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Entrepreneurs As A Driver For Growth Of Township Economies
Issued by: by Nothile Mpisi, General Manager, eKasiLabs, The Innovation Hub
[25 March 2020]

In a paper presented by Mr. Walter Matli and Prof. Annelie Jordaan from the Department of Trade and Industry at the Economic Research Advisory Network 1st Annual Conference in 2016 entitled ‘Growing Capacities of Sustainable Entrepreneurship in Townships: A Theoretical Perspective, the key findings reveal the need for a continuous process to drive innovative sustainable development in townships. In most instances, novice entrepreneurs’ success relies on the environment and support structures available. Both the public and private sector should remain committed, not only to ensure quality in training programmes and entrepreneurship skills but also to create an enabling environment in the township for people to participate in their economy

In the introduction to the presentation it was stated that part of the current Township Economy Revitalization (TER) campaign involves increasing the participation and success of township entrepreneurs to participate in their township economy. As with most developing countries, South Africa is a country full of possibilities, however, most people are not granted access to these opportunities, particularly the beginners in entrepreneurship. This prevents ordinary people from the township to actively participate and contribute to their own township economy.

The research paper went on to explore how township entrepreneurs can play a participating role in their own economy with data primarily gathered through a literature review survey. The finding included that it is difficult for entrepreneurs in the townships to secure funding because of their low credit worthiness (Makhoba, 2010). Financial institutions find it high risk to finance most entrepreneurs and aspiring entrepreneurs from townships. Subsequently, finding funding to start a small business is often the largest stumbling block. It was also stated that Entrepreneurs in townships face numerous fundamental challenges, including support from the community, access to the right information, and receiving coaching or mentoring from successful entrepreneurs within their communities. Results of this pilot study included that the population in townships is on the rise and people are increasingly stuck in poverty. There is a serious need for government and the private sector to invest in township revitalization and focus on growing the economy in townships.

The Innovation Hub, the innovation agency of the Gauteng Province was established by the Gauteng Provincial Government to promote economic development and competitiveness of Gauteng through fostering innovation and entrepreneurship in 2005. In response to the needs of the residents of our townships, the Premier of Gauteng identified the opportunities that could be created and consequently launched the Gauteng Premier’s Township Economic Revitalization Strategy in 2014.

eKasiLabs, part The Innovation Hub, was first established in 2014 as a pilot project in Garankuwa, Tshwane to see if the community would embrace the concept and to test whether it responded to the needs of the township community. At the time The Innovation Hub was the only government entity that responded to our Premier’s call. <.p>

In order to meet the Gauteng Premier’s call for the economic development of the township economy focused on job creation, it was important that we to took The Innovation Hub to the people, who did not have the means to access these facilities. The concept has proven itself to be a huge success in growing entrepreneurship in the townships and has been embraced by the communities in which we currently operate.

At the time with no other incubators in the townships – eKasiLabs was the only fully-fledged business incubator supporting the development of township entrepreneurs and what started as a pilot project had soon expanded into the other 5 economic development corridors with the development of 1 to 2 township incubation centres per year. Currently eKasiLabs is operational in 10 sites situated across the 5 economic corridors of the Gauteng Province and there are plans to expand in line with Gauteng’s expansion of these corridors. Crucial to the success of the project is local buy in, firstly from local Ward Councilors, followed by community support - and eKasiLabs has that ‘communities embrace what we are offering them!

The Innovation Hub provides full support to the challenges that Entrepreneurs face that includes access to Infrastructure with free access to WIFI, space for meetings and space for development and printing of prototypes – FabLab. There is also access to networks including business and technical advisors to assist entrepreneurs in opening doors to networks. There are groups of entrepreneurs to network and share knowledge as well as providing sounding boards to check that it is a viable solution. Collaboration is encouraged with entrepreneurs able to sell among each other and across their networks. Access to Market is provided by assisting with accessing buyers e.g. Pick ‘n Pay once the product has been piloted, tested, branded and is market ready. Large retailers embrace products provided by entrepreneurs as long as the product is fully developed for market. Most importantly entrepreneurs are provided with access to funding through organisations like the IDC and the NEF etc.

Operating in the townships has not only taken The Innovation Hub to the people but it has resulted in the discovery of some rare skills that otherwise would not have been discovered. One such business is Aerobuddies run by pilot Joe Phalwane, who has opened a school in Soweto that has a two-fold focus in firstly encouraging students to study maths and science allowing them to have more career choices and secondly for those students wanting to follow a career as a pilot. Students get to experience flying by means of flight simulators something not seen before in a township. His programmes are run after school and during holidays.

Since 2014 eKasiLabs has created 410 jobs by entrepreneurs that have been in the programme. The programme currently supports 320 entrepreneurs who are both in the pre-incubation or pre-commercialization stage where they are not yet income generating as well as those who have progressed to the commercialization stage where they are generating income as well as employing people in their businesses.

The success of eKasiLabs is undeniable with government responding to the needs of communities underpinned by the importance of job creation and economic development being the very reason that they exist. There are plans to expand the programme in line with the expansion of the Province’s economic corridors by opening more eKasiLabs in the near future.