SCIENCE AND TECHNOLOGY FOR SMES: AN AFRICAN PERSPECTIVE.
Micro, small and medium enterprises (mSMES) are in a global dimension defined as those investments that employ fewer than 250 people. Micro enterprises employ less than 10 people, small enterprises employ between 10 and 50 people whereas medium enterprises employs between 50 and 250 people. According to this broad classification, most African investments fall under mSMES and hence should be treated with the utmost significance.
It is a fact for example that over 80 percent of firms in Congo are micro enterprises and almost 93 percent of all industrial firms in Morocco are SMES. In terms of economic prowess of these kind of enterprises, figures show that in Kenya, this sector employs over 400,000 thousand people annually.
In South Africa the case is no different, over 50 percent of jobs created annually are in the small and medium businesses sector and contributes over 20 percent of the GDP. How can we justify this? Whenever you take a walk in any major and small towns in African countries, one cannot miss to spot small kiosks, shops and open market vendors. These are the people who comprise micro enterprises.
In areas more developed like in major cities, companies and industries are common which in most cases employ less than 250 people. In this category lie the small and medium enterprises. This small and medium enterprises have grown widely in Kenya for instance since the turn of the century. Political and financial developments have largely promoted this.
CHALLENGES FACING SMES
Despite the huge contribution by this sector, challenges have been hindering their faster growth and transition. Low and underdeveloped infrastructure is a great challenge. Without good transport systems and affordable housing, small firms cannot thrive well. Among these are other challenges as, low adaptation to advanced technology, poor market access, low credit access and harassment from government.
The harassment comes from the government in form of city council policemen and women who go about mishandling the business people and also in form of unfriendly tax tariffs.
SCIENCE, TECHNOLOGY AND SMES
Most of the challenges listed above can be solved right here in Africa by us. There has been an increased embracement of technology by some small and medium businesses as a way of growth strategy. Many countries are investing more on improving their networks and using the latest, quickest and most efficient technologies. Airtel Africa for instance unveiled a 3.7G network while in Kenya, the leading mobile and internet provider Safaricom unveiled a 4G network. A newer form of technology for businesses, Faiba, which is very fast and uses fiber optic technology, is taking root among small and medium enterprises in Africa.
Mpesa, another technology developed in Kenya some years back is changing and exploring to other fields like banking and credit services for businesses. This form of mobile money transfer has in itself provided a myriad of opportunities to young Kenyans in terms of employment creation and provision of funds for research purposes in fields of technology and science. I am optimistic that in a few years to come, this technology will transform lives of billions of people beyond the African jurisdiction.
The global entrepreneurship summit 2015 was held in Kenya’s capital, Nairobi. New technologies that are creating online platforms for buyers and sellers in Kenya to interact have been developed and were areas of interest in the summit. These technologies are changing the face of businesses in Kenya as far as the remote areas.
Science on the other hand holds potential growth ability for the African mSMES. Developing good policy frameworks that safeguards and encourages new innovations and ensures transformation of such innovations to potential enterprises should be encouraged.
African growth is sorely rooted in science and technology. Doing relevant research and transforming them to potential businesses will encourage industrialization and create more job opportunities. Distribution of wealth will be uniform and as such, more mSMES are definitely going to develop in the next few years.
Now that china and other European countries are providing funds for research and others as funds for business loans and grants for African start ups, this century will definitely see Africa transform greatly. We will explore more on part 2 of this series.