Small business incubation ‘key to growth’

16 March 2012

With small businesses expected to play a major role in job creation in South Africa, the government has recognised the need to help them to become sustainable through business incubation, says Small Enterprise Development Agency (Seda) CEO Hlonela Lupuwana.

Speaking at Seda’s annual Incubation Day at the Durban Exhibition Centre last week, Lupuwana said small business incubation played a crucial role in boosting the country’s economic competitiveness.

Before small enterprises can start creating jobs, they first have to stabilise and become sustainable, Lupuwana said. However, many start-ups do not survive past the most difficult phase of any small enterprise – the first year or two of operation.

Since its inception in 2006, Seda’s Technology Programme has created 31 incubators across the country. It has helped 80% of small enterprises incubated in its centres to survive the first two years of trading – giving them a real chance at being sustainable and to create jobs.

“In the past financial year, the Seda Technology Programme created 5 305 direct, indirect and casual jobs; increased its support to 756 small enterprises; and assisted in increasing the turnover of the small enterprises it supports from R169-million in the previous year to R206-million,” Lupuwana said.

“We are on course to see these figures increasing as more small enterprises go the technology incubation route. This can only bode well for our country’s drive to create employment.”

Technology business incubation involves empowering small enterprises to use technology to improve their competitiveness.

The programme currently funds and works directly with 31 incubators across the country, helping small enterprises in industries ranging from ICT to aluminium, platinum and bio-diesel.

These incubators provide the necessary business infrastructure and strategic guidance, as well as an environment in which information, experiences and ideas can be freely exchanged.

This builds entrepreneurs’ skills and knowledge bases, better preparing them for business in the open market.

The Seda Technology Programme was established in 2006 by the Department of Trade and Industry, through the merger of Godisa Trust and the National Technology Transfer Centre, as part of a bid to consolidate small enterprises support interventions across various government departments and agencies.

Source: BuaNews