Shirley le Guern

The big push is on to get small IT firms going in the city, writes

DISRUPTION – that infamous way of thinking that has overturned ageold business empires and ushered in the so-called fourth Industrial Revolution – has arrived in the business incubation space.

The consensus among many who attended last week’s Smartxchange Annual Stakeholder Breakfast was that the time had come for new enterprises and incubators to become disruptors.

In the words of Smartxchange chairperson Precious Lugayeni, the breakfast was a celebration of the sustainable enterprises that have been created through the incubator the ethekwini Municipality set up to support, mentor and coach emerging companies in the information and communications technology (ICT) sector in 2004.

It was also an opportunity to showcase the ecosystem that has been created and which has graduated 75 enterprises.

One, Adapt IT, the brainchild of successful entrepreneur S’bu Shabalala, was born at Smartxchange. The company is listed on the JSE and wears its innovation badge proudly as it serves customers in 40 countries in the manufacturing, education, financial services and energy sectors.

“The incubation programme does work,” said chief executive Jonathan Naidoo, one of the visionary leaders who can be credited for believing in the dreams and schemes of young entrepreneurs to the point where Smartxchange is regarded as something of a leader in business incubation in South Africa.

He wasn’t simply stating the obvious.

The figures he presented could well have been beyond the wildest dreams of those prepared to back small, medium and micro enterprises (SMMES) in the ICT sector when they set up Smartxchange more than a decade ago.

Last year the 66 SMMES operating under the Smartxchange umbrella had a combined turnover of R230 million. The collective turnover since 2004 has topped R1.3 billion.

Last year, Smartxchange’s incubatees produced a profit of R196m and created 337 jobs.

During its lifetime, Smartxchange has created 1 314 permanent and 2 758 casual jobs and awarded 17 innovation grants. A hundred individuals have been upskilled at a cost of more than R35 000 each.

Those grants indicated to Naidoo that there was more to incubation in the ICT space than teaching basic business skills.

Each year, the Technological Innovation Agency (TIA) provides grant funding and support for innovators to progress ideas towards market entry and commercialisation.

Yet, despite criticism that a lack of funding and support for small business leads to an high mortality rate for SMMES, hundreds of innovators aren’t lining up for funding.

Naidoo says he isn’t short