceBusinessmanagementsupportClient registration and tracking systemFranchisingBusinesscounsellingExport readinessEstablished network infrastructureSubsidisedexpert servicesSubsidised expertServicesSubsidisedexpert servicesPRE-START UPSTART UPGROWTHMATURITY
19 Seda Technology Programme 17sTP is made up of the following:-Incubation divisionTechnology Demonstration Centres focuses on demonstrating, exhibiting and providing training in the use of available technologies with respect to value addition processesTechnology Incubators provide a sheltered and protected environment within which to support and nurture technology-based startups and enterprises requiring “rehabilitation/resuscitation”Technology Transfer divisionThe 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 assistanceTechnology for women divisionThis division provides technology transfer services to women owned enterprises (No funds are available for this division in 2009/10)Quality divisionThis 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 HotlineSeda was tasked with the implementation of this mandateProcurementTo 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 Integration 19Design 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 governmentSection 10 of Act 29 of 2004NATIONAL GOVERNMENTPROVINCIAL GOVERNMENTLOCAL GOVERNMENTSeda integrating/coordinating activities of all support agencies at all levels of Government as well as collaboration with the private sectorPublic SectorSupport AgenciesParastatalsPrivate SectorChambersBanks
22 Effective Monitoring & Evaluation 20The 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 Evaluation 21The 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.