South Africa needs to improve commercialisation of innovation in universities to boost the creation of small and medium enterprises. This is one of the key areas identified in SiMODiSA’sresearch on constraints which are hindering the growth of start-up and scale-up businesses in South Africa.
Titled ‘Accelerating the Growth of SMEs in South Africa’, the survey is compiled in partnership with the Impact Trust. It is endorsed by partners that support entrepreneurship, including: First National Bank (FNB), Omidyar Network Africa as well as the South African Venture Capital and Private Equity Association (SAVCA).
Matsi Modise, Managing Director of SiMODiSA says, “The survey is an important intervention because it provides firsthand insights around the main factors which negatively affect entrepreneurs. We believe that the findings provide an outline of building an enabling ecosystem which will not only lead to a flourishing SMEs base but create sustainable jobs.”
Some of the key cross-cutting issues identified in the survey include the following:
Skills Deficit
Entrepreneurs need a myriad of skills and currently there are insufficient numbers of institutions providing the necessary training and practical exposure required to support a thriving high-tech industry.
Funding
South Africa is lagging behind, particularly in the area of early stage angel investors. Significantly, the other underlying factor is that the country’s Venture Capitalist (VC) market is still in its infancy.
Remote location & limited access to markets
South Africa is relatively geographically remote, rendering access to international markets difficult for local entrepreneurs. There is also limited support for entrepreneurs to access markets via partnerships with corporates, mentors and networks providing ‘soft landing’ opportunities.
Government procurement limitations
Entrepreneurs / SMEs should be able to access and bid on government procurement opportunities in a smooth and efficient manner. In the case of the High-Tech Entrepreneurship Model, this would more especially enable the application of tech entrepreneurship to solve service delivery problems.
Limited commercialisation of innovation from Universities
South African universities are patenting many innovations in multiple fields. However, few are successfully commercialised and there are poor linkages and few elective relationships between academia and industry.
Heather Lowe, FNB Head of Enterprise Development says the insights provide a blueprint on the interventions required by entrepreneurs.
“We cannot continue to speak rhetorically about the challenges which have stagnated SME development over the last two decades. Both public and private sectors need to work with entrepreneurs on solutions to address these challenges,” she concluded.
