Briefing on the Establishment of the Small Enterprise Development Agency (Seda) Lead by Ms Hlonela Lupuwana Seda Project Manager & Chief Operating Officer – Enterprise and Industry Development, Department of Trade & Industry Date: 13 October 2004

2 Outline Introduction Rationale for Establishing Seda The dti response to the challenge Seda Concept Implementation Conclusion

3 Rationale For Establishing Seda Environmental FeedbackEvidence Dissatisfied shareholder because of insufficient impact by initiatives Undesired levels of contribution to Economic – 36 % to GDP Social – 55% to Employment Entrepreneur's lives – Previously disadvantaged mostly in micro (61%) (gem report) Poor outreachPrograms are not located throughout the country – some in province and others not SMME’s are unaware of support servicesLack of information to inform SMME's about available services SMME development support services are one shoe fits allNon-segregated service by sector Uncoordinated government services deliveryPresence of Ntsika, Namac, TEO, and other programs that do not talk to each other Poor access to financeAccess through banks and Retail Financial Intermediaries Low involvement of local government structuresSome districts are involved in the process Poor quality of implementation statisticsSome interventions are not covered in the feedback SMME development is not talking to other government strategic initiatives Other government departments run their own programs parallel to the dti

4 Range of Strategic Reviews Have Recommended Integrate all service delivery through Seda service delivery points Integrate Small Enterprise development strategy with DTI and other Government departmental programs SMME support programs should be demand driven, with an emphasis on the specific key sectors for economic growth and special programs A common delivery footprint should be followed nationally in order address outreach and improved access to development support The implementation of the strategy will be done in partnership with provincial, district, and local government Small Enterprise development will optimally exploit the opportunities presented through Government procurement, BEE, Sector strategies, government programs and any similar instruments Development support support pillars are: –Promotion of Entrepreneurship –Access to Opportunities –Build Enterprise Capacity

5 Rationale For Establishing Seda To foster a culture of entrepreneurship to increase small enterprise contribution Increase access of small enterprises to opportunities to improve their sustainability Increase the competitiveness of small enterprise through capacitating Small Enterprise development policy thrust:-

6 DTI response to the challenges To increase the capacity of government to deliver support services to Small Enterprises in a manner that will improve efficiency and effectiveness of service delivery The Small Enterprise Development Agency (Seda) will be established to deliver non-financial development support services Ntsika and Namac will merge into Seda The primary objective for the establishment of the SEDA is

7 The dti response to the challenges A service delivery network that is visible at local level to address issue of access and outreach Access to information and opportunity to promote access to entrepreneurial activities Programs that deliver according to the diverse needs of small enterprises to address sector specific and local needs To leverage efficiency and effectiveness through a service provider network to support programs and the network Partnerships with stakeholders to leverage resources and integrate delivery Monitoring and Evaluation of service delivery to assess impact and progress An effective and efficient organization to deliver to the challenge Strategic Pillars of Seda:

8 Service Delivery Network National Seda Seda’s National Footprint Provincial Small Enterprise Development Agency Provincial Seda

9 Service Delivery Network National SEDAProvincial SEDA Linkage National SME Strategy Implementation (non- financial) Joint Funding Policy Coordination Communications Corporate Support Center of Excellence to Coordinate and Supporting the National Network Provincial SME Strategy Implementation (non- financial) Center of Excellence to Manage Implementation, Coordinate and Supporting the Provincial Network Seda’s National vs. Provincial Roles

10 Development Support Services “The first line of contact for SMME support” Local Seda services to small enterprises Information & Opportunities Advice Expertise

11 Development Support Services Advice Referral Info Opportunity SMME Access Point Delivered Through In-house Staff Seda Access Point Services

12 Development Support Services Enterprise Capacity Building Development Entrepreneurship Development Business Environment Support Technical Support Tools SMME Delivered Through In-house & Service Providers Business Development Support Services

13 Development Support Services Sector Specialists Project Specific Business Environment Specialist Local Areas Specific SMME Delivered Through Service Providers Referral to Expert Support

14 Service Delivery Network Provincial Head office Local Seda Seda National Provincial Seda’s Footprint Provincial Small Enterprise Development Agency Provincial Seda

15 Summary: Seda Concept Service Provider Service Provider SMME Operating Environment National SEDA Provincial SEDA Regional SEDA Enterprise Support Programs Enterprise Capacity Building Entrepreneurship Promotion Enterprise Resources Environment Support Programs Business Environment Service Provider Network support M&E Program Local Seda Service Point Other support programs Finance Other Institutional Networks

16 Seda Concept Ntsika and Namac Merger LevelSedaNamacNtsikaNegotiated National Combination of Namac & Ntsika Head office Head office Head Office Provincial Combination of Namac + LEDA & Ntsika provincial structure + negotiated Provincial MACProvincial fully funded LBSC Non-fully funded LBSC’s & local provincial structures Regional and local Combination of Namac satellite & Ntsika LBSC’s, TAC’s + negotiated Satellite MACsFully funded LBSC’s and TAC’s Non-fully funded LBSC’s & local provincial structures

17 Implementation Progress Feedback

18 Implementation Principles Ensure that the project addresses the rationale for establishment of Seda Closer working relationship with provinces in effecting the implementation of Seda A phased implementation approach to accommodate provincial and local requirements

19 Project Work Streams Organisational Restructuring and Design –HR, Organisational Development, (Staffing and Pay structures) –Change Management –Labour Relations Financial Analysis, Risk Management and Systems –Historical Financial Analysis –Budgets and Expenditure –Potential Risks Legal/Legislative Framework –Cabinet and parliamentary process & State Law advisors –Corporate Governance SEDA Institutional Framework –National, Provincial and Local –Provincial Strategies in line with SEDA –Access, outreach and integrated service delivery –Programmes Delivery and Business Processes

20 Process for the Creation of SEDA SEDA Interim NAMAC Interim Ntsika Interim Namac Current Ntsika Current SEDA Current 01/09/04 Start Process to Appoint CEO 01/12/04 SEDA HO Launch 31/03/05 Dissolved Ntsika & Namac Provincial merger Phase 1: Preparation Phase 2: Migration Phase 3: Dissolution

21 Implementation Phase 1 Preparatory Work Phase 2 Merger Phase 3 Closure Diagnostics31/08/04Migration Plan31/09/04Dissolution plan31/12/2004 Change ManagementongoingChange managementongoingChange managementongoing Legal Entity31/09/04National Office Merger01/12/04Winding up at national31/03/05 Business Case31/08/04Provincial Merger31/03/05Winding up at provincial 31/03/05 Organisation Design Head Office 31/08/04Regional Merger & Local 31/03/05-06Winding up at local31/03/06 Appoint new CEO01/12/04New infrastructure2005/2006 Provincial SMME directorate consultations Ongoing

22 Stakeholders consulted Department of Provincial & Local Government MINMEC Provincial Directorates Board of Ntsika Board of NAMAC GMs of provincial manufacturing advice centres A range of SMMEs and service providers in different provinces

23 Provincial Consultation Feedback Each province has a unique implementation approach There is a proliferation of institutions to address small enterprise issues Almost all the provinces have an industrial development agency All provinces support the Manufacturing Advice Center (MAC) program All provinces have implemented the Local Business Service Center (LBSC) model though modified to suit local needs The need to deliver at local level is priority National is expected to play a leading role in the implementation of small enterprise support services Competition between programs e.g. National vs. Provincial vs. Local Non-financial support should be coupled with financial support National and Province are jointly funding MAC’s and some LBSC’s

24 The dti response to the challenges Ministerial and MECs support for the establishment of Seda Mobilize support for Seda at provincial level and economic cluster through consultation Working together with provinces in designing and implementing a provincial strategy integrating the Seda approach The dti to provide more guidelines for implementation of small enterprise development support Implement a phased merger approach i.e. National, Provincial, and local to accommodate the unique requirements of the provinces Consider ways of streamlining provincial institutional arrangements to support the Seda approach

25 Thank You