R20m pilot project to grow small business

OCTOBER 27, 2015

Government has introduced a R20 million project to help small, medium and micro-sized enterprises (SMMEs) grow sustainability.

Known as the Enterprise Development Pilot Project, the initiative will give support to the SMME sector over a period of two years until December 2017.

The project -- which is a partnership between the Department of Trade and Industry (the dti), the Department of Small Business Development in collaboration with National Treasury and the Middle Income Grant (MIC) of the African Development Bank -- has been categorised into three sub-projects.

Sub-project one -- which will be led by the Department of Small Business -- includes a feasibility study to revitalise industrial parks as well as integrating local economic development (LED) in Municipal Development Plans. Through this, SMMEs will be supported in order to increase the demand for their goods and services.

Industrial parks are based on the concept of integrating relatively different functions (e.g. production and services) into an industrial area to yield high economic turnover and high employment.

The Department of Small Business Development Acting Director General, Lindokuhle Mkhumane, on Tuesday said these parks hold the potential for job creation and poverty reduction in depressed communities.

He said they also have the potential to contribute towards sustaining industrial growth, accelerating industrial restructuring and raising the level of competiveness of the economy.

However, Mkhumane said the country’s industrial parks are not performing at the scale they are supposed to.

Also under this sub-project, five key activities will be conducted to support LED in six pilot district municipalities and provide development opportunities for SMME growth.

The sub-project will be piloted in six district municipalities that have mining townships such as Sekhukhune, Lejweleputswa, West Rand, Nkangala, Waterberg and Bojanala.

The six district municipalities comprise a total of 31 local municipalities with an estimated population of 6 020 461.

This sub-project will also improve access to technology and skills for SMMEs.

Improving access to technology

Sub-project two entails setting up a Specialised Industrial Facilities (SIFs) within certain municipalities in order to address access to technology constraints faced by SMMEs in improving their productivity and competiveness.

SIFs are small production facilities with equipment and machinery that enable different users in the same sector to produce services and products with ease, thus increasing productivity. 

Under the proposed Enterprise Development Project, SIFs will be piloted in four Technical Vocational Education and Training (TVETs) colleges. This will also improve access to technology and innovation in surrounding communities.

The identified TVETs include Sekhukune, Lovedale, Ekurhuleni West and the Northern Cape Urban TVET colleges. The targeted SMMEs will receive business support.  TVETs can also grow their businesses sustainability through this initiative.

Sub-project three of the Enterprise Development Pilot Project includes a feasibility study that will enable the refurbishment of Industrial Parks that were established in former homelands and townships before 1994.

The project will target a sample of these parks and enable for the development of a focused industrial clustering and planning strategy in line with the industrialisation programme of South Africa. 

Sub-project two and three will be implemented by the dti.

The dti Deputy Director-General of Special Economic Zones & Economic Transformation, Sipho Zikode, said government is excited about the Enterprise Development Pilot Project, which is in line with the National Development Plan (NDP).

The NDP says conducive conditions for SMMEs must be created so that they can be vibrant and thrive.

“There needs to be equal development of SMMEs across the country in order to up the growth rate of the economy to address all the challenges we face as a country,” said Zikode.

But for this to succeed, Zikode said there is a need for equal partnerships at all levels.

Once concluded in December 2017, government will look at the successes of the pilot project which can then be implemented across the country. – SAnews.gov.za