Some entrepreneurs have identified a lack of funding and delays in funding allocations as the main contributing factors to poor growth and innovation in small, medium and micro enterprises (SMMEs) in the ICT sector.
Owners, funders, the government and other stakeholders discussed this and other issues facing the sector — including how to best integrate artificial intelligence (AI) into their operations — at the fourth annual “SMMEs in ICT” summit in Sandton on Thursday.
At a national AI government summit held in April, communications & digital technologies minister Mondli Gungubele announced the establishment of an advisory council that would develop AI policy to regulate the growing adoption and use of the technology.
According to PwC’s 2023 emerging technology survey, at least 73% of companies in the US have adopted AI in some aspect of their business. The US has led the integration, followed by China. The market is projected to reach $184bn (about R3.3-trillion) this year.
Lufuno Tshikalange, a cyberlaw specialist and entrepreneur, said there was a need to address the country’s digital divide, which plays a role in SMMEs struggling to integrate AI. She said there was no support system for businesses to get information on how to take advantage of online platforms.
“As it is now, it’s very difficult. When I go looking for funding, there should have been someone who came to me for training. Now I get there, and [it] seems like I don’t know what I am doing,” she added.
When I go looking for funding, there should have been someone who came to me for training. Now I get there, and [it] seems like I don’t know what I am doing
— Lufuno Tshikalange, cyberlaw specialist
Onkgopotse Khumalo, founder of Amari Health, an online platform offering mental health solutions, said that, while many companies were eager to integrate AI into their operations, funding to make this transition was either non-existent or took too long to be approved and disbursed.
Khumalo said it was important for the government and small business funders to make this transition first, which would assist them in accelerating due diligence processes for funding applicants.
“I think one of the gaps is processing applications, and allocators of capital need to start looking at innovative ways of accelerating those timelines.”
Keitumetse Hlahatsi, communications specialist at the Universal Service and Access Agency of South Africa (USAASA), explained why the release of funds was sometimes prolonged. She said that, for state-owned companies, due diligence took a long time because USAASA wanted to avoid releasing funds to companies that were not compliant with the relevant laws and regulations.
“Due diligence is important. We follow the Public Finance Management Act, and we need to abide by those rules. It also prevents [us] giving money to companies who may not exist or are engaging in fraudulent activities,” Hlahatsi said.
Communications and digital technologies deputy director-general Mlindi Masholoku encouraged businesses to embrace the growing use of AI and apply for funding related to this purpose.
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