At our recent CEO Engagement, Unlocking SME Growth with Adrian Gore, Discovery CEO and SA SME Fund co-leader, Adrian Gore stated that South Africa’s growth and solution to the unemployment crisis will come from greater entrepreneurial activity. In South Africa, SMEs make up 91% of formalised business, provide 60% of employment of the labour force and account for roughly 34% of GDP. To support start-ups and SMEs, Accelerate Cape Town launched our Mentorship Pilot to utilise the collective expertise of our business professionals as mentors within the innovation ecosystem.
Accelerate Cape Town has two programmes where mentors can add value. Firstly, as part of our Innovation Programme, where we are working with the four universities in the Western Cape to support their spin-out/start-up companies. With our universities accounting for 48.6% of PCT patent activity in South African universities from 2009 – 2015, there is a lot of innovative activity and Stellenbosch University and UCT in particular, have several spin-out companies. Secondly, we have a programme that has yet to be launched, our Enterprise and Supplier Development Programme, which will look at supporting suppliers through mentorship as part of the programme.
The value of mentors to SMEs was highlighted by SME South Africa as 80% of small businesses fail within the first three years and the lack of access to mentorship has been cited as one of the key reasons. A 2013 survey by Enterprise Development and SME support professionals FETOLA, revealed that mentorship is regarded as one of the most effective forms of business support available. The participants surveyed showed short-term growth improvements that ranged from 50% to as high as 200%, and 100% of participants felt that their mentor added value.
Our Mentorship Pilot has gathered the support of close to 60 business professionals and we will partner with established incubators/accelerators, so our business professionals can work with their selected start-ups and scale-ups. These include LaunchLab at Stellenbosch University, MTN Solution Space at UCT GSB and Grindstone Accelerator at Knife Capital, and we will continue working with our universities to determine what additional assistance they require if they do not have an incubator. The aim is to determine the process that business professionals go through when mentoring, as well as what additional support is required to effectively mentor start-ups/SMEs. We will also be working with the Centre for Coaching as UCT GSB to provide a mentorship course for our mentors.
The Mentorship Pilot has attracted some of Cape Town’s business leaders such as Marius Alberts, Regional Leader for Deloitte who said: “This is one of the ways that I can assist in growing the economy in my region and do something that can make a difference”. Vanessa Otto-Mentz, Head of Group Strategy at Santam, also said: ‘It’s important to make a contribution to South Africa and Cape Town’s future by supporting individuals on their growth paths”. It is great to know we have the support of some of our most senior business professionals in the region.
In tough economic times of low GDP growth, Adrian Gore stated that “Corporate South Africa cannot grow jobs as the drive is towards greater efficiency which normally means less hiring and even job losses”. Thus, we need to collectively determine how we support SMEs, whether it is through providing funding through the SA SME Fund, providing access to markets, or supporting and imparting business skills through mentorship.