Technology, Digital Innovation and Media panel

Talking Points for:

Tando Mkosi, Vodacom Managing Executive International, Human Resources

Technology, Digital Innovation and Media panel hosted by the Global Marketplace Summit

Venue: Sandton Convention Centre, Johannesburg

Date: 20 February 2019

• I wish to take this opportunity to thank you, for the invitation to participate in the panel in the Technology, Digital Innovation and Media panel hosted by the Global Marketplace Summit
• Allow me to start by saying, forget growing the economy if SMMEs are not digitased for the future.
• Ladies and gentlemen, Small, Medium and Micro Enterprises (SMME’s) have a great role to play in South Africa’s economy than ever before, giving much needed relief to our growing economy and providing much needed opportunities for employment.
• In fact, the future of South Africa’s economic success relies to a large extent on the success of new and growing businesses in both the formal and informal sector
• Small, micro and medium-sized enterprises (SMMEs) are the engine of future economic growth.
• The importance of this sector was highlighted by the ministry of small business development, who stated that SMMEs absorb between 70% and 80% of the labour market in South Africa.
• At the same time, SMMEs have limited exposure to export markets, which amplifies their local impact and use of local resources.
• Their lack of foreign exposure also means that there is significant growth opportunities, when exposed to new markets.
• What makes the SMME market unique, is that each business on its own has a small impact in the lives of a limited number of employees and clients, but combined this sector has a significant impact on the economy.
• Unfortunately, the scattered nature of the SMME sector makes unified regulation difficult and, where any legislative of supportive actions have been implemented, these are difficult to track across the thousands of SMMEs in the South African economy.
• What is clear, however, is that SMMEs are nimble and innovative and they are able to respond much quicker to market opportunities.
• This has the knock-on effect that it boosts competitiveness in the economy in general.
• And it leads to a much higher level of innovation in the South African marketplace.
• However, SMMEs face significant challenges:
• Research has shown that SMMEs are hampered by the high levels of regulations, a lack of skills among its employees and access to new markets.
• There is a need to focus even more on small businesses, to ensure they are well-equipped for the digital revolution. We have about 1.2 million SMEs. Sadly, about 70% of SMEs fail within the first two years of operation. This failure is due to issues such as operational administration, finace and accessing customers and wider market reach. The advantage of the digital era is that SMEs can potentially gain access to technology solutions and platforms to help them overcome the challenges that they are faced with.
• Businesses need to embrace digital disruption, and even plan for it. By keeping an eye on the ball and knowing the signs of digital disruption within their industries, SMEs can get ahead of the game and lead within their industries, rather than against it. Not only does this prevent the wave of digital disruption from washing away the business’ success, it can also lead to further growth and new opportunities for the business.
• Digital disruption typically marks changes in consumer needs and therefore working with the tide allows SMEs to fulfil these emerging needs, keeping existing customers happy and opening up opportunities for new customers to find out what they need from the business.
• At Vodacom, we believe that technology can address many of these challenges, provided that companies can offer these technology services in a cost-effective way to SMMEs.
• The 21st century SMMEs are looking for Information and Communication Technology (ICT) solutions that will enable them to effectively juggle various roles they play in their businesses anytime, anywhere, securely and in real-time.
• And technology can make processes more efficient and the provision of services more reliable. It is a vital link in providing access to knowledge and information and bringing previously excluded populations into the formal economy.
• In the first instance, many financial service packages, which are also on offer by Vodacom Business and its partners, can automate many of the administrative activities that are said to hold back SMMEs. These include accounting, payroll, tax and human resource activities.
• Secondly, we believe that technology can play a role in providing the skills required by SMMEs.
• For instance, our recently launched Future Jobs Finder platform not only assess the skills and abilities of young people that use the system, but it matches them with potential job opportunities and provides free, zero-rated online training to bridge any skills gaps they may have, thanks to partnerships with global training providers such as Coursera, Kahn Academy and the Google Digital Garage.
• Vodacom is at the centre and this is why at Vodacom, we take the SA Connect Policy very seriously. In fact, we use the SA Connect Policy as one of our guiding documents.
• Importantly, the SA Connect Policy talks to four pillars:

1. Accessibility,
2. Affordability,
3. Inclusiveness and
4. Transformation

• When Vodacom looks at its strategy of insuring inclusiveness and transformation, we have to address it according to these key pillars set out by the SA Connect Policy.
• The company has taken a decision guided by the Presidency around Radical-Socio Economic Transformation that in all areas of life there has to be transformation in order to include the broader number of society.
• When it comes to the Inclusiveness pillar, we have to make sure that the Fourth Industrial Revolution is being embraced by South African companies and this includes small business. Vodacom wants to make sure that nobody is left behind.
• As a company, Vodacom is transforming into a digital business. We’re also looking at what does the Fourth Industrial Revolution mean for our customers. We looking at what does access to broadband and internet access mean to poor people and how do we make sure that they have sufficient digital literacy so that they are not excluded on basis of digital illiteracy.
• When it come to the Transformation pillar, Vodacom amongst other aspects is looking at how it can best empower SMMEs, particularity, woman and the youth through the use of information and technology.
• As a business, when it comes to transformation, we’re looking at inclusive growth. We don’t just want to grow the business, but we also want to grow with our customers, employees, stakeholders and the communities we operate in.  
• This is why Vodacom, through Vodacom Business, is able to provide SMMEs with exactly that so that they connect, manage, grow and even add value in their day-to-day business operations.
• SMMEs market is one of the major economic growth drivers. The key to our participation in events such as the SMMEs Summit is not to simply introduce new solutions, but to look for innovative ways that add value and can best change the way small businesses are conducted and contribute to the economic growth.
• SMMEs can through partnerships with Vodacom Business leapfrog their global counterparts and deliver high-quality services to their constituents through the use of technology.
• It is for this reason that Vodacom Business uses technology to enable and inspire sustainable growth of our customers.
• We are simply not going to get SMMEs technology advanced in South Africa unless data is more accessible and affordable. We are not going to tackle the issue of job creation unless we empower SMMEs as big business.            
• We also look at how we support the transformation in the ICT sector generally. Vodacom has established The Innovator Trust to help drive SMME development. R750m has been invested in this entity so that proceeds of the investment support SME development. Since inception in 2014, the Innovator Trust has produced 53 small businesses and over 40% of these are women owned.
• Vodacom through the Vodacom Foundation has also established ICT centres across the country, through these ICT Centres unemployed Youth receives ICT training and then they are placed in ICT jobs. Since the inception of this programme, 972 unemployed young people were trained across the country since 2013 and the majority of the youth has received job placement.
• To help advance youth economic empowerment, Vodacom has given a facelift to the Vodacom Change the World by relaunching the programme as an ICT and youth initiative.  
• Through the Change the World programme, the youth are afforded a unique opportunity to do something close to their heart, while imparting their ICT skills to help society. As the impacts of the fourth industrial revolution are going to be felt hardest by the youth and women in particular, we see this as an opportunity to help bridge the digital divide in communities whilst preparing youth for a future in a fast digitising world.  
• We were recently,  reminded by Parliament about working on relationships between small business and us (big business) – the area of concern under consideration is that big business does not support small businesses.
• We were reminded that small businesses operate under a lot of pressure due to a number of factors which include financial exclusion and delayed payment of invoices.
•  In terms of payments for SMME’s, Vodacom has now taken a decision of a turnover period of three working days to pay small business.
• Vodacom is also committed to address all barriers associated with SMMEs. In fact, Vodacom intends to partner and collaborate with SMMEs.
• As a business, we can’t be short-sighted, we can’t live anybody behind.
• It does not matter how good we become as a company, if we don’t take our customers, employees, stakeholders and the communities we operate in with on the journey to transformation.    
• In all our development in terms of accessibility, affordability, inclusiveness and transformation, we have to take our customers into consideration.
• With digital transformation gaining momentum, telecommunications remain the leading sector by investment in Africa, attracting almost one-fifth of FDI projects on the continent, according to Ernst & Young’s 2017 Attractiveness Programme Africa.
• The transition towards digitising transformation has seen a steady growth in reliance on networks and connectivity by SMMEs. Our role has, therefore, been to enable these small businesses to connect to these networks, thereby allowing them to tap into new market opportunities for growth.
• In conclusion, there is currently a lot of buzz around the Fourth Industrial Revolution (ICT4D). As wonderful and exciting as the possibilities are of what technology can facilitate for the advancement of mankind and South Africa specifically, it will all fall short if the access to this revolution, is denied to the majority.

Thank you