By: Tebogo Mokwena
Business incubators and innovation hubs agree that SMMEs are in dire need of programmes that give them early-stage access to mentorship, investors and other support such as learning digital skills, to avoid them from failing. South Africa has one of the highest failure rates for SMMEs in the world, with between 70% and 80% failing within the first five years. According to Lucky Litelu, the CEO of ICRD Group and founder of the Startup Business Campus in Johannesburg, incubation is critical for small and medium businesses.
He said the essence of incubation was for entrepreneurs to grow their businesses, and to do so they needed to know how to get funding and acquire mentoring and training. Litelu also believes that innovation hubs are extremely instrumental because of the community aspect they bring, which includes networking. “When we look at innovation hubs we see individuals, creators, innovators and researchers coming into a physical space to nurture and grow simple ideas into commercialised products,” he told Vutivi News.
Karabo Mohole, who is the chief storyteller and operations officer of Fintech Startup Accelerator, said that a large number of small businesses failed, and incubating SMMEs would see new businesses succeed and have longevity. While Lesedi Seoke, who is the technical assistant at the Mafikeng Digital Innovation Hub, said that incubation provided SMMEs with exposure, office space, networking and idea development. According to them, the SMMEs that they were assisting did not have adequate resources and skills to upscale their business. Investment and funding were also a concern.
Litelu said that the Startup Business Campus had programmes designed to assist entrepreneurs in creating strong business models and perfecting their pitching in front of renowned investors. It has incubated and accelerated over 800 start-ups and connected entrepreneurs from over 16 countries in Africa. The Fintech Startup Accelerator programme has helped entrepreneurs receive initial capacity building, strategic direction and seed capital to reach traction, Mohole said. And the Mafikeng Digital Innovation Hub has partnered with institutes and corporations like the Small Enterprise Development Agency, Huawei, the Council for Scientific and Industrial Research, and the Department of Science and Innovation on programmes that incubated both existing and new technopreneurs.
Morekolodi Mankuroane, whose business Mansalema Enterprises is being incubated at the Mafikeng Digital Innovation Hub, told Vutivi News that the hub had helped him with an app that will be used in the fight against gender-based violence. Mankuroane, who is a GBV activist, is building a panic button app which will be used to alert the authorities. He recommended that entrepreneurs consider looking at new technologies and how to use them for their businesses. And to do so, they should consider going to incubators and innovation hubs.