SECTION of DOCUMENT:
The South African Manufacturing Advisory Centres (MAC) Programmes Activities on Information, Technology and Technology Transfer
The National Small Business Strategy is the national policy in respect of small business support as adapted from the White Paper on a National Strategy for the Development and Promotion of Small Business in South Africa published in March 1995.
Ntsika Enterprise Promotion Agency (Ntsika) was set up through an Act of Parliament to expand, co-ordinate and monitor the provision of training, advice, counselling and any other non-financial services to small, medium and micro-enterprises (SMMEs) in accordance with the National Small Business Support Strategy. In this regard, Ntsika is also responsible for the provision of financial support to service providers that provide services to SMMEs.
Other roles and responsibility of Ntsika, as stated in the Act, are the following:
NTSIKA support to SMMEs
Against this background, Ntsika, in conjunction with various other government and non-government agencies, has made a lot of progress to date.
The flagship of Ntsikas programmes is a national network of service providers in the form of Local Business Service Centres (LBSCs). There is presently a total of 32 accredited LBSCs with many more awaiting accreditation and already receiving support from Ntsika. These service providers offer a wide range of training and counselling support to SMMEs at a local level. Where necessary, LBSCs interact with other Ntsika programmes to optimise service delivery to the SMMEs.
14 Technoproneur Projects are presently operating through Technical Colleges throughout the country. The Technoproneur Programme imparts technical and business skills to emerging SMMEs.
Targeted assistance is given to women, rural and youth entrepreneurs as well as to entrepreneurs with physical disabilities.
Ntsika is also rendering invaluable support to a network of Tender Advice Centres spread throughout the country. This includes support in training, marketing and procurement.
[Page-number of print ed.: 101]
SMMEs and manufacturing
Ntsika, in conjunction with the Council for Scientific and Industrial Research (CSIR) and the National Productivity Institute (NPI) have formed a partnership to pilot two Manufacturing Advisory Centres (MACs), one in the Eastern Cape (PERMAC) and the other in Kwa-Zulu Natal (DUMAC), over a period of 3 years. These regional MAC centres have been established to test the concept of rendering assistance to SMME manufacturers of up to 200 employees so that they can improve their productivity and competitiveness in the marketplace.
Manufacturing in this context is loosely defined as the process through which an established enterprise transforms raw materials into usable value-added products for sale to a wider local and international market
The MAC Programme is co-funded by DANIDA (Denmark) and the South African Government through the partners. The total amount of funding support over three years is R43 million.
The two pilots were launched during the latter half of 1997 and are registered as Section 21 Companies, each with its own Board of Directors. The activities of the pilots are being co-ordinated, monitored and evaluated from a National Programme Coordinating Office (NAMAC) situated in Pretoria. NAMAC is registered as a Trust and is governed by a Board of Trustees made up of partner representatives and regional pilot representation.
It is envisaged that once the MAC concept has been successfully piloted and evaluated over the 3-year period ending June 2000, it will be adapted and replicated in other regions as a national scheme for manufacturing support.
In order for manufacturing SMMEs to improve their business operations, they are given technical support in areas like business management skills, product and process improvement, quality and
[Page-number of print ed.: 102]
design improvement as well as human resource development and training.
International experience has revealed the impact of such programmes at three levels:
There is close collaboration between MACs, LBSCs, Technoproneur and other service providers offering an array of services to manufacturing firms. Firms are also being referred to other government programmes such as the Competitiveness Fund, Sectoral Partnership Fund, the Spatial Development Initiatives and the Export Incentive Schemes of the Department of Trade and Industry. The newly established Directorate for Quality and the Environment is also consulting with Ntsika and plans to test its programmes through the MACs. Meanwhile consultation between the MACs and Khula Finance as well as the Industrial Development Corporation is ongoing. These institutions have been established to provide wholesale finance to South African SMMEs.
Concerted efforts are being made by MACs to identify existing and emerging black-owned manufacturing SMMEs. These are being specifically targeted for priority support by the MACs. Also being targeted are manufacturing enterprises owned and run by women.
To date, more than 300 manufacturing SMMEs have been visited by the pilot MAC practitioners. 118 of these currently have projects running through the MACs with 93 contracts awarded to service providers including 12 working on ISO 9002 certification. A total of 15 inter-firm networks have been established.
[Page-number of print ed.: 103]
A special Small Enterprise Development Fund (SEDF) has been set up to subsidise the payment for services by service providers where costs for such are beyond the means of an emerging black-owned manufacturing SMME.
During the brief period of pilot implementation, several key factors have aided in the optimum delivery of services to SMMEs by the MACs. Briefly, these are the following:
Within the time-frame of its existence as a support agency for the Department of Trade and Industry and within its mandate of rendering a support service for the development of the SMME sector, Ntsika has accumulated a lot of know-how and expertise. Ntsikas strength lies predominantly in the areas of SMME policy and research, consultation
[Page-number of print ed.: 104]
across the broad economic, social and political spectrum, project formulation, institutional set-up, capacity building, human resource development and training, management information systems, financial administration, management and support, information acquisition and dissemination, workshopping and exhibiting, marketing, exposure to international best practice, etc.
With ongoing support from organs of Government, key local interest groups and the broader business community, Ntsika will undoubtedly continue to be a leading body in the provision of world-class support services to SMMEs.
In the specific area of support to manufacturing SMMEs, Ntsikas current collaborative approach to the development of the sector is breaking new ground and highlights the importance of linking programmes and institutions through, among other mechanisms, stakeholder buy-in, partnerships and agreements of cooperation. The agency will soon be in a position to roll out these manufacturing support services using this unique system to all the other key manufacturing regions of the country.
1. Contributions to the advancement of science/ technological innovation/new knowledge generated
The MAC Programme has been designed on international good practice for such a manufacturing extension programme. Experience has been integrated from Denmark, United States of America and Canada. Policy, management and operational staff have been trained by international courses and have had good exposure in order to adapt the international best practice for the needs of the South African environment. Through this process, international firm assessment tools and other industrial development methods have been in-sourced. Linkages and agreements have been struck with international partners, i.e. some of these are RTOs, for example the CSIR/NIST (USA) agreement on this programme to share learning and experience
[Page-number of print ed.: 105]
with the aim of developing long-term business linkages for SMEs in partnering countries.
Through this programme, it is envisaged that SME manufacturers who are clients of the MACs, will increase their rates of technology absorption and enter into cycles of business improvements, new product development and innovation to become more competitive.
2. Practical application/implementation
As already noted, the MAC programme is a national partnership investment by DTI (through Ntsika), the CSIR and the NPI. The programme falls within the ambit of the Danish/South African Development Cooperation Programme and is matched with Danish funding. It is a R 43 million investment over a three-year pilot. As this is a new programme, it is emphasised that this is a pilot programme aimed at testing the impact of two regional centres (located in Port Elizabeth: PERMAC and in Durban: DUMAC). The results of the pilot centres will be monitored and evaluated in order to look at replication into other major manufacturing parts of the country. The programme is coordinated by the National MAC Programme Office (NAMAC) which is charged with financial management, monitoring and evaluation, international and national linkages, policy and programme design, and programme extension. The two pilot centres are set up as Section 21 companies comprising of boards which are made up of national partners representatives, and of other provincial stakeholders (provincial and local government, tertiary education, small business organisations, labour, chambers of commerce, etc.). The programme implementation happens at provincial level with the support of all the partners mentioned above.
The industrial advisors are charged with the role of performing assessments and diagnosis of target SMME needs and areas for improvement. The MAC plays an important role as a broker and a matchmaker where clients are linked up with service providers as per the needs of their business assessments (national/provincial). Each
[Page-number of print ed.: 106]
centre also has an international expatriate brought in from Denmark through the Danish funding. These international representatives play the role of mentoring local staff and also adapting their industrial assessment tools and methods for the SA environment.
In order to kickstart the value of MAC services and also to make them affordable to clients, the MAC Programme has set up a Service Provision Fund and a Development Fund to help disadvantaged SMEs access their services. In addition, the MAC Programme has been successful in receiving funding from the DTI incentive schemes (the Sector Partnership Fund in particular) to help SME manufacturers with funding. In the provinces, the MAC programme is well linked to other SMME support programmes (LBSCs, etc.) and also to other industrial development initiatives (such as SDIs, IDZs, etc.). This allows the MAC Programme to cover a wide range of clients and service providers.
The MACs are also linked to selected international manufacturing databases for benchmarking and for linkages.
3. Relevance to South Africa and its people/social and environmental impact
This programme addresses one of the major areas of the SA Government's Growth, Employment and Redistribution Strategy, i.e. that of promoting the development of the small, medium and micro enterprise (SMME) sector. Technological services were previously not made available to the target groups (especially the previously disadvantaged) and also, most of the SETIs have been located nationally, and as a result, not accessible to SMMEs in other locations. By specifically servicing the SME manufacturing base, the MAC Programme will impact on the national manufacturing sectors competitive stance. This will be done through a focus on value addition activity and also on levelling the playing fields between small and big business with a view to striking relationships between these
[Page-number of print ed.: 107]
two segments (e.g. supplier-chain linkages, outsourcing and subcontracting, multiplier effect, etc.).
Through this programme, the capacity and capability of SME manufacturers will be strengthened to help them improve their business operations. As has been noted already, there is a focus on upgrading of the capability of black-owned and run manufacturing businesses. MACs will also be focusing on aligning SMME manufacturing operations in line with environmental standards, e.g. ISO 14 000. This will be done through business assessments, awareness creation, etc.
4. Commercial impact and contribution to SE&T policy
MAC services are to be seen as a holding hand to help SME manufacturers in any aspects of business improvement, i.e. information, environment and standards, product innovation, productivity issues, marketing and linkages, tender information, human resource development, technical training, access to finance, etc. In the short period of implementation, the MACs have demonstrated how the clients have benefited, e.g. a manufacturer in Port Elisabeth has become accredited as a supplier as a result of quality certification, and a shoe manufacturer is able to export as a result of DUMAC intervention. The MACs are linked to the other industrial development projects in their location, e.g. PERMAC in relation to Coega Industrial Development Zone. Joint projects for the MAC are being planned in these areas, for example in the Eastern Cape there is already interest in setting up satellite offices in Queenstown and Umtata.
The MACs are also playing a role in developing business-business linkages between their clientele and SME manufacturers in other countries, for example, the MACs are one of the main delivery tools in the Ntsika EU business linkage programme, and a business-business links programme is being designed with selected partners in the United States (in Chicago and Arizona), where the MACs are
[Page-number of print ed.: 108]
envisaged to feature as one of the main South African delivery partners.
In terms of SET policy, the MAC programme is a critical component of SA RTO outreach strategy where the services of the national science and technology wholesalers will be retailed through intermediaries like the MAC Programme. Apart from making access to technological services easier for SMEs, this approach also allows science and technology service providers to become more acquainted with the needs of small manufacturers.
5. Promotion of public understanding of science, engineering and technology including education
This programme will increase the promotion of technology and technological services to the SME manufacturers being targeted through the MACs. Apart from creating awareness, the MACs will be playing a critical role in technology transfer and technology absorption through the conduction of firm level assessments, linkages to service providers in terms of needs and monitoring of firm growth areas.
As part of creating capacity for industrial advisory skills in the South African environment, the MACs are playing a crucial role in developing tertiary education capacity through the Cadet Programme. The Cadet Programme is a process where postgraduate students are seconded from universities and technikons to workshadow the MAC industrial advisors and to work and spend time with assigned SMEs. Through this, R&D projects focusing on problem areas, issues for SME manufacturing research are surfaced and designed for student research. The cadets will also get exposed to international training on the MAC programme operational areas through the donor assistance made available to the programme.
[Page-number of print ed.: 109]
6. National and international recognition
The MAC Programme is written in the SMME White Paper a national government initiative to enhance the technological capability of small and medium-seized manufacturing firms. This programme is positioned nodal to a range of other industrial development programmes, for example the DTI incentives schemes where the MACs can provide technical assistance skills to help SMEs put in proposals for targeted schemes, in relation to the SDIs and IDZs where the MACs participate in investment promotion event and are seen in intermediary capacity. The MAC programme is also linked to the tier of SMME support programmes, for example the LBSC clientele will be upgraded to become MAC clientele (e.g. relations with COMSEC and PERMAC in Port Elisabeth). Other DTI programmes (e.g. the technology transfer centre, the business referrals and information network, have referred to the MAC Programme in their business strategy).
The donor community has invested in developing capacity of the staff of this programme. In addition, the Canadian IRAP Programme, the Danish TIC Programme, see the MAC Programme as their node. The MAC centres will be used to facilitate business-business linkages with SME manufacturing clientele, and also to share learning and to look at joint projects which include technology acquisitions, technology transfers, cross licensing, joint ventures and information sharing.
Information technology and information systems
Information technology and information systems
Each of the three MAC units has a full complement of the computer equipment necessary for day to day operations. This includes software facilities for generating databases, e-mail and Internet connections, information processing and similar basic functions.
It is well recognised that SMMEs need a wide variety of information for their day-to-day operations, as well as information for medium and long-term planning. Information of all kinds is needed by plant managers/owners and operators in order to perform adequately, solve
[Page-number of print ed.: 110]
technical problems, take the appropriate market or technology and equipment choice decisions, improve productivity and competitiveness, and to survive in a competing world.
Similarly, potential manufacturers who wish to start a business or factory need information on the feasibility of their projects, the potential market for the products to be manufactured, appropriate and relevant technologies available, as well as a broad range of information related to the availability of human resources and skills. They must also be well versed in the laws and regulations, sources of finance, tax and other incentives, standards, patents, etc.
To enable the MACs to provide an efficient service to SMMEs, it is essential that front-line MAC practitioners have quick and easy access to a wide range of manufacturing and business related information. This is by far the most important aspect of the IT/IS programme component and it is now being established through funding made available by IDRC. The steps envisioned here involve establishing an organisational and computer infrastructure including:
Preliminary discussions have already been held on the above activities and a framework for future activities is already in place. The expected outputs are the following:
The size and scope of this activity is expected to result in an ongoing project that will add tremendous value to the MACs.
© Friedrich Ebert Stiftung | technical support | net edition fes-library | Dezember 1999