Communications and Digital Technologies Department (DCDT) says it has a number of plans in place to bolster tech SMMEs, including new laws.
While South Africa has been recognised on the international stage for some of the best tech start-ups, the consensus is that the government and the private should do more to support these SMMEs. This is in line with a World Economic Forum’s White Paper on Attracting Investment and Accelerating Fourth Industrial Revolution Adoption in Africa released in January.
The document says African governments need more targeted interventions to support innovation. The digital economy is set to create millions of jobs on the continent, and while South Africa has been slow off the starting blocks, the government has recognised that the country needs to be more competitive in this space.
The WEF paper further notes that African businesses need strong and sufficient finance to address the challenges of 4IR. “Digital entrepreneurial ecosystems are fast-changing and need agile policy support,” the report reads. “This will require the establishment of clear institutional leadership backed by better publicised programmes from a central source.”
It also notes that start-ups have been recognised as a vital engine to encourage economic growth and innovation. According to the department’s acting director-general, Nonkqubela Jordan-Dyani, the government has a number of programmes and strategies to support SMMEs. But market access continues to be an inhibitor to the growth and sustainability of tech SMMEs in the country. “However, the DCDT has developed a Digitech Platform with the aim to showcase and expand the market reach of South African Tech SMMEs,” she told Vutivi News.
“Moreover, government through National Treasury is also working towards developing a public procurement legislation that will see tech SMMEs prioritised in the procurement of digital solutions, in line with the country’s localisation strategy.” Jordan-Dyani said that the rolling out of broadband was critical component for technology innovation. The first phase of the country’s broadband policy saw the connection of 970 government sites and preparations for the implementation of phase two was underway.
“The strategy entails driving active participation of SMMEs, particularly in the core business of the entities. Under Phase 2, the intention is to transform the sector by bringing on board the previously marginalised SMMEs,” she said. “The project is estimated to provide employment opportunities of more than 3696 people, made out of skilled professionals and semi-skilled labour force.” On 4IR skills development, the department was working “full force” to implement the priorities of the National Digital Future Skills Strategy following it approval by Cabinet.
“An implementation plan for the strategy has been developed, with certain programmes targeted at building 4IR skills and capabilities, to enable South African tech SMMEs to leverage opportunities associated with the digital economy,” Jordan-Dyani told Vutivi News. And the National Electronic Media Institute of South Africa, which falls under the department’s portfolio, was working with the Small Business Development Department and the Small Enterprise Development Agency to train entrepreneurs, including informal traders, on relevant digital skills.
On WEF’s call for more investment in tech start-ups, Jordan-Dyani said there were various interventions and investments targeted at supporting the development and sustainability of SA tech SMMEs. These included government in collaboration with labour and business establishing the SA SME Fund in 2019. These efforts of more than 50 listed businesses and the Public Investment Corporation (PIC) saw them commit around R1.4 billion to the fund and by 2020 more than R925-million had been committed in the form of growth and venture capital investments to support South African innovators.
For those who want to read the report, it can be found at https://www.weforum.org/whitepapers/regional-action-group-for-africa-attracting-investment-and-accelerating-fourth-industrial-revolution-adoption-in-africa