The cooperatives model as an approach to SMME development in South Africa with specific reference to the information, communication and technology (ICT) sector

M.A.Small enterprise development is considered a priority in most developing countries and, South Africa’s not an exception. The rationale for prioritising SMMEs is premised on their potential ability to contribute to the alleviation of the socio-economic challenges facing most developing countries such as unemployment, poverty and low levels of economic development. For South Africa, SMME development is seen as an appropriate strategy that could assist government in its endeavours of bridging the gap that exists between the two economies (first and second economy). To date, the government has utilised various business models to facilitate the entry and development of small enterprises in the mainstream economy. These models include amongst others a close corporation, cooperative and private company. Whilst all three models have been effectively applied across all sectors of the economy such as agriculture, retail services, manufacturing and others, the cooperatives approach/model has not been successfully exploited for the development of small enterprises within the Information Communication Technology (ICT) sector. Using international case studies, this study has been able to demonstrate the critical role that could be played by the cooperative model in facilitating an accelerated development of viable small enterprises within the Information and Communication Technology (ICT) sector in South Africa. Internationally, cooperatives have played a pivotal role in their contribution to economic development in both developed and developing countries. The model has the potential to promote economic growth at the community and regional level, building on the spirit of cooperation that is already prevalent in rural areas. In the ICT sector, the cooperatives approach has been applied as a model for the development of sustainable ICT small enterprises. In actual fact, the model has been instrumental in enhancing small enterprise development in countries such as Argentina, Poland, USA and Bolivia, just to mention a few. It therefore becomes critical for South Africa to consider lessons from these countries, so as to take advantage of the opportunities offered by the cooperative model. However, government needs to put in place appropriate ICT sector specific support structures that would assist people willing to start cooperative enterprises within the ICT sector. In the United States, government introduced a sector-specific bill to facilitate the establishment of the Rural Telephone Administration. The bill made it possible for long-term loans to be made to telephone cooperatives at low interest rates, thus accelerating the development and procurement of rural telephone systems. In Poland, government established a sector-specific Trust Fund referred to as “Balazs Social Trust Fund” solely to support the development of ICT cooperatives in rural areas. Thus, for South Africa to accelerate its pace of development it might need to adopt and customise this model. To ensure continuous monitoring and measurement of the impact of these interventions, government needs to put in place appropriate measurement tools