SME Incubator Scheme Half-baked

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By Desie Heita

Windhoek

A review of the City of Windhoek’s five-year Local Economic Development strategy has unearthed concerns regarding the small and medium enterprises, the very same people the strategy aims at developing.

Of particular concern is the city’s SME Incubation Centre that opened in 2003 with much fanfare and expectation. After almost six years of operation, the SME Incubation Centre has produced zilch graduates.

Adapted from the concept of incubating pre-mature babies in hospitals, the SME Incubation Centre is a mentoring institution where small- and medium-scale entrepreneurs with good business concepts and products can be strengthened until they are fully mature to stand on their own feet.

Ideally, the incubation period is between two and three years.

Instead of churning out savvy businessmen and women, entrepreneurs have left the centre half-developed and disillusioned about the prospects of making it in the business world. Some have gone back to their full-time employment and others have gone back to working from their backyards, or the open space where they started.

The city fathers do acknowledge the problems but caution against calling the concept a failure.

Calicious Tutalife, Analyst: Research and Information Management, at the City of Windhoek, asked for lesser criticism as this was after all a learning curve for the city.

“It will be simplistic to narrow [the explanations] down to one reason as to why no one graduated [from the SME Incubator Centre],” said Zurilea Steenkamp, Analyst: SME Development and Promotion at the City of Windhoek.

In its Economic Development Project Report the city also noted that SMEs “lack market focus and innovation, have inability to maintain a profitable position in the market, are unfamiliar with established market practices, fail to conduct business in a professional manner, and lack financial and managerial expertise in business management”.

Yet, these were the very disciplines the SMEs Incubation Centre should have guided SMEs through an on-going mentoring service and specific targeted training interventions in business management and marketing, technical product development and administration.

The problem came with implementation, which did not go as initially idealised, the City of Windhoek noted when reviewing the Local Economic Development (LED) strategy for 2002/6. For instance, the mentoring process – supposed to be the cornerstone of the SME Incubator Centre – was only implemented six months ago “with much success”.

Steenkamp said the new LED strategy for the period of 2007 to 2011 refines the operational management plan for the SME Incubator Centre.

The other obstacle, perhaps, was the way in which SMEs qualified for admission into the SME Incubator Centre.

The Department of Economic Development and Community Services in the City of Windhoek said the qualifying criteria is “driven entrepreneurs who want to develop”.

Yet, Steenkamp gives educational background and illiteracy as some of the reasons why it took long for the centre to produce graduates.

“It all depends on educational background of SMEs. Some of them were illiterate and the SME Incubator Centre had to first develop their basic skills,” said Steenkamp.

The new five-year strategy addresses all these concerns. Training, mentoring and especially training on information and technology receive emphasis. At the Oshetu Community Market, one of the largest community markets with informal traders, an ICT training centre has been constructed. Oshetu Community Market is popularly known as the Single Quarter Market and is best known for its ‘kapana’. The City of Windhoek took over the ownership of the market from the central government and with the help of the City of Vintaa, Finland, an ICT training facility came into being.

At Soweto Market the City of Windhoek has taken over the ownership of what was once the Joint Consultative Committee (JCC)’s information office. The information centre now stocks valuable information on how to start a business, developing a business plan, and many other resources. Unlike with the JCC, which sold information, the City of Windhoek is offering the resources for free, with the exception of Internet access.

Newly constructed 12 units at SME Incubation Centre are ready for utilisation. The units are in addition to 31 existing units at the centre.

Besides SME development the new five-year strategy also recognises other three focus areas for intervention. These are manufacturing and industrial development; trade, investment promotion and business development; and tourism development.

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