ICT SMME DEVELOPMENT STRATEGY USAASA ICT SMME REVIEW

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 ICT SMME DEVELOPMENT STRATEGY USAASA ICT SMME REVIEW SYMPOSIUM PRESENTATION CENTURION LAKE HOTEL

ICT SMME DEVELOPMENT STRATEGY USAASA ICT SMME REVIEW SYMPOSIUM PRESENTATION CENTURION LAKE HOTEL 07 DECEMBER 2017 1 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Table of Content v v v v v Introduction Government Process Background Definition of

Table of Content v v v v v Introduction Government Process Background Definition of an ICT SMME Strategy Formulation Process Challenges affecting ICT SMME’S Vision & Strategic Goal Strategy Objectives Strategic Interventions Institutional Framework for ICT SMME development 2 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Government Processes v Draft ICT SMME Strategy submitted to ESEID Cluster for approval to

Government Processes v Draft ICT SMME Strategy submitted to ESEID Cluster for approval to gazette: 01 March 2017 v Draft Strategy submitted to Cabinet for approval to gazette: 29 March 2017 v Draft Strategy presented to Director-General’s Small Business and Cooperatives Development Committee meeting on: 10 March 2017 v Draft Strategy gazetted on 31 March 2017 for public consultations v Bilateral workshop held with DSBD on 08 August 2017 v Presentation to Portfolio Committee: 22 August 2017 v Final Strategy Director-General’s Small Business and Cooperatives Development Committee meeting 15 September 2017. v Final Strategy was presented to Cluster on 11 October 2017, v The Final Strategy was approved by Cabinet on 01 November 2017 3 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Introduction § SMMEs plays a crucial role for employment, wealth creation, development of innovations

Introduction § SMMEs plays a crucial role for employment, wealth creation, development of innovations and contribution to economy. § The NDP envisages that the small business sector will create 90% of the expected 11 million jobs by 2030. § 9 Point Plan priority: to unlock the potential of SMMEs, cooperatives and other rural enterprises, to contribute into the South African Economy. § The MTEF also highlights the important need of developing markets for SMMEs and supporting the roll-out and sustainability of incubators. § National Integrated ICT White Paper Policy 4 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Background Key SMME Indicators 2015 Number of SMMEs 2 251 821 Number of formal

Background Key SMME Indicators 2015 Number of SMMEs 2 251 821 Number of formal SMMEs 667 433 Number of informal SMMEs 1 497 86 SMME owners as a percentage of employment 14% % contribution to GDP 42% % Black owned formal SMMEs 34% SEDA, 2016 5 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Definition of an ICT SMME The National Small Business Act (NSBA) classifies SMMEs into

Definition of an ICT SMME The National Small Business Act (NSBA) classifies SMMEs into 5 categories (survivalist, micro, very small, small and medium) and annual turnover and number of employees. An ICT SMME: SMME that is operating within the ICT sector, either as an ICT service provider, software and content developer or electronics and hardware manufacturer. 6 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategy Formulation Process Strategy informed by: v Robust consultative workshops with ICT SMMEs (All

Strategy Formulation Process Strategy informed by: v Robust consultative workshops with ICT SMMEs (All 9 Provinces) v ICT Industry value chain analysis study – Telecoms and IT This Strategy respond to challenges affecting ICT SMMEs; outlines key interventions to accelerate the development and growth of SMMEs in the ICT sector; and aims to facilitate increase of uptake and usage of ICTs by the general small business sector. 7 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Challenges affecting ICT SMMEs v high levels of concentration in the ICT market; market

Challenges affecting ICT SMMEs v high levels of concentration in the ICT market; market v high cost to communicate; v inhibiting policy and regulatory environment; v limited commercialisation of innovation; v lack of appropriate incentive schemes; v constraints in access to finance; v skewed deployment of infrastructure; infrastructure v market access; v lack of appropriate skills and entrepreneurial capabilities; v no central comprehensive database for ICT SMMEs; and v no coordination and integration mechanism to drive and monitor ICT SMME related programmes and interventions 8 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Vision & Strategic Goal Vison: To create an enabling environment for ICT SMMEs in

Vision & Strategic Goal Vison: To create an enabling environment for ICT SMMEs in South Africa to be innovative, technology driven, sustainable and internationally competitive, contributing to job creation and economic growth by 2020. Strategic Goal: To unlock the business opportunities and create an enabling business and administrative environment for SMMEs in the ICT sector to thrive and advance into successful and sustainable entities. 9 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Objectives v Facilitate the accelerated growth and entry of SMMEs (particularly youth and

Strategic Objectives v Facilitate the accelerated growth and entry of SMMEs (particularly youth and women entrepreneurs) in the ICT sector; v Increase uptake and usage of ICTs by the South African nation as a whole, and especially by SMMEs across all sectors of the economy; v Establish a coordinated and integrated planning mechanism for the development of ICT SMMEs within the broader national framework of SMME development across all economic and social sectors. 10 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Interventions STRATEGIC OBJECTIVE 1: Facilitate the accelerated growth and entry of SMMEs in

Strategic Interventions STRATEGIC OBJECTIVE 1: Facilitate the accelerated growth and entry of SMMEs in the ICT sector Participation of SMMEs in the WOAN Create an enabling environment for ICT SMMEs to enter and participate in the mobile broadband market (through the Wireless Open Access Network). SMMEs can participate as ISPs and MVNOs. - The Department will facilitate the requirements for licensing, accreditation, funding, etc. for SMMEs. - Ease of access to Spectrum by qualifying ICT SMMEs Establishment of ISPs SMMEs as Resellers of upstream services Digital Development Fund Establish 96 Internet Service Providers, prioritising youth/and women owned Internet Service Providers to widen participation of SMMEs in the ISP market. Facilitate the establishment of SMMEs as Resellers of upstream services – some SMMEs will be resellers to ISPs as reselling has very low barriers to entry and enables an SMME to build a customer base and expertise required to become a fully-fledged ISP. Operationalization of the Digital Development Fund as a funding mechanism for ICT SMMEs (Draft Bill Developed) – Extend the scope for both collection and support 11 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Interventions STRATEGIC OBJECTIVE 1: Facilitate the accelerated growth and entry of SMMEs in

Strategic Interventions STRATEGIC OBJECTIVE 1: Facilitate the accelerated growth and entry of SMMEs in the ICT sector Establishment of Cell-phone repair Establish youth/women owned and managed cell-phone repair shops (Incl. provision of internet services; faxing services; retail in shops ICT accessories and air time, etc. )/Forging Partnerships with industry. Manufacturing Establish partnerships with Original Equipment Manufacturers (OEMs) and ICT Operators to identify components and devices that can be produced locally. Set up support structures for local manufacturing of ICT devices and components. Software development Identify opportunities for SMMEs in the gaming industry, cloud computing and software development. Establish support structure for the development of local software. Localisation Facilitate the implementation of the localisation policy of government, particularly the participation of SMMEs. 12 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Interventions STRATEGIC OBJECTIVE 2: Increase uptake and usage of ICTs by the South

Strategic Interventions STRATEGIC OBJECTIVE 2: Increase uptake and usage of ICTs by the South African nation as a whole, and especially by SMMEs across all sectors of the economy Training for SMMEs Facilitate the provision of training in ICT skills including: üICT and e-literacy skills üSoftware and applications development, games, etc. üCellphone repairs üWebsite development and web hosting üBusiness and financial management skills üProject management üTendering processes and etc. e-commerce Use government funding to incentivize the SMMEs to either transform their businesses through e-commerce or start an e-commerce business. Establishment of ICT Hubs in Municipalities Forge partnerships with municipalities and key stakeholders to establish ICT Hubs in townships to support rural entreprises. Cloud computing Facilitate the subsidization or funding of cloud computing solutions for SMMEs through government interventions. 13 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Interventions STRATEGIC OBJECTIVE 3: Establish a coordinated and integrated planning mechanism for the

Strategic Interventions STRATEGIC OBJECTIVE 3: Establish a coordinated and integrated planning mechanism for the development of ICT SMMEs within the broader national framework of SMME development across all economic and social sectors. Procurement Facilitate and monitor the implementation of the minimum setasides of 30% for procurement of services to SMMEs (preferential procurement provision) – DTPS and ICT SOCs Create a central and an integrated national database and a website for ICT SMMEs Operationalization of an ICT SMME Digital Platform Establishment of ICT SMME Incubation Centres Facilitate the roll-out of ICT SMME Incubation Centres in provinces that requires this infrastructure Leverage on existing Incubation Centres initiatives to incorporate ICTs Advance BBBEE empowerment targets Work with the ICT BEE Council to continuously monitor the implementation of the ICT Sector Code for development of ICT SMMEs 14 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Strategic Interventions STRATEGIC OBJECTIVE 3: Establish a coordinated and integrated planning mechanism for the

Strategic Interventions STRATEGIC OBJECTIVE 3: Establish a coordinated and integrated planning mechanism for the development of ICT SMMEs within the broader national framework of SMME development across all economic and social sectors. Create awareness on existing ICT SMME development private and public sector programmes Host an Annual Public-Private Partnership Conference on ICT SMME development: International competitiveness Develop the International competitiveness Strategy for ICT SMME development üTo provide Business linkages and showcasing of available business opportunities by ICT companies (MNOs), OEMs, business development agencies, etc. üInformation sharing üCreate a platform for market access 15 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.

Institutional Framework for SMME Development 16 Building a better life for all through an

Institutional Framework for SMME Development 16 Building a better life for all through an enabling and sustainable world class information and communication technologies environment.