Business Incubation in South Africa

EDHE Lekgotla 2019

Ms Mandisa TshikwatambaCEO: Seda

Seda ©1

The Evolution of Incubation in SA

(VIDEO)

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The 4th to the 5th Evolution – Ecosystem Agenda • Increasingly, there is awareness around the world, especially indeveloping economies, about the need to promote Innovation andEntrepreneurship

• Business incubation as an important tool to unleash humanresourcefulness, enable competitive enterprises and create sustainablejobs.

• In South African; the journey towards the realization of the national

development plan goals presents Innovation and Entrepreneurship as critical

drivers and cornerstones of social and economic development.

• Government’s vision as articulated in the NDP, notable in this regardbeing the 2030 targets• creating 11 million jobs,• creating 1 million learning opportunities through CommunityEducation and Training Centres,

• having 30 000 artisans with trade test certificates qualifying tocontribute to the economy as employees or as employers

• In partnership with the Department of Small Business Development we have

grown the Incubation footprint from 56 in 2016 to 76 at the end of the 2019

FY.

• Giving priority to enterprise development initiatives that contribute to the

development of an ecosystem for business venture initiation using the

incubator model.

• Key considerations in the development of this ecosystem:

• Incubator profile alignment to the growth sectors of the economy.

• Priority sectors identified by the NDP i.e. Manufacturing, service sectors: CT,

Tourism and Agro-processing

• Focus on R&D efforts towards innovative and entrepreneurship ventures that

address the needs of growth accelerator industries

• Bridging innovation to commercialization chasm to ensure that South Africa

derives value from its R&D investment

• Recognition of the incubation ecosystem as part of a process of positioning

knowledge, technology, innovation and entrepreneurship at the heart of the

SA developmental agenda.

• Pull force to the midpoint “missing middle” to the right hand side/Upper end

of the enterprise chasm

The 4th to the 5th Evolution – Ecosystem Agenda

• In 2018 the DSBD transferred the EIP pilot programme to Seda.

• The EIP follows a market-driven approach in identifying incubation

opportunities linked to supplier development.

• Seda is also providing leading platforms for Enterprise Development in

Higher Education Institutions (HEI) with the remodelling of the DSBD’s CFE

programme, the remodelled programme in its 3rd year of deployment is

geared to drive the creation of early stage youth-owned start-up

enterprises at institution and provide a support platform to existing

businesses / co-operatives outside the institution establishment and its

surrounding catchment.

• Seda support 13 Youth CFERI and also support the following centers:

• Durban University of Technology - Invotech and Centre for Social

Entrepreneurship Rapid Youth Incubator

• University of Pretoria - TuksNovation

• Free State University – SAMTI

• Vaal University of Technology – CFERI Upington

• Stellenbosch University (DTI) – LaunchLab

• Tshwane University of Technology – Rail Manufacturing Incubator

The 4th to the 5th Evolution – Ecosystem Agenda

• Development of a National Incubator Policy by the Department of Small

Business Development.

• Developing enterprises in the productive sectors of the South African

economy thereby contributing to the industrialisation vision of

Government for the SA Economy.

• Establishment of social incubators with a strong focus on job creation and

assisting cooperatives and groups of necessity entrepreneurs to start-up

and scale-up.

• Building new Township incubators that will promote locally-relevant

indigenous innovations by SMMEs in order to address questions of township

economic growth.

• The Development of Agri-Hubs/Shared Facilities that will drive agrarian

reform and land value chain development through SMME and Co-operative

Enterprises.

The 4th to the 5th Evolution –Ecosystem Agenda

• The Fourth Industrial Revolution’s new technologies empower business

model level disruptions, create new opportunities making it possible to

reinvent entire industry ecosystems.

• Develop the biggest Tech Hub in Africa, a 1000 seater Incubation hub fully

equipped with test labs, coding and programming academy, co-working and

co-creation spaces. The Silicon Valley Model hub, a first of its kind in Africa

will drive South Africa’s New Digital Economic Vision and is earmarked for

completion in the next 3 years.

• The main hub will be supported by 6 feeder hubs to be located in the

following underserviced Provinces.

• Limpopo

• North West

• Mpumalanga

• Free State

• Northern Cape

• Eastern Cape

The 4th to the 5th Evolution –Ecosystem Agenda

STP Customer Value Proposition

Seda © 9

SEDA NETWORK AND SERVICES – Client Journey

ENTERPRISE

SUPPPORT

NETWORK

80+ Seda

Branches

and Co-

Locations

(EDD)

63+ Seda

Technology

and TVET

Incubators

(STP)

Enterprise Development Services Selection Technology Services Monitoring & EvaluationAssessment

(STP)

1 Month 6 Months – 12 Months 6 Months – 24 Months 6 Months – 36 Months

Incubation for Start-Ups

▪ Assessment, Selection

▪ Training, Systems, Tools

▪ Offices, Workshops

▪ Shared Business Processes

▪ Market & Finance Plans

▪ Mentoring, Tracking

▪ Technical Labs

Assess

Select

High

Potential

SMME

BU

SIN

ESS A

CC

ELER

AT

ION

IN

ITIT

AT

IVES

Impact

Assessment

Reporting

Job Creation

Sales Turnover

Skills Transfer

No. of Enterprises

Tools and Partners

Quality & Standards▪ Quality Systems

▪ Product Testing

▪ Design

Technology Transfer▪ Capital Equipment

▪ Intellectual Property

Innovation Support▪ Knowledge Forums

▪ Pitching Competitions

▪ IP Match-Making

R per Job

R in per R out

Approximate timelines during each stage

EDD: Seda Enterprise Development Division

STP: Seda Technology Programme

Business

Talk

▪ Assess

▪ Advise

▪ Train

▪ Register

Business

Start

▪ Market Plan

▪ Counselling

▪ Finance

▪ Support

Business

Build

▪ Capacitate

▪ Mentor

▪ Procure

▪ Franchising

Graduation

▪ Virtual

Incubation

▪ Support

▪ Monitor

Business

Grow

▪ Growth Support

▪ Export Readiness

▪ Manuf. Support

▪ Supplier Dev.

Post Intervention

Monitoring and Evaluation and Post-Intervention Support

SABS, Universities,

TIA, Science Councils

Technical and Commercial

Service Providers

National and Local

Government Enablers

DSBD, DTI, DST, DHET

Financial

SupportTOOLS: Company Operations, Critical Planning Exercise, Export Readiness,

Business Canvas and GrowthWheel Mentoring, CRM Tracking, FinFind Matching

Survival Rate

Monitor and

improveSMME Pipelines

• ESD Fund / co-invest

• Innovation Fund

• Fund of Funds

• Incubator Venture Grants

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New Incubation Service Offering

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Enterprise Supplier Development (ESD)

High Growth Accelerator Programme

New Training Programmes – Creative Design Thinking & Self Mastering

2019 Key Iinitiatives

❖New service offerings:

• IP licensing and registration

• Product Development.

• Pitching - international APEX competition ( Africa Arena)

• Design thinking workshops

2019 Key Initiatives

❖Increased Collaboration in the ecosystem: • Increase our partnerships with private sector through

incubation, TTF, innovation forums and pitching.

o Innovation summit pitching den

o SABTIA Tech camp

o ECIC TTF

o Gibela new incubator in Nigel

o Roundtables with private sector incubators not supported by Seda:

SA Incubation Mapping

➢Interactive Map that show the

numbers of Publicly supported and

Private Incubators in SA.

➢The map will also show sector and

number of active clients in

incubation or acceleration.

2019 Key Initiatives

❖Professionalization and Standards:

• IGMDP

• South African Incubation accreditation standard

development

• National Incubation Journal

2019 key initiatives

❖Digital economy readiness:

• Establishment of a digital hub in Midrand and

4 feeder hubs in underserviced areas

• I4.0 awareness and tech demonstrations taking

place nationally

• Tool for SMMEs to assess and have a programme

of action

• Influence policy through participation in various

commissions

• Seda representation in the Presidential 4IR commission

• Roundtables

10,760

Client supported

9,841

Jobs Created

R2,197b

Client Turnover

Performance over the past four years

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