SMMEs and Information Communication Technologies (ICTs)

The South African government has prioritized the development of the Small, Medium and Micro Enterprise (SMME) sector in the country. Globally, entrepreneurship is considered as the engine of economic development. The SMME sector has the potential to address socio-economic challenges facing both developing and developed countries. Without small business development, it is argued that economies stagnates, unemployment levels continue to rise and the general standard of living deteriorates.

Information and communications technology (ICT) has been identified as a major area of need to develop the SMME sector, in areas of information provision, access to national and international markets, and other areas of business development and support.

ICTs enable entrepreneurs to manage their businesses efficiently, and thus enhancing their competitiveness in the global market. They can increase their geographic reach, improve efficiency in procurement and production and improve customer communications and management. For these reasons, the need to encourage and accelerate the uptake and optimal application of ICTs by SMMEs in different sectors of the economy cannot be overemphasized.

The ICT sector has the potential to absorb prospective entrepreneurs, considering various business opportunities offered by the sector. Some of the business opportunities available within the sector relate to systems integration, application development, database administration, web design, and internet service provision. The sector is also seen as an area with major opportunities for the historically disadvantaged sectors of the population. It therefore becomes imperative for government to provide mechanisms to accelerate the entry of SMMEs into the ICT sector.

It is necessary for one to register a business prior to entering and participating within the ICT SMME sector. There are different forms of businesses one can register and they include Close corporation, a partnership business or company. These different forms of business have their advantages and disadvantages. However, a close corporation or CC was created especially to cater for small businesses. This type of business must have a minimum of one owner or a maximum of ten owners. Members of close corporations enjoy limited liability. In addition, registration of this type of business is simple and less expensive as compared to a company. For more information on the registration of businesses click here

The government also prioritized the need to utilize the co-operatives model in order to encourage entry of entrepreneurs in various sectors of the economy, including the ICT sector. ICT Co-operatives, in particular telecommunication co-operatives have been in use in both developing and developed countries. There are other different ICT SMME models within which potential entrepreneurs can choose from and, they include amongst others telecentres and internet cafés.

Thus, the discussion above has shown that the ICT sector offers a number of opportunities for potential entrepreneurs. In addition, the benefits of utilizing ICTs in the day to day running of a business have the potential to give SMMEs some competitive edge against their rivals, particularly large companies.