South Africa faces a structural unemployment crisis. More than 32% of adults are jobless, with youth unemployment exceeding 60%. In this context, small, micro, and medium enterprises (SMMEs) should be a central part of the solution. They make up 98% of registered businesses and contribute roughly 34% to GDP. Yet most SMMEs do not survive beyond their third year.
Lungi Sangqu | image supplied
The uncomfortable truth is that current support systems are preparing entrepreneurs for an analogue economy that no longer exists. Funding and mentorship alone are insufficient; digital readiness is the missing piece. Without it, entrepreneurs are entering a competitive market with outdated tools.
The fragmentation problem
Government entities such as the Department of Small Business Development, Seda, Sefa, Nyda, and provincial agencies provide training, advisory, and financing. However, these efforts are fragmented and largely analogue in delivery.
Entrepreneurs must navigate multiple agencies, each with different systems and requirements, without a coherent, integrated journey from idea to operational business.
Digital transformation is often treated as optional rather than foundational. Entrepreneurs learn to write business plans on paper, but when it comes to digital operations, from online banking to e-commerce, they are left to figure it out alone.
Challenges are further compounded by limited connectivity, low digital literacy, and restricted access to devices. Even programmes that introduce technology often provide generic lessons, without considering the specific sector or context, whether it’s a spaza shop in Giyani or a software developer in Cape Town.
Competing without digital tools
The outcome is predictable. SMMEs don’t fail for lack of creativity or effort; they fail because they are digitally outmatched.
In a globalised economy, a customer in Soweto can order from Shenzhen as easily as from a local business. Without digital capability, local SMMEs lose market share even in their own communities.
A new vision for SMME support
It doesn’t have to be this way. After leading digital transformation at Unisa, Transnet, the South African Reserve Bank, and across 49 African countries with DHL, I have seen how technology can reshape economic outcomes.
South Africa needs an integrated SMME digital transformation programme, one that embeds digital capability throughout the entire entrepreneurial journey.
This isn’t about adding “digital literacy modules” to existing programmes. Support must be digital from the outset.
The core principle: digital foundation before business building
Just as we wouldn’t teach someone to drive without ensuring they can see, we shouldn’t teach business strategy before establishing digital infrastructure.
