Briefing on the Establishment of the Small Enterprise Development Agency (Seda) Lead by Ms Mpumi Johnson Enterprise and Industry Development, Department.

Briefing on the Establishment of the Small Enterprise Development

Agency (Seda)

Lead by Ms Mpumi Johnson

Enterprise and Industry Development, Department of Trade & Industry

Date: November 2004

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Outline

• Introduction

• Rationale for Establishing Seda

• The dti response to the challenge

• Seda Concept

• Discussion of provincial challenges

• Implementation feedback

• Conclusion

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Range of Strategic Reviews Have Recommended

• Integrate all service delivery through Seda service delivery points

• Integrate Small Enterprise development strategy with DTI and other Government departmental programs

• SMME support programs should be demand driven, with an emphasis on the specific key sectors for economic growth and special programs

• A common delivery footprint should be followed nationally in order address outreach and improved access to development support

• The implementation of the strategy will be done in partnership with provincial, district, and local government

• Small Enterprise development will optimally exploit the opportunities presented through Government procurement, BEE, Sector strategies, government programs and any similar instruments

• Development support support pillars are:– Promotion of Entrepreneurship

– Access to Opportunities

– Build Enterprise Capacity

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The dti response to the challenges

• To foster a culture of entrepreneurship to increase small enterprise contribution

• Increase access of small enterprises to opportunities to improve their sustainability

• Increase the competitiveness of small enterprise through capacitating

Small Enterprise development policy thrust:-

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The dti response to the challenges

• To increase the capacity of government to deliver support services to Small Enterprises in a manner that will improve efficiency and effectiveness of service delivery

• The Small Enterprise Development Agency (Seda) will be established to deliver non-financial development support services

• Ntsika and Namac will merge into Seda

The primary objective for the establishment of the SEDA is

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The dti response to the challenges

• A service delivery network that is visible at local level to address issue of access and outreach

• Access to information and opportunity to promote access to entrepreneurial activities

• Programs that deliver according to the diverse needs of small enterprises to address sector specific and local needs

• To leverage efficiency and effectiveness through a service provider network to support programs and the network

• Partnerships with stakeholders to leverage resources and integrate delivery

• Monitoring and Evaluation of service delivery to assess impact and progress

• An effective and efficient organization to deliver to the challenge

Strategic Pillars of Seda:

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Service Delivery Network

NationalSeda

Seda’s National Footprint

Provincial Small Enterprise Development Agency

Provincial Seda

Provincial Seda

Provincial Seda

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Service Delivery Network

National SEDA Provincial SEDA

Linkage

National SME Strategy Implementation (non-

financial)

Funding arrangementCoordinationCommunicationsCorporate SupportQuality ManagementProduct Development

Center of Excellence to Coordinate and

Supporting implementation of

National Small Business development

support

Provincial SME Strategy Implementation (non-

financial)

Coordinate and Supporting

implementation of Provincial Small

Business development support

Seda’s National vs. Provincial Roles

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Development Support Services

“The first line of contact for SMME

support”

Local Seda services to small enterprises

Referral Support

Access Points

Business Development

Support

Information&

Opportunities

Advice

Expertise

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Development Support Services

Advice

ReferralInfo

Opportunity

SMME

Access Point

Delivered Through In-house Staff

Seda Access Point Services

Referral Support

Access Points

Business Developme

nt

Support

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Development Support Services

Enterprise Capacity Building

Development

Entrepreneurship Development

Business Environment

Support

Technical Support

Tools

SMME

Delivered Through In-house & Service Providers

Business Development Support Services

Referral Support

Access Points

Business Development Support

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Development Support Services

Sector Specialists

Project Specific

Business Environment

Specialist

Local Areas

Specific

SMME

Delivered Through Service Providers

Referral to Expert Support

Referral Support

Access Points

Business Development Support

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Service Delivery Network

Provincial Head office

Local Seda

Local Seda

Local Seda

Local Seda

Seda National

Provincial Seda’s Footprint

Provincial Small Enterprise Development Agency

Provincial Seda

Provincial Seda

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Summary: Seda Concept

ServiceProvider

ServiceProvider

SMME

Operating Environment

National SEDA

Provincial SEDA

RegionalSEDA

Enterprise Support Programs

• Enterprise Capacity Building• Entrepreneurship Promotion• Enterprise Resources

Environment Support Programs

• Business Environment• Service Provider• Network support• M&E Program

Local Seda Service Point

Other support programs• Finance• Other

Institutional Networks

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Seda Concept

Ntsika and Namac Merger

Level Seda Namac Ntsika Negotiated

National Combination of Namac & Ntsika Head office

Head office Head office Head Office

Provincial Combination of Namac + LEDA & Ntsika provincial structure + negotiated

Provincial MAC Provincial fully funded LBSC

Non-fully funded LBSC’s & local provincial structures

Regional and local

Combination of Namac satellite & Ntsika LBSC’s, TAC’s + negotiated

Satellite MACs Fully funded LBSC’s and TAC’s

Non-fully funded LBSC’s & local provincial structures

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Provincial Consultation

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Provincial Consultation Process

Current Situation

Seda Concept

Provincial Strategy

Implementation

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1st Round of Provincial Consultation Feedback

• Each province has a unique implementation approach• There is a proliferation of institutions to address small enterprise

issues• Almost all the provinces have an industrial development agency• All provinces support the Manufacturing Advice Center (MAC)

program• All provinces have implemented the Local Business Service Center (LBSC)

model though modified to suit local needs

• The need to deliver at local level is priority• National is expected to play a leading role in the implementation of

small enterprise support services• Competition between programs e.g. National vs. Provincial vs. Local• Non-financial support should be coupled with financial support• National and Province are jointly funding MAC’s and some LBSC’s

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2nd Round of Provincial Consultation Feedback

Round Process Step

Key Deliverables Progress Feedback

1 Situation analysis

Provincial feedback report First round of consultations completed

1 Seda Concept Stakeholder presentations First round of consultations consulted

2 Provincial Strategy

Provincial Strategy document

Provincial Business plan

Provincial Institutional Merger Plan

Provincial Balance Scorecard

Initial strategy discussion around the provincial current initiatives

Looking at provincial growth and development strategies

Scheduling follow-up sessions to develop the provincial strategy

3 Implementation Monitoring Report

Evaluation Report

Progress feedback

To commence next year

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National Small Enterprise Support Framework

National

Provincial

Local & District

Policy RegulationImplementation

National Small Business Act

National Small Business Strategy

Monitoring & Evaluation

National Bilateral

National MOU’s

Provincial Bilateral

Monitoring & Evaluation

Provincial MOU’s

Provincial Strategy

National Policy

Provincial Policy

Local Policy

LocalStrategy

Local MOU’s

Monitoring & Evaluation

Local Bilateral

Service Delivery Network

Differentiated Support Programs

Sustainable Service Providers

Partnerships with Stakeholders

Targeted SMME Programs

An Environment that assists SMME’s

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Provincial Implementation challenges

Challenge Solutions

Policy, regulation, and implementation role separation

Subject of the HOD’s session

Role clarity between National, Province, and local

Matter will be discussed at the HOD meeting

Concurrent functions between national, province, local

An Memorandum of agreement between national, province, and local

Funding arrangements between government level

Each province is developing a strategy and national will support

Reporting statistics for SMME development

A common monitoring and evaluation framework is envisaged

Managing the resource disparity between provinces

This is a matter for the MINMEC to agree on resources sharing

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Implementation Progress Feedback

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Implementation Principles

• Ensure that the project addresses the rationale for establishment of Seda

• Closer working relationship with provinces in effecting the implementation of Seda

• A phased implementation approach to accommodate provincial and local requirements

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Implementation Priorities

• Ministerial and MECs support for the establishment of Seda

• Mobilize support for Seda at provincial level and economic cluster through consultation

• Working together with provinces in designing and implementing a provincial strategy integrating the Seda approach

• The dti to provide more guidelines for implementation of small enterprise development support

• Implement a phased merger approach i.e. National, Provincial, and local to accommodate the unique requirements of the provinces

• Consider ways of streamlining provincial institutional arrangements to support the Seda approach

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Project Work Streams• Organisational Restructuring and Design

– HR, Organisational Development, (Staffing and Pay structures)– Change Management– Labour Relations

• Financial Analysis, Risk Management and Systems– Historical Financial Analysis– Budgets and Expenditure– Potential Risks

• Legal/Legislative Framework– Cabinet and parliamentary process & State Law advisors– Corporate Governance

• SEDA Institutional Framework– National, Provincial and Local– Provincial Strategies in line with SEDA– Access, outreach and integrated service delivery– Programmes Delivery and Business Processes

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Process for the Creation of SEDA

SEDA Interim

NAMAC Interim

Ntsika Interim

Namac Current

Ntsika Current

SEDA Current

01/09/04 Start Process to Appoint CEO

01/12/04

SEDA HO Launch

31/03/05Dissolved Ntsika & Namac

Provincial merger

Phase 1: Preparation

Phase 2: Migration

Phase 3: Dissolution

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Implementation

Phase 1

Preparatory Work

Phase 2

Merger

Phase 3

Closure

Diagnostics 31/08/04 Migration Plan 31/09/04 Dissolution plan 31/12/2004

Change Management ongoing Change management ongoing Change management ongoing

Legal Entity 31/09/04 National Office Merger 01/12/04 Winding up at national 31/03/05

Business Case 31/08/04 Provincial Merger 31/03/05 Winding up at provincial

31/03/05

Organisation Design

Head Office

31/08/04 Regional Merger & Local

31/03/05-06 Winding up at local 31/03/06

Appoint new CEO 01/12/04 New infrastructure 2005/2006

Provincial SMME directorate consultations

Ongoing

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Stakeholders consulted• Department of Provincial & Local Government• MINMEC• Provincial Directorates• Board of Ntsika• Board of NAMAC• GMs of provincial manufacturing advice centres• A range of SMMEs and service providers in

different provinces

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Thank You