Digital offers strong opportunity for SMMEs

MAY 3, 2016

South Africa’s National Development Plan (NDP) has indicated that around 90% of employment opportunities in the country will be created by SMMEs by the year 2030. While the public and private sector have numerous programmes and incentive schemes in place to assist and mentor entrepreneurs and SMMEs, there remains a long road to travel for each SMME before they are able to become a sustainable entity.

“In South Africa, SMMEs currently comprise 91% of formal business entities and, according to StatsSA, they contribute between 52-57% of the country’s GDP,” says Puseletso Nkopane, Events Manager of the SMME Opportunity Roadshow.

The Roadshow is supported by the Department of Small Business Development, which was created by President Jacob Zuma to offer support to small businesses. Events such as the SMME Opportunity Roadshow offer smaller businesses invaluable networking opportunities and the chance to learn from experienced mentors and speakers.

“The current opportunities that are available for SMMEs in Africa are areas such as the Digital Economy, where businesses are offering products and services using technology and ICT,” says Alesimo Mwanga of SEA Africa.

“If I was an SMME now I would look into starting a business online, as it’s easier to expand your market access, while operating costs are reduced drastically,” adds Mwanga.

SMMEs should focus on industries that will drive growth and employment in the country - there is no value in starting a business in a sector with low growth prospects,” says writer and businesswoman Zipho Sikhakhane.

“Disruptive technologies designed especially for developing markets also present an exciting opportunity to eradicate poverty at a low cost,” says Sikhakhane.

Despite the potential that exists for digital startups, traditional opportunities will always offer small businesses the opportunity to build a sustainable business.

“People will always need to have their basic needs met, regardless of the economic conditions, so any venture that focuses on supplying water and food could prove sustainable,” says Sikhakhane.

Ndzavi Derrick, an Entrepreneurologist and Social Media Strategist, agrees that the food industry is the way to go. “People eat, even during a recession. I also strongly believe that the retail sector still has a gap for entrepreneurs to fill by developing products that can be sold through retail chains. Recently I met a lady who used a simple formula to develop a product to solve a skin condition that will take the industry by storm. The world is full of possibilities nowadays,” says Derrick.

The state of the economy has certainly created an environment that is increasingly challenging for SMMEs, but there remains plenty of support through workshops, roadshows and more formalised structures.

“The benefit of the current economic environment is that there are even more public and private sector programmes and incentives being introduced to support SMMEs, because SMMEs have an increasingly important role to play in reigniting growth and employment in South Africa,” says Sikhakhane.

“SMMEs currently provide 61% of employment opportunities in South Africa and, as big companies shed jobs, it is up to SMMEs to safeguard the economy,” adds Nkopane.

 * Mwanga, Sikhakhane and Derrick will be speaking at the SMME Opportunity Roadshow at Emperors Palace on 24 May 2016.