SA government-backed incubators emerge from private sector partnership

What a positive way to start the week. South Africa’s Department of Trade and Industry (DTI) has awarded the first two incubators in its incubation support programme to The Micro Enterprise Development Organisation (MEDO). MEDO supports entrepreneurial activity by boosting trade between large organisations and SMEs or startups, and through its UK Trade & Investment programme.

The first two incubators will focus on the ICT and the Mining and Heavy Industries sectors, providing training and support to businesses that can service and supply these industries. South Africa’s mining industry is under increasing pressure, and the focus on mining innovation is a positive signal.

In an effort to develop sustainable entrepreneurial businesses in South Africa, in late 2012 the DTI launched the ISP (Incubator Support Programme), encouraging private sector partnerships with government to support incubators to develop micro and small businesses. At the time of the launch, Trade and Industry Minister, Mr Rob Davies said that it is one of the best platforms that a country can use to promote broader economic participation, uplift the country’s entrepreneurial base and encourage startup activities.

MEDO’s CEO Judi Sandrock says that the organisation intends to apply for more incubation support from the government:

“We really want to accelerate micro and small business growth which I believe is absolutely essential to economic growth and job creation in this country. 80% of the Japanese economy was established on small start-ups – mom and pop shops – and with commitment and effort it could be the same for us here.”

The ISP aims to see businesses nurtured into sustainable enterprises that are graduated into the mainstream economy where they can provide employment and contribute to economic development.

Davies said at the launch that the programme is envisaged to bring enterprises from a survivalist stage and informal economy into being the main players in the mainstream economy.

Talking to Ventureburn, Malik Fal, Omidyar Africa’s managing director, said that government and the private sector, as mentioned in its Accelerating Entrepreneurship in Africa report, have a lot to do to address Africa’s entrepreneurial challenges. Fal highlighted that the public structure in South Africa is not as interested or engaged as it should be.

This government-private sector collaboration is a step in the right direction towards implementing solutions that require cooperation with the private sector. There has been calls for an initiative that can unify the various entrepreneurial agencies in the country. The ISP may just be that initiative.