Growing opportunities for SMEs
Four business sectors have seen an increase in opportunities for Small and Medium Enterprises (SMEs) and start-ups and this has had a positive effect on business confidence in 2019.
Business Partners Johannesburg regional general manager Jeremy Lang said the tourism, manufacturing, agriculture, and data and information technology sectors had shown favourable conditions for SME owners to grow their enterprises in the coming year.
But these sectors would not be without challenges, Lang said.
The World Travel and Tourism report 2018 revealed that the direct contribution of the travel and tourism sector to SA’s GDP has been projected to rise from R136bn in 2016 to R197.9bn by 2028. It is set to make up 3.3% of the country’s total GDP.
“Although this sector experienced some setbacks in 2018, such as the drought in the Western Cape and stricter visa regulations for children entering the country, both the water restrictions and visa regulations have been relaxed and the sector is once again poised for growth,” Lang said.
Business Partners Western Cape regional investment manager Arnold February said that one of the biggest benefits of the travel and tourism sector was that it encompassed a wide range of industries.
These ranged from hospitality and cleaning services to retail and repairs, offering a niche for almost any business to fill.
“As such, SMEs around the country should collaborate to form a community and support each other’s business growth, whilst creating unique experiences for visitors,” February said.
Statistics SA credited the manufacturing industry as being the largest driver of growth in the country’s GDP, having expanded by 7.5% in September 2018, according to Lang.
“To bolster this, government has made a concerted effort to stimulate small business growth in this area with initiatives such as the Black Industrialist Programme and the SA Automotive Masterplan.”
He said small businesses in the manufacturing sphere could see significant opportunities in the form of outsourcing contracts and new partnerships with large corporates.
According to Lang, the debate around land expropriation has occupied most of the conversations surrounding the agriculture sector in 2018.
While some questioned the sector’s prospects for growth, Lang said it showed 6.5% growth over the last three months of 2018.
In terms of opportunities for SMEs, he said these were likely to be found in rural and underdeveloped regions.
Here the need for resources such as efficient transport, cold storage, better irrigation and private power generation were essential to making agriculture projects more productive and competitive in the export market.
Connectivity and information technology infrastructure were both key to business and employment growth in SA, Lang said.
“With many municipalities committing to providing all of [their] residents with free data as part of a plan to expand public Wi-Fi network access, it is clear that this is also becoming a high priority on a state level.
“As such, SMEs in the construction, communications and electrical fields are all likely to benefit from supply and subcontracting agreements over the coming years,” he said.
An initiative in Nelson Mandela Bay is VMite – a nonprofit IT training organisation supported by the Datatec Foundation – which provides technology skills training to unemployed youth in the region.
“We offer vendor-accredited programmes that are in demand in the IT industry which helps eradicate youth unemployment, specifically in Uitenhage,” VMite founder Vusi Ncwadi said.
Nelson Mandela Bay Business Chamber CEO Nomkhita Mona said the chamber has prioritised a number of sectors and initiatives that have the potential to grow the metro’s economy by strengthening the local business sector and especially the performance of SMEs.
The automotive sector, she said, was a crucial industry as well, contributing nearly 19% in output to the metro’s economy.
“This industry also offers opportunities for future SME growth and development, as national government’s South African Automotive Masterplan aims to increase local content in vehicles assembled on South African soil to 60% by 2035,” Mona said.
On the other hand, Mona said, SMEs in the construction industry might struggle to find opportunities to enter the market, as they might not be able to participate in high-impact projects if their certification did not comply with the stringent requirements of this sector.
“It is imperative that SMEs are given the necessary support to thrive.
“The business chamber will continue to assist SME development across all sectors, through our SME task team and its initiatives to empower entrepreneurs,” Mona said.
‘As such, SMEs should form a community and support each other’s business growth’ Arnold February
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