Small and medium enterprises (SMEs) that export goods are powerful drivers of economic growth, job creation, and innovation. They contribute significantly to the economic well-being of the country by expanding into international markets.
However, they also face various challenges that require government support and proactive measures to overcome these challenges. Encouraging and facilitating the growth of exporting SMEs can lead to a more robust and resilient economy, benefiting both businesses and citizens alike.
For SMEs to succeed, we need a collaborative approach to overcome challenges and find opportunities for long-term success. Exporters Eastern Cape commend the Eastern Cape Development Corporation (ECDC), in line with the Eastern Cape Export Strategy, for setting up an Export Market Access Fund to support efforts towards accessing global markets by Eastern Cape businesses, stimulate job creation and position the Eastern Cape province as a reliable source market for exports. The Eastern Cape Export Strategy is aimed at positioning the province as a competitive location for exports and export-oriented investments, whilst growing the pool of value-added exporters of goods and services in the province. This is done through facilitation and improvement of exports and creation of a conducive environment in which government, business and communities collaborate in exporter enterprise development and export promotion.
The fifth Eastern Cape Export Symposium which was recently held in East London, created another opportunity for emerging businesses to connect and network with potential new markets. It was encouraging to witness the number of SMEs who are keen to expand their products and services beyond the South African boarders. Symposiums provide networking opportunities which help explore various forms of support such as financial incentives and trade facilitation initiatives which empower SMEs to seize export opportunities.
Relying solely on domestic markets can be risky for SMEs whereas exporting allows them to diversify their customer base, reducing their vulnerability to economic downturns in their home country. When one market faces challenges, SMEs can offset losses by relying on other international markets.
To compete in international markets, SMEs must innovate and adapt to meet the needs and preferences of diverse customer bases. This drives innovation and encourages the development of new products and services. As they strive to remain competitive globally, it is imperative that SMEs invest in research and development, which contributes to technological advancements.
These nimble and adaptable businesses have the unique advantage of being able to cater to niche markets and respond swiftly to changing consumer demands. In the era of globalisation and digitalisation, SMEs are well-positioned to tap into international markets and expand their reach. E-commerce platforms, international trade agreements, and improved logistics have significantly lowered the barriers to entry for SMEs looking to export their products and services across borders. The African Continental Free Trade Agreement (AfCFTA) for example plays an important role in harnessing trade on the continent and Africa in particular presents significant opportunity especially with a relatively young population and a growing middle class.
Moreover, SMEs must make use of the opportunities which are presented by larger firms whom they supply or collaborate with. Supplier development programmes are key to ensuring quality, consistency and efficiency within their business and contribute to long term sustainability and profitability.
I want to thank the National Association of Automotive Component and Allied Manufacturers (NAACAM) and the International Finance Corporation (IFC) for creating further opportunities for SMEs through the launch of the Localisation Optimisation Opportunity Platform (LOOP). This matchmaking platform assists emerging businesses to meet the procurement needs of original-equipment manufacturers (OEMs) and tier-one component suppliers.
Through the platform, OEMs and tier-one suppliers can be matched with the capabilities of lower-tier, emerging suppliers in an effort to drive localization which provides businesses potential procurement opportunities in the automotive sector.
Quintin Levey, Exporters Eastern Cape Chairman
The Herald – Let’s Talk Exports – Published September 2023