SMEs not taking full advantage of tech support programmes

Updated on 21 August 2014

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SMEs not taking full advantage of tech support programmes

Struggling techpreneurs are closing shops despite the government’s non-repayable grants that encourage them to stay in commerce Business incubation is the current buzzword in entrepreneurial spaces everywhere nowadays.

Those with business knowledge and experience want to leave behind a legacy from which emerging entrepreneurs would benefit and take up the baton. The government also realizes that small businesses first have to stabilize and become sustainable before they can start creating jobs.

It is for this reason that for the past eight years, the government has been dolling out “no-strings-attached” incentives to entrepreneurs in one of the fastest-growing industries: technology. Despite that the programme has assisted over 1000 businesses so far, many start-ups still do not survive past the first year or two of operation – the most difficult phase of any small enterprise.

Seda Technology Programme

The Seda Technology Programme (Stp) is a brainchild of the Department of Trade and Industry aimed at supporting SMEs in specific industries, such as in ICT, aluminium, platinum and bio-diesel. The programme is responsible for the provision of both financial and non-financial technology transfer, business incubation and quality support services for small enterprises. It has helped create thousands of jobs and grow the turnover of all the small enterprises it supports to more than R200 million collectively.

It focuses on businesses in the “second economy” – the small enterprises (registered or not registered) that are marginalised concerning access to funds and markets, limited business skills and technological acumen, and also access to appropriate technology.  incubation programmes are important because that’s where you assist people who are in small and medium enterprises to get the skills, to be nursed, and how to manage their businesses.

Who qualifies or doesn’t?

Businesses are incentivized according to how they aim to transfer technology skills and how they transform themselves into sustainable enterprises. Eligible categories for funding range from those that showcase design improvement and optimisation; transferable skills, cost-cutting measures, and other Financial assistance the government offers can go up to R600 000 per project in the form of a non-repayable grant.

One of the programme’s objectives is to provide specific technology support to women-owned enterprises. These are enterprises with more than 50% women ownership. But categories including research and development of technology, franchise agreements, patenting and licensing, marketing and others do not receive funding.

Before she resigned last year, former Seda CEO Hlonela Lupuwana said technology business incubation was “key to the growth” of both businesses and the economy. Last month, Minister of Small Business Lindiwe Zulu said these incubation support programmes are very important “because that’s where you assist people who are in small and medium enterprises to get the skills, to be nursed, and how to manage their businesses”.    

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