Iinnovation and technology unit

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Overview: Business Incubation Policy
Taki Ramuthaga: Innovation and Technology Unit
Special Economic Zones and Economic Transformation Division

2. MZANTSI IS LAGGING BEHIND….
• The business incubation concept has been in existence since
1959………..
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3. ADVENT OF SA INCUBATORS
• Godisa Trust established in 1999
• Aim to create technology-intensive SMEs
• Contribution of R35 million from European Union
(1999/2000 – 2001/2002)
• DST and DTI contributed R24 million each for 3 years
• In 2005, Godisa Trust merged with the National
Technology Transfer Centre and the Technology Advisory
Centre to create seda Technology Programme (stp)
• 105 Incubators in SA as at 30 September 2014
• 76% fully or partly funded by government
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4. GEOGRAPHICAL SPREAD OF
INCUBATORS
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5. TERMINOLOGY
• Business Incubation refers to the process of
support necessary to provide a nurturing, instructive
and supportive environment for entrepreneurs during
the critical stages of starting up a new business
• A business incubator is a physical and/or virtual
facility designed to accelerate the successful
development of entrepreneurs through an array of
business support resources or services
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6. INCUBATION BENEFITS
STAKEHOLDERS BENEFITS
SMMEs • Enhances chances of success
• Raises credibility
• Helps improve skills
• Facilitates access to mentors, information and seed
capital
Government • Helps overcome market failures
• Promotes regional development
• Generates jobs, income and taxes
Universities and
Research Institutes
• Promotes research commercialisation
• Gives opportunity to researchers & students to better
utilise their capabilities
• Transform graduates into job creators
Corporates • Develop opportunities for acquiring innovations;
venture into new products and markets
• Meet social responsibilities
Local Community • Create self esteem and an entrepreneurial culture
together with local incomes as most graduating
businesses stay within the area
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7. 7
EVOLUTION OF SA INCUBATION
POLICY
Technology Wave
(1999 – 2004)
Transformation Wave
(2005 – 2012)
Supplier Devt Wave
(2012 to date)
i) Creation of new high-
tech SMEs
ii) Promote technological
entrepreneurship
iii) Promote technology
transfer and research
commercialisation
iv) Overcome innovation
market failures
v) Dependent on
government for support
i) Promote economic
diversification and
transformation
ii) Encourage job creation
and sustainable
employment
iii) Increase the
competitiveness of
SMEs
iv) Promote technology
diffusion, adoption and
adaptation
v) Emergence of private-
owned incubators
i) Market-driven with
access to supply value
chains of big
corporates
ii) Cost-sharing between
private sector and
government
iii) Commercially viable
products/services
iv) Creating an incubation
ecosystem

8. WHY THIS SHIFT…
• High unemployment rate
• Boost support to SMEs since they generate bulk of
employment
• The structure of the economy has remained relatively
unchanged
• Target specific groups such as unemployed youth,
women, minorities, rural communities, etc
• Incubation is very complex and expensive
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9. SWOT FOR
CORPORATE INCUBATOR
Strengths Weaknesses
• Encourage entrepreneurship
among employees
• Attract external innovators
• New ideas enhance
competitiveness of the corporate
• Hatch new businesses and
create new markets
• Opportunity for networking at all
levels of the corporate
(customers, suppliers,
employees)
• Improve quality and standards of
suppliers
• Easy access to corporate
resources
• Corporate managers meddling in
incubator matters
• Culture and fear may stifle
creativity
• Incubator as a step-child of the
company
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11. THANK YOU
For more info, please contact
Ms Takalani Ramuthaga - 012 394 5301
TRamuthaga@thedti.gov.za
Mr Patrick Mtsweni – 012 394 1279
DPMtsweni@thedti.gov.za
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