Monday, October 25, 2021

De Beer’s seed transformation program, an antidote to SMEs?

Based on what was previously found out about small and medium enterprises (SMEs) in Botswana, the anticipated Stanford University leadership programme could be regarded the antidote to the crude deficiency of mentorship characterising SMEs in the country.

A decade ago Peter Hinton, Unami Mokobi and Caspar Sprokel compiled a paper titled ‘Botswana small and medium enterprise under-banked market research’ which provides the most recent comprehensive details of SMEs in Botswana. On the subject of mentorship the researchers found that 69 percent of the SME enterprises they assessed identified the need for a mentorship for all aspects of their businesses. They had interviewed a total of 180 businesses based in Gaborone, Francistown, Molepolole, Maun and Selebi Phikwe who were drawn from varied economic sectors.

When asked if an analysis was done to identify gaps to fill within the local SME environment Jeffrey Pickett, Director of Global Operations for Stanford Seed, responded that they worked closely with De Beers and Botswana Innovation Hub to derive the existing state of affairs of the local business ecosystem. The enquiry to Pickett is particularly important in establishing whether the criteria applied by Stanford University for the selection of entrepreneurs into the programs is consistent with what prevails on the ground. Case in point is how many of the SMEs in Botswana generate a turnover within the range of P1.5 million and P150 million as specified by the University as a criteria for participation. That said though, Pickett emphasised that “we’re looking to evaluate each company on its merit. So we’re not going to eliminate a company arbitrarily just because they don’t meet the numbers” adding that “if it’s an interesting company, we’re going to talk to them.”

The researchers mentioned above cited that the Small Business Promotion Agency (SBPA) had estimated that 56 300 small and medium enterprises (SMEs) were operating in Botswana. The SBPA was set up to review the impact of government policies on SMMEs and developing and monitoring initiatives in this area. Of this estimated SMEs approximately 50 000 were determined to be very small enterprises with 65 percent involved in trading activities, 25 percent in manufacturing and 10 percent in other sectors. Some 6000 were picked out as small enterprises with 40 percent in service sector, 20 percent in manufacturing, 16 percent in retailing, 10 percent in transport/distribution, 6 percent in construction and 8 percent in agriculture. There were about 300 active medium enterprises nationwide, with the majority engaged in some form of manufacturing. The number of employees ranged between one and five including the owner, six and 25, 26 and 49 for very small, small and medium enterprises respectively. The turnover was indicated to have been less than P60 000 for very small enterprises, between P60 000 and P1.5 million for small enterprises and between P1.5 million and P5 million for medium enterprises.

It can be observed from the turnover figures cited by the research paper that they vary greatly with those specified by Stanford University. However given that a decade has passed since the paper was compiled it could be assumed that overtime the enterprises reached growth levels that now places them in par with figures specified by Stanford University.   

The American University will, through a three year partnership it entered into with De Beers Group launched last week Monday, empower aspiring entrepreneurs and established business owners in Botswana, South Africa and Namibia. Through this partnership the Stanford Graduate School of business will teach two programmes, being the Seed Transformation Program and the Stanford Go-To-Market, expected to begin in 2018. Regarding Botswana, De Beers has committed to fund the participation of 10 local entrepreneurs in the Seed Transformation Program which comes at a cost of P50 000 ($5000) per participant.

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Read this week's paper