Londiwe Buthelezi

The Small Enterprise Development Agency (Seda) would roll out support for 250 small and medium enterprise (SME) incubation schemes over the next five years, creating at least 22 500 new jobs, the agency announced yesterday.

Seda said its pledge to support SME incubators was an effort to increase the “insufficient numbers” of fully fledged small businesses that were able to generate enough revenue to create badly needed jobs.

Lindokuhle Nkomonde, the communications manager at Seda, said it was estimated that 1 500 direct or permanent jobs would be created per 50 incubators and a further 3 000 indirect jobs per 50 incubators.

“On average with the incubation model, with each direct job created, two indirect jobs are created as well,” he said.

Nkomonde said Seda would begin these programmes as soon as budgets were finalised, and certain sectors would be given priority depending on the amounts available.

“After the budget has been confirmed, we will then begin the process of identifying which sectors and how much will be rolled out each year.”

This initiative is the first phase towards a target of 1 000 small business incubators.

Seda said the long-term target was adopted after looking at Brazil, which had 4 000 incubators and was four times the size of South Africa. But the issue of when the target of 1 000 incubators would be reached in South Africa, depended on the performance of the initial incubators to be rolled out in the short term and on the availability of funds.

Nkomonde said Seda and the Department of Trade and Industry (dti) were exploring various ways to resource this.

Trade and Industry Minister Rob Davies said there were significant job creation opportunities through small enterprise development.

He said the dti had set up an advisory group to look at areas where greater impact on the department’s SME support programmes could be achieved.

“This was motivated by a sense that we are not making sufficient headway in realising the potential of enterprise development,” he told the parliament on Tuesday when he announced Seda’s SME incubation plans.

Davies said one of the areas of greater success, proven by international experience, was incubation programmes.

“The problem we face in South Africa is that we have between 30 and 40 recognised incubation projects whereas Brazil has (4 000),” he explained.

As a result, the dti said it would be seeking active partnerships with businesses and was looking at ways to tweak direct SMEs and broad-based BEE programmes to develop necessary synergies.

Deputy Trade and Industry Minister Elizabeth Thabethe said knowing the pivotal role the SME sector could play in job creation, the dti would increase support to SMEs and co-operative businesses.

“There is even a greater role for the co-operatives movement in job creation as these foster a sense of collective social enterprise,” she said.

For these reasons, she said the department’s investment towards SMEs would be evaluated to ensure there was a broad economic concept that encouraged the participation of women, the youth and people with disabilities.