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Industry transformation exploring potential of tech SMMEs

telecomworld 2018 Daily Highlights Day 3

A very diverse panel, spanning Government, major tech players, SMMEs, agencies and chambers of commerce debated key stumbling blocks and evolving opportunities for tech SMMEs in South Africa, moderated by SITA’s Sithembele Senti.

In her opening keynote to a packed room, H. E. Stella Tembisa Ndabeni Abrahams, Vice Minister, Ministry of Telecommunications and Postal Services, South Africa explained how we must realise the crucial role of SMMEs, in the ICT ecosystem, and “what it is that we can do, as governments to make sure  this industry becomes a booming industry.” Outlining some of the key challenges entrepreneurs face; funding and access to markets and opportunities, she explained that the Government knows they face challenge, and has made sure to pass an SMME strategy to meet these challenges. When SMMEs try, big business tries, too. Crucially, innovations must meet the needs of African markets. SMMEs don’t lack capacity, she explained, just resources, and big industry needs to be able to support SMMEs. In skills terms it’s a question of having the right skills, and understanding of what skills are needed- not just those who build tenders, she explained “We are building technopreneurs, not tenderpreneurs.”

Setting the context for discussions, Senti outlined how the public sector ICT environment is structured into two “worlds,” spanning past, present and future. The first is the legacy of current corporations and legal structures, supported by a competent pool of the original equipment, with software manufacturers who are largely multinational/foreign. SMMEs need to be able to gain access into this world. Specific contracts- those under 30m rand- need to be designated for SMMEs, with a share of the above 30m contracts also subcontracted to SMMEs. The second world will be the one that will “take us to the 4thindustrial revolution or digital economy, the world envisioned through Vision 2020.” This will function as a platform where all citizens will be able to participate. An open innovation world. In this world, he noted, there is no tender- a major pain point for SMMEs highlighted at the session and echoed by the audience- it is a level playing field.

Panelists shared insights on areas from skills training, to navigating the world of tender, and encouraging SMME involvement in the digital economy.

For Muzi Makhaye, Chairman, ICT SMME Chamber, accessing the market and changing mindsets are key concerns. Today SMMEs may well have the innovations “but they are not trading them because the market is reserved for certain people.” Navigating through challenging tender processes can also prove difficult, as so many conditions must be met, that many SMMEs find themselves effectively shut out “We need to collapse this tender system” he explained. Here the private sector, big business “is duty bound to support SMMEs, to let them flourish and then procure their services.” We must collapse this silo mentality, he explained.

For Barlow Manilal, CEO, Technology Innovation Agency, there is no doubt about the potential of SMMEs but there are a number of key areas where they need support. Crucial to helping them is creating the right enabling environment- a view echoed by Cisco’s Houvet-, starting in terms of the legislative environment. More liberal policies are needed, as well as understanding the “dna of SMMEs” “Let’s not encumber them, let’s let them be agile,” he said. South African SMMEs tend to still be tentative in putting themselves forward, but they don’t need to be “You don’t need to play second fiddle to anyone in the world.” he told them. Mindsets also need to be adjusted to embrace the concept of failure- at present we still have the mindset that failure is fatal but it isn’t, it’s part of the development process. Funding is also a key concern, and we need to be patient and give SMMEs time to grow. The approach to funding should be “high risk, low return, patient capital”

Being able to rate and categorize SMMEs is vital, and a comprehensive list/database of SMMEs would be a valuable tool, according to Charmaine Houlet, Public Policy Director, Africa, Cisco – a sentiment echoed by Vice Minister Abrahams, as often crucial information on SMMEs is missing or unavailable. As well as knowing what SMEs are operating, it would also help in terms of sharing info with SMEs- those registered are able to get access to crucial info on areas such as routing, tenders or switching  but there are still many who don’t make it into the mainstream and therefore don’t get rated or get to access opportunities. ”We need to look at how do we define and categorise SMMEs and start addressing gaps,” she explained- but we are getting there, she added.

Business must stop paying sentiment and truly believe in SMMEs, explained Seacom Chief Development Officer, Suveer Ramdhani. Echoing a key topic raised by others he noted the importance if education “we need to fix education,” – as so many leave school unprepared. Creativity and innovation must be fostered in education.

Education and training are also key to Lindiwe Mokone, Vice President- Marketing, Screamer Electronic Services, sharing perspective as an SMME- particularly so that equipment repairs can be done in South Africa. As she explained, their contracts with OEMS do not allow them to repair equipment from major equipment manufacturers, this is shipped out. We have the capabilities to train, she explained, so it doesn’t need to be shipped out.

For Microsoft Account Team Lead, Ayanda Ngcebetsha, a key issue is taking successful case studies and take them to the mainstream? To do so, Microsoft has a huge IP core cell programme, to help and support those with IP solutions. Echoing other panelists on the subject of skills in a digital economy he explained that industry 4.0 requires “a new generation of skills.”

For Clive Charlton, Solutions Architect, Amazon Web Services, skill shaping and access to market are core issues for Amazon. It’s not just the initial support that’s vital for SMMEs, he explained, but nurturing them through a 3-5 year process. Access to a market place is critical, and they offer a market place for SMMEs offering SaaS, as well as awareness building through Amazon’s media and social media, providing exposure to startups to potential customers. “We see ourselves as an enabler for SMMEs” he explained.

Questions from the audience on navigating tenders, brain drain, opportunities in the Eastern Cape wrapped up a lively debate session.