In this bleak landscape, small, micro and medium enterprises (SMMEs), lately known as Micro, Small, Medium Enterprises (MSMEs) should be our engine of hope. MSMEs make up 98% of registered businesses, and contribute roughly 34% to GDP. Yet most don't make it past their third year.

The truth is uncomfortable but unavoidable: while government and development agencies are working tirelessly to support SMMEs, we are preparing entrepreneurs for an analog economy that no longer exists. The missing ingredient in our support model isn't just funding or mentorship — it's digital readiness. Without it, we are setting up entrepreneurs to compete with outdated tools in a digital marketplace.

The Fragmentation Problem

Government entities like the Department of Small Business Development, SEDA, Sefa, NYDA and provincial agencies provide valuable training, advisory and financing. However, these efforts remain fragmented and analog in delivery. Entrepreneurs are forced to move between multiple agencies with different systems and requirements, often without a single integrated journey from idea to operational business.

Digital transformation is still treated as an optional extra rather than as the foundation of modern business. Entrepreneurs learn to write business plans on paper, but when it comes to digital operations, from online banking to e-commerce, they are left to figure it out alone.

For many, the challenges are compounded by limited connectivity, lack of digital literacy and inadequate access to devices. Programmes that do introduce technology often deliver generic "social media marketing" lessons to everyone, whether it's a spaza shop owner in Giyani or a software developer in Cape Town, without considering sector or context.

Competing Without Digital Tools

The result is predictable. SMMEs don't fail because of a lack of creativity or drive; they fail because they are digitally outmatched. In a globalised economy, a customer in Soweto can order a product from Shenzhen as easily as from a local small business. Without digital sophistication, local SMMEs will continue to lose market share on their home turf.

A New Vision for MSME Support

It doesn't have to be this way. After three decades leading digital transformation at UNISA, Transnet, the South African Reserve Bank, and across 49 African countries with DHL, I have seen the power of technology to fundamentally change economic outcomes. What South Africa needs is an integrated SMMEs Digital Transformation Programme, one that embeds digital capability throughout the entire entrepreneurial journey.

This isn’t about adding “digital literacy modules” to existing programmes. It’s about reimagining SMME support as inherently digital from day one.

The Core Principle: Digital Foundation Before Business Building

Just as we wouldn't teach someone to drive before ensuring they can see, we shouldn't teach business strategy before establishing digital infrastructure. The programme must follow an integrated pathway:

  • Phase One: Digital Foundation — Assess and address baseline digital readiness (connectivity, devices and literacy) before any business development begins.
  • Phase Two: Parallel Legal and Digital Identity — Register the business legally while simultaneously establishing its digital presence — professional email, social media, online banking and basic website.
  • Phase Three: Product Definition and Digital Positioning — Define offerings while learning to position them in digital marketplaces through e-commerce platforms, social media and online marketing.
  • Phase Four: Operations and Marketing Technology — Implement appropriate digital tools for inventory, customer management, accounting and marketing — matched to business sophistication level.
  • Phase Five: Funding and Financial Technology — Navigate funding landscape while establishing digital financial management practices that satisfy lender requirements.
  • Phase Six: Data-Driven Growth — Use analytics for strategic decisions, automate operations, scale marketing and continuously enhance digital capabilities over 24 to 36 months.

This programme differs from traditional approaches in several key ways. It emphasises integration rather than fragmentation — one digital platform, one application, one journey. It is mobile-first, designed for South Africa's connectivity realities and smartphone reliance. It's personalised, recognising that not all entrepreneurs start from the same place. And critically, support continues for at least 24 to 36 months, the period when most SMMEs fail, instead of ending at launch.

The Business Case for Going Digital-First

The economic case for this transformation is clear. The COVID-19 pandemic taught us that digital capability determines business survival. Companies that embraced e-commerce, digital payments and virtual engagement weathered the storm. Those that didn't, disappeared.

South Africa's SMMEs now compete globally whether they realise it or not. The digital marketplace has no borders. Without digital sophistication, we will continue losing revenue and jobs to international competitors. At the same time, our youth unemployment crisis will only deepen unless we create digitally enabled pathways for entrepreneurship. Traditional jobs cannot absorb the millions of young people entering the labour market each year. Digitally empowered entrepreneurship can.

Technology as Economic Infrastructure

We must also shift our mindset about technology. Digital tools are not luxury add-ons; they are economic infrastructure: as vital as electricity or transport. Treating digital transformation as a "nice-to-have" perpetuates exclusion and inequality.

To make this vision real, we need coordinated leadership. Government must champion a unified, digital-first model linking SEDA, Sefa and the NYDA. The private sector must invest in technology access, mentorship and markets at scale because a thriving SMME ecosystem sustains corporate supply chains and national competitiveness. Development finance institutions must fund digital transformation as infrastructure, not as a social project. And entrepreneurs themselves must demand integrated support, recognising that digital capability is not a privilege, it's their economic right.

A Call to Bold Leadership

If implemented effectively, an integrated digital SMME transformation programme could enable 50 000 digitally empowered businesses within five years, create up to 200 000 jobs, and contribute R15 to R20-billion to GDP. More importantly, it would democratise opportunity, giving an entrepreneur in Limpopo the same access to digital tools as one in Sandton.

As we celebrate Entrepreneurship Month, South Africa must decide whether to continue with fragmented, analog-era support systems or to take the leap into a digital-first future. The expertise exists. The infrastructure is available. The economic case is undeniable. What we now need is the will to act.

For more information, visit www.africadigitalsuccess.com. You can also follow Africa Digital Success on Facebook, LinkedIn, or on Instagram.

*Image courtesy of contributor