Leveraging on the Strength of SMMEs in driving Job Creation: 2018 SMMEs ICT SUMIITS & EXPO. Presented by Xolani Qubeka Chief Executive Officer

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1 Leveraging on the Strength of SMMEs in driving Job Creation: 2018 SMMEs ICT SUMIITS & EXPO Presented by Xolani Qubeka Chief Executive Officer

2 SBDI S DISRUPTIVE POSTURE The SBDI is committed to contribute towards changing the economic architecture of South African economy: Arrest the leakage of township & rural areas revenues to circulate more amongst its communities Including Black communities in CBD s Integrate indigenous financial products such as Stokvels, burial societies though community owned Cooperative banking system Developing new home-grown brands & products Create alternative manufactured goods & retail brands Implementing & monitoring the 30% set-aside procurement in the public sector

3 CONTEXTUAL BACKGROUND TO THE STATE OF SMME S IN SOUTH AFRICA SMMEs in South Africa are synonymous to Black survivalist enterprises SMMEs in South Africa contribute between 52% and 57% to GDP and provide about 61% of the country s employment (STATS SA). 70% of SME s fail in there first year (Department of Trade and Industry, 2014). 7.0% of the adult population in South Africa are engaged in entrepreneurship, while 2.7% already own/manage an established business (GEM South Africa Report, 2014). Businesses in cities are more likely to be profitable (70%) than those located in smaller towns or rural areas (58%). Businesses that fall within the broad SMME category differ vastly from one another in their ambitions, their potential for growth, and their stage of development. (SBP-SME Growth Index, 2014) 3

4 SBDI ALUWANI R500 MIILION SMME FUND TO DEVELOP & SUPPORT SUPPLIERS & CONTRACTORS The Small Business Development Institute (SBDI) to facilitate the establishment of a Supplier Development Fund in partnership with the Aluwani Capital Partners and PIC as well as other financial institutions such as SEFA ITHALA Development to finance the developmental needs of emerging contractors in the private and public sectors. This will include all support instruments such grants, incentives as well as loans. Each Supplier Development Initiative (SDI) is assessed and decided upon by a Project Steering Committee made up of the parties 3-Tier Gov. Depts. DSBD SOCs/ OEMs Loans Grants Incentive Schemes Financial Support Financial Institutions Supplier Development Fund SBDI SEDA SEFA/ PIC ITHALA OTHERS Technical Support Business Mentorship, Hand holding & Technical Assistance Incubators

5 OPPORTUNITIES FOR SMME S PROPELLED BY THE CONVERGENCE OF ICT VOICE IT, CLOUD & Related Services Broadband Internet & Data CONVERGENCE OF ICT PRODUCTS & SERVICES Mobile Voice & Data Data Networks Equipment & Services

6 TARGETED SECTORS: STRATEGIC PILLAR 1 Wholesale & retail: Buying & wholesaling Services: Grocery retail coops & family owned Bakeries Logistics & transport Information & Communications Technologies Bulk Laundry Cleaning & Dry cleaning factory & depots Business services: Printing Faclities MNGMT TOURSIM SIGNAGE Personal Services ( Hairdresser, beautician) Automotive repairs & motor maintenance Recycling & waste management TO FACILITATE THE CREATION, DEVELOPMENT & SCALING UP OF AT LEAST SMALL TO MEDIUM ENTERPRISES BY 2021

7 TARGETTED SECTORS: STRATEGIC PILLAR 2 Manufacturing: Automotive & rail component manufacturing Clothing & textile manufacturing Detergent products Toilet paper & related products Furniture Construction & building implements Agro processing Dairy farming TO FACILITATE THE CREATION, DEVELOPMENT & SCALING UP OF AT LEAST 3000 SMALL TO MEDIUM ENTERPRISES BY 2030

8 ENTREPRENEURSHIP MALLS

9 Common Ground - China 90%

10 Services Centers The service centres as the foundation and core of the Entrepreneurship Malls Business model overview: The target client segment is early stage entrepreneurs, who are defined as the percent of working age population both about to start an entrepreneurial activity, or that have started one from a maximum of 3 years and half. Solutions Statutory & compliance support Accounting, tax and legal services Business planning & development support Skills development training & mentoring Project management and implementation Product and value chain development Market access Funding support Administration staff Technical staff Industry experts Team Clients Service Centers Early stage entrepreneurs Community organisations Access to infrastructure and space Knowledge management Best practice sharing Administrative service management Value Proposition Go-tomarket Awareness campaigns to change narrative from potential employee to potential entrepreneur Community mobilisation and buy in from community partners

11 Incubator Hubs Incubator networks as platform to scaling the SMMEs Business model overview: As SMMEs matures and scales, the organisation will now be able to offer incubation support and infrastructure support Service centre personnel Subject matter experts Coaches and mentors Solutions Incubation support Coaching Infrastructure support Monitoring and evaluation Innovation hub Industry specific coaching Technical infrastructure Serial workshops Research and development offering Access to creative working spaces Team Incubator Hubs Clients Early stage entrepreneurs Techno-preneurs (students, professionals, companies) Serial entrepreneurs Hubs act as brokers to build up a physical environment or a virtual platform to increase potential connections among stakeholders Flexible and comfortable environment, that enables the exchange of knowledge as well as develop people-to-people connection with entreperenuers from different backgrounds. Value Proposition Go-tomarket Targeting individual techno-preneurs (students, professionals, companies and government agencies )

12 Provides SMMEs with scale and footprint Entrepreneurship Malls Business model overview: Self sustaining and cost effective delivery model that leverages on community partnerships and the entrepreneurship ecosystem Solutions Monitoring and evaluation Innovation hubs Creative guidance Space & facility renting for groups Workshop programs Service centre personnel Incubator hub personnel Facilities management Team Entrepreneur Malls Clients Entrepreneurs Ecosystem partners Community partners Value Proposition Go-tomarket Unparalleled access to networks and infrastructure Cost effective infrastructure e.g. use of shipping containers to build structures Leverage use of ecosystem partners (telcos, banks and retailers to make offering more compelling and affordable

13 Common Ground - China 90%

14 D E S I G N

15 E N G I N E E R I N G & L A Y O U T

16 P R O D U C E D P R O D U C T

17 THANK YOU!

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