During the 2018 Budget Speech, Finance Minister Tito Mboweni stressed the current need for SMEs to build their businesses. Enabling them to do so would effectively aid in the country’s economic growth. According to the World Bank, formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies. These numbers are considerably higher when informal SMEs are included.
Tapping into opportunities for growth will require SMEs to adopt new technologies that can assist them along that process. More so considering the 600 million jobs that will be needed in the next 15 years to absorb the growing global workforce, mainly in Asia and Sub-Saharan Africa, as estimated by the World Bank.
Initiatives such as the recently launched Vodacom Fast Forward series, are set on empowering small business owners to gain the knowledge and capabilities to focus on growth through healthy business operations.
Empowerment programmes such as these are vital for SME long-term growth, considering the relatively young businesses that make up SA’s SME landscape. SME South Africa’s SME Landscape Report states that roughly 60% of small business owners have been operating in the industry for less than three years.
Technology limitations hindering SME growth
As beneficial as technology has been for industries across the world, it remains a prominent barrier for SA SMEs, hindering their growth. This is due to the lack of access to digital training, unreliable internet access and even an inability to maximise the use of e-commerce and cloud services.
Yes, SMEs have an innate ability to adapt to a position to disrupt. Unfortunately, they aren’t afforded the opportunity to gain the knowledge required to tap into that capability. The SME Landscape Report highlights the number of SMEs ready to adapt to the transformed business landscape. Only 32% of SME owners believe that their businesses are prepared for disruption, while 32% feel that their businesses are ready for innovation. And that’s where we, as corporates, should be stepping in. It’s our responsibility to provide SMEs with opportunities to capitalise on technology to better position themselves.
Stimulating SME growth in the Fourth Industrial Revolution
Small business workshops, centered on digital tools training, is priceless for small business owners. They’re currently desperate for advice and reassurance that they’re up to speed with the new ways of finding, selling and serving their customers, and effectively disrupt their respective industries.
Vodacom is committed to unlocking economic opportunities that will drive inclusive economic growth and sustainable employment. This commitment has seen us implement customised mechanisms to support SMEs, which, according to the Global Entrepreneurship Monitor (2018), create more than 50% of employment opportunities in South Africa. We collaborated with the Department of Trade and Industry in operating an incubator programme to create and upskill companies that will manufacture branded merchandise. In a bid to support SMEs in their emerging phase, and mitigate the unnecessarily high small business failure rate. To date, four companies have been created, employing 28 previously unemployed young people in the Ekurhuleni area.
We also launched an online trade portal to all existing suppliers of Vodacom. The portal enables SMEs to market their products and services and provides access to contract opportunities advertised. The registered member is able to list their products and services as well as upload information such as company profile, B-BBEE certificates and other relevant documents. The portal creates an environment that enables SMEs to trade with each other.
Connecting SMEs for a better tomorrow
It goes without saying that the current business landscape is turbulent. It acts as a significant obstacle to small business that have not adapted to operate digitally.
By empowering South Africa’s SME sector, we can circumvent these effects and obstacles. In doing so, we can ensure they gain enough support and funding opportunities to generate enough revenue to help keep afloat in tandem with employing more people. This feat will require an industry-wide effort. Every business, big or small, should be awarded the opportunity to benefit from the digital tools and resources we now have access to as a result of the Fourth Industrial Revolution.
The rise of the digital economy should prompt a country-wide shift in focus. One that prompts South Africa’s business sector to engage in the development of tailored roadmaps that SMEs can adopt to navigate their growth, and in turn, the country’s progressive development.