Government’s Role in supporting Innovation and Entrepreneurship in SA

“Creating ‘cost – effective’ economic value - add in the SA economy!!”

Charles WyethAIN Conference

Maputo, 9 July 2007

There are many different instruments government can use to support

innovation and entrepreneurship in any country…

• Educational Institutions (primary, secondary and tertiary)

• Special Programmes of various government departments and agencies

• Publicly supported Incentive Schemes• Partnership programmes with the private

sector

Why Support Innovation and Entrepreneurship???

• Jobless growth• Shedding of jobs by large companies,

esp. MNCs• New economic impetus in all but a few

countries coming from small enterprises• Innovation - (product and process)

essentially helps you to do more with less• and….

Real wealth in most economies is created primarily through the private

sector and the entrepreneurs who establish, own and/or manage

business enterprises for the personal gain of the shareholders who own

those businesses

(this is the only effective mechanism for continuous and sustained improvements in competitiveness)

The SA Government’s key instruments of supporting Innovation and Entrepreneurship

• Special Programmes of various government departments, esp. the Department of Education

• SEDA (Small Enterprise Development Agency)

Innovation

Entrepreneurship

• Special (Policy) Programmes of the DST and dti• Various “Incentive Schemes”, eg. Innovation

Fund (IF), Sector Partnership for Industrial Innovation (SPII), plus many many others

• Bi-lateral Agreements with other countries, eg. Finland (COFISA)

In addition to the above national government programmes, numerous provincial and local government programmes as well as

private sector initiatives also exist

The seda Technology Programme (stp)

• Enhancing technological and technical innovation • Replacing outdated technology used by many small

enterprises• Facilitating access to technology and technical support

for SMMEs• Addressing the low entry rates of small enterprises into the

productive, value- added sectors of the economy• Facilitating access to facilities for the testing and

promotion of innovative, ‘technological’ ideas

Stp, through its centres, will therefore seek to address the following issues:

• Created as a special programme of the dti to ‘programme manage’ the different business incubators and TBCs supported by national government/the dti

Business Incubation in SA• Incubators have evolved from ESC’s, Hives and

LBSCs• There are about 28 Business Incubators/ TBCs in

SA– Most are publicly supported (Most of these (18) receive their

funding through STP)– This excludes satellite incubators of some of the bigger TBCs– Only one fully privately owned incubator remains– In-company incubation is taking place at selected

companies– There are a number of business hives that still exist from the

SBDC/Business Partners• Maxum at The Innovation Hub, Sedichem and

Bandwidth Barnyard are probably the most successful non-stp funded, public sector supported centres in the country

Definition of “Business Incubation”

A business support process that accelerates the successful

development of start – up and fledgling companies by providing

entrepreneurs with an array of targeted resources and services.

(Source: NBIA, 2007)

Some incubators in China

Shanghai Tech Innovation Support Center

Cao Heijing Incubator in Shanghai

The emphasis is on large buildings that have the potential to generate significant income for centres themselves, whilst at the same time, reflect the

government’s commitment to incubation and innovation support

The Guangzhou International Bus. Inc.

In Brazil the focus is on outreach and intensive use of

space

Changing from Sector-focused to ‘mixed use’

Economic Impact

• 610 Enterprises created (2002-2006)1200 Enterprises Supported

• 4 581 sustainable jobs created - Survival Rate of SMMEs enhanced(83.9% of SMMEs in the programme survived the 2004/5 FY, 80.1% in

2005/6)

Contributing to Economic Development one business at a time…

Contributing to Economic Development……one business at a time…

Alucia Ngobeni

Timbali Client

Contributing to Economic Development……one business at a time…

2 Big Mobile Applications (Pty) Ltd

Modisane Setlodi

Lucky Seuoe

Mokgatle Maesela

Softstart Client

Contributing to Economic Development……one business at a time…Fischer Khambule: SEE South Africa

BTI Client

Contributing to Economic Development……one business at a time…

Keryn Krause: iSlices

eGoli BIO Client

Hans Pieterson: Infantrust

ACORN Technologies Client

Some key Challenges• Benefits of incubation accrue to a

small number of clients• Deep and narrow vs shallow and

deep approach• Technology vs Business Incubation• Lack of skills in the “incubation”

domain• Lack of real support from the TEIs…how to increase impact without decreasing

quality…???

Thank You

Feel free to visit the stp website on www.stp.co.za

Call Jayesh Ravjee at seda Technology at 012 - 4411000