Incubation Support Programme (ISP)

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The Incubation Support Programme is an initiative by the DSBD and SEDA aimed at supporting the establishment of incubators and digital hubs to assist in the creation of new enterprises and job opportunities.
What are the main aims and objectives?

The central goal of the Incubation Support Programme is to encourage private sector partnerships with Government to support incubators in order to develop SMMEs and nurture them into sustainable enterprises that can provide employment and contribute to economic growth. This is achieved through the establishment of physical incubators and digital hubs to transfer skills to small businesses and cooperatives, with the aim of attaining the expected quality standards and specifications of firms. The programme targets South African registered and tax-compliant entities with vast experience in the development and mentoring of early-stage enterprises and cooperatives. Additionally, the government set an objective of 250 incubation and digital hubs by 2024 including at least 100 stand-alone incubators. The intention of the program is to provide funding for incubators that over time can generate revenue through the provision of services and initiatives that can be self-sustainable.

How does the program work?

The Incubation Support Programme operates by providing market-driven support to early-stage entities, aiming to prepare them to supply to local markets. This is achieved through the establishment of physical incubators and digital hubs, which transfer skills to small businesses and cooperatives with the goal of meeting the expected quality standards and specifications of firms. The programme targets South African registered and tax-compliant entities, offering funding between five to ten million rand. It operates on a cost-sharing basis, with a ratio of 90:10 between the Department of Small Business Development (DSBD) and eligible applicants.

The incubation support was made available on a cost-sharing basis between the Government and private sector partner(s). It is available for infrastructure and business development services necessary to mentor and grow enterprises to ensure that within 2 to 3 years the enterprises will graduate to a level of self-sustainability by providing products and services to the market.

Eligibility criteria include:

  • The programme is available to applicants that want to establish new incubators or wish to grow and expand existing ones.
  • The supported incubator may either offer physical and/or virtual incubation support services.
  • The incubator to be supported may be a corporate incubator; a private investor’s incubator; an academic or research institution incubator in partnership with industry, and must be focused on establishing and/or growing enterprises that will graduate to sustainable enterprises.

Additionally, the applicant must either be:

  • A registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Companies Act, 2008 (as amended); the Close Corporations Act, 1984 (as amended) or the Co-operatives Act, 2005 (as amended); or
  • Be a registered higher or further education institution; or
  • Be a licensed and/or registered science council. The programme is available to applicants that want to establish new incubators or wish to grow and expand existing ones.

The supported incubator may either offer physical and/or virtual incubation support services. The incubator to be supported may be a corporate incubator; a private investor’s incubator; an academic or research institution incubator in partnership with industry, and must be focused on establishing and/or growing enterprises that will graduate to sustainable enterprises.

What is the overall cost?

There is no available information on the overall cost of the Incubation Support Programme.

How was it implemented?

The Incubation Support Programme is implemented by the Department of Small Business Development (DSBD) in collaboration with the Small Enterprise Development Agency (SEDA). The implementation involves the establishment of physical incubators and digital hubs, which serve as platforms for transferring skills to small businesses and cooperatives. These incubators and hubs are strategically placed to cover various districts in South Africa, with a focus on underserviced provinces and districts aligned with the SMME Support plan. The programme also involves partnerships with the private sector to enhance its impact.

What impact has been measured?

To date, 101 incubators have been established which include 22 Centres for Entrepreneurship and Rapid Incubation (CFERIs) in TVET colleges and Universities including an additional four (4) centres at the University of Johannesburg (Soweto Campus), Rhodes University (Makhanda Campus), Nelson Mandela University (Gqeberha Campus) and University of Venda (Thohoyandou Campus). SEDA will also facilitate the establishment of an additional 27 new incubators, mainly in townships and rural areas. The new incubators will assist with the establishment of approximately 1 290 new enterprises that are expected to create at least 25 000 new jobs. The already existing 79 incubators have assisted SMMEs to sustain 86, 000 jobs with SMME ecosystem partners.

CURATED BY

Siddharth Bannerjee

Researcher, Digital Startups
Nesta
United Kingdom