Submitted in fulfilment of part of the requirements for the degree of Doctor of Technology in the Faculty of Management Sciences at Durban University of Technology, 2007 / The South African small business sector, particularly the manufacturing industries, such as textile, clothing, and automotive industries, are not considered internationally competitive. This shortcoming is seen in the context of liberalizing and transforming the South African economy, and the threat of foreign competition such as China. This study takes a systems view of the problems that are facing small businesses in South Africa, drawing on historical, theoretical and empirical sources within a proposed framework for small business international learning. The various elements in the framework include international competitiveness challenges facing small businesses, which, the author argues, create tension for survival within small businesses; the limited role of the small business support regime in South Africa; and the role of Foreign Direct Investment through Transnational Corporations (TNCs). Therefore, this study investigates the international learning processes of small businesses and develops a new theoretical model to illustrate and elucidate interventions to strengthen international learning processes of these small businesses. Methodology The manufacturing sector was chosen as the ideal sector for this study since it contributes significantly to the GDP and levels of employment of a country, and is at the receiving end of new production methodologies and technologies and other competition dynamics. This sector, at a small business level, is currently experiencing international competitiveness challenges in South Africa. The methodology followed an initial exploratory, qualitative approach followed by a formal, empirical, quantitative approach. The research questionnaire met the quality criteria as established through content validity, criterion related validity, and reliability criteria. This questionnaire was administered to a sample of 300 out of a population of 800 manufacturing small firms in Durban, using an unrestricted random probability sampling method. A total of 255 completed questionnaires were returned, and the results were expressed at the 95% confidence level with a confidence interval of 0.05. Results and Discussions From the correlation analysis of the level of importance and extent of implementation of international learning processes, four international learning processes, whose implementation can be enhanced by an improvement in the importance of international competitiveness challenges and support, were extracted. These international learning processes include increased learning activities on management, sales and marketing, finance, and also the image of small businesses. Through the consolidation of the results of the correlation analysis, a theoretical model for the identification and development of international learning processes was created. Conclusion From the small business practice and policy point of view, this study s findings suggest that the international learning processes of small businesses confronted by international competitiveness challenges in transforming developing economies can be strengthened by applying the theoretical model developed in this study. From the government, TNCs, and small businesses perspective, this study s findings also suggest that the establishment of linkage programmes and enhancement of learning activities, which revolve around the identified international learning processes as established in the theoretical model, will enable the attainment of international competitiveness of small businesses. This study, therefore, proposes the implementation, in the short-term, of information and linkage support at sector level that addresses the enhancement of the identified international learning processes; and the implementation, in the longterm, of a grand-scale small businesses and TNCs linkage programme in line with the premise provided in the theoretical model.

Submitted in fulfilment of part of the requirements for the degree of Doctor of Technology in the Faculty of Management Sciences at Durban University of Technology, 2007 / The South African small business sector, particularly the manufacturing industries, such as textile, clothing, and automotive industries, are not considered internationally competitive. This shortcoming is seen in the context of liberalizing and transforming the South African economy, and the threat of foreign competition such as China. This study takes a systems view of the problems that are facing small businesses in South Africa, drawing on historical, theoretical and empirical sources within a proposed framework for small business international learning. The various elements in the framework include international competitiveness challenges facing small businesses, which, the author argues, create tension for survival within small businesses; the limited role of the small business support regime in South Africa; and the role of Foreign Direct Investment through Transnational Corporations (TNCs). Therefore, this study investigates the international learning processes of small businesses and develops a new theoretical model to illustrate and elucidate interventions to strengthen international learning processes of these small businesses. Methodology The manufacturing sector was chosen as the ideal sector for this study since it contributes significantly to the GDP and levels of employment of a country, and is at the receiving end of new production methodologies and technologies and other competition dynamics. This sector, at a small business level, is currently experiencing international competitiveness challenges in South Africa. The methodology followed an initial exploratory, qualitative approach followed by a formal, empirical, quantitative approach. The research questionnaire met the quality criteria as established through content validity, criterion related validity, and reliability criteria. This questionnaire was administered to a sample of 300 out of a population of 800 manufacturing small firms in Durban, using an unrestricted random probability sampling method. A total of 255 completed questionnaires were returned, and the results were expressed at the 95% confidence level with a confidence interval of 0.05. Results and Discussions From the correlation analysis of the level of importance and extent of implementation of international learning processes, four international learning processes, whose implementation can be enhanced by an improvement in the importance of international competitiveness challenges and support, were extracted. These international learning processes include increased learning activities on management, sales and marketing, finance, and also the image of small businesses. Through the consolidation of the results of the correlation analysis, a theoretical model for the identification and development of international learning processes was created. Conclusion From the small business practice and policy point of view, this study s findings suggest that the international learning processes of small businesses confronted by international competitiveness challenges in transforming developing economies can be strengthened by applying the theoretical model developed in this study. From the government, TNCs, and small businesses perspective, this study s findings also suggest that the establishment of linkage programmes and enhancement of learning activities, which revolve around the identified international learning processes as established in the theoretical model, will enable the attainment of international competitiveness of small businesses. This study, therefore, proposes the implementation, in the short-term, of information and linkage support at sector level that addresses the enhancement of the identified international learning processes; and the implementation, in the longterm, of a grand-scale small businesses and TNCs linkage programme in line with the premise provided in the theoretical model.

The humble beginnings of business incubators date back to the 1970s in the USA and United Kingdom, where abandoned industrial buildings were converted to rent out to small businesses. South Africa (SA) was first introduced to business incubation in the 1980s when the Small Business Development Corporation (SBDC) established a number of business ‘hives’ and provided business space to entrepreneurs to operate their businesses. In their most basic form, business incubators provide a safe and nurturing environment for entrepreneurs to establish their small businesses. While in incubation, the Small and Medium Enterprises (SMEs) are supported with a number of services which assist their growth and development until they are able to exit the incubator as sustainable and viable businesses. Global incubator models have matured significantly, and now include assisting with business idea generation, accelerating business start-ups and commercialisation processes, and identifying high-growth orientated SMEs to assist them with gaining market access. The establishment of business incubators was a government-driven initiative, and more than 33 SME incubators exist in SA. Most of the incubators are government-funded, and have focused on the establishment and growth of SMEs to act as a catalyst to promote economic development and alleviate socio-economic challenges such as unemployment and poverty. Despite these noble objectives, incubation in SA has not been fully utilised, and a high SME failure rate still prevails in the country. One of the reasons for SME failure may be ascribed to the lack of an enabling SME incubation environment in SA. When compared to other developing countries such as Brazil with as many as 400 incubators, it is clear that the SA incubation industry still needs further development. The purpose of this study therefore was to ascertain the best practices of global business incubators in both developed and developing countries, and how SA incubators could learn from these best practices to create a more conducive and enabling SME incubation environment. Background literature on business incubation with a specific focus on best practices in world incubators in both developed and developing countries, was reviewed. Some of the literature reviewed included Aernoudt (2004), Buys and Mbewana (2007) and Chandra (2009). From the literature review, four main best practice areas were identified, namely strategic focus, sources of funding, incubator services, and the role of government. The study followed a qualitative approach, and an interview schedule was developed to seek the perceptions of incubator managers on how the four identified best practices can be utilised to create an enabling SA incubation environment. A survey was conducted by interviewing 14 incubator managers (twelve government and two private) in SA. Data was collected over a six-month period, using face-to-face and telephonic interviews. Data was analysed using the content analysis, constant comparison, grounded theory and case study methods. The biographical profiles of the incubator managers and incubators were presented in case studies. An initial analysis was made to identify themes and sub themes within the four best practices explored, using the constant comparison method. Thereafter a provincial comparative analysis was made, as well as a comparison of government funded versus privately funded incubators. The findings suggested that there is a relatively high turnover in incubator management, and that they often do not have incubator management experience. A provincial comparison of SA incubators revealed that their strategic focuses are greatly influenced by the industry prevailing in the various provinces. All SA incubators provide pre- and post incubation services, but few are utilising virtual incubation. Most SA incubators are government-funded, and some use a hybrid funding model. It was evident that most SA incubators are aware of government policies and programmes available to assist them on local, provincial and national levels. A comparison of the best practices of two developing countries and three developed countries, as well as suggestions made by SA incubator managers indicated that SA has indeed followed best practices from both developing and developed countries, but there are areas of non-alignment which provide scope for improvement, to create a more conducive and enabling incubation environment. This study recommends that incubators should have an entrepreneurial focus, and reposition and align their strategic focus with government policies and instruments. SA incubators must pursue opportunities for virtual incubation as well as linkages with academic institutions, in order to offer value-added services such as research, development and commercialisation of the product ideas. Incubators in SA must pursue a hybrid funding model with a combination of government and private funding, and generate some or their own income. With regard to the role of government, it is recommended that the roll-out of more industry-specific incubators be privatised, and that an overseeing body for incubation be established.

The informal economy in South Africa and other parts of the continent is a safe haven for many who are unable to find jobs in the formal sector of the economy. In the case of South Africa, it is not only the nationals of the country who are striving to survive and generate their income from this sector. Since 1994, the country has experienced a huge influx of immigrants from other parts of the continent some escaping from dire living conditions in their home countries and looking for better life opportunities while many others were forced to migrate from their own countries as a result of political unrest and lack of stability and security. Among these later example is the Somali community who are the subject matter of this study. Many of these mainly African immigrants including Somalis got involved themselves in the informal sector of the South Africa. This has increased the competition in this sector and caused clashes between South Africans and immigrants who were also involved in the sector. This study examines the involvement of the Somali immigrants in South Africa’s informal sector. The study is exploratory in nature and tried to find the surrounding factors that impacted on the involvement of Somalis in the informal economy of Motherwell. The study has found that Somalis who arrived in Motherwell are generally young unmarried men who were attracted to the area mainly because there were affordable business opportunities in the township. Somalis financed their businesses through various resources including their savings from working while working inside and outside South Africa and from the contributions by their families and friends. Despite facing high levels of crime where many Somalis were killed and their property looted, they are still determined to stay in the township. This can be shown by their high level of savings and their intention to invest in the township. Although this research does not aim to be comparative in nature, personal and business characteristics of Somalis as well as South Africans who are also involved in the sector vii were compared. Because of this comparison, it has became clear that though price is an important factor in the business competition between the two groups, it is not the only factor, neither the most important, that creates friction and the shift of loyalty of customers from one side to another. Quality of service, the number of the people working in the business, responsibility towards the area the business serves, the strictness or the leniency towards customers who want to buy but are short of money and many other factors created a friendly atmosphere between the businesses run by the Somalis and their customers. The study showed that some of the Somali as well South African business owners were of this view. Although the vast majority of the Somalis have a minimum level of education, they still contribute positively to the economy of the township and the greater Nelson Mandela Bay. This is done through renting business premises, paying both direct and indirect taxes and taking the business services to remote areas of Motherwell. The study suggests that there is a need to sooth the relationship between the two groups particularly between Somalis and South Africans who are involved in grocery businesses through meetings, seminars, and other get-together activities. This can be done by South African Police Service, Somali Association of South Africa in Korsten, community elders from both sides and other concerned government institutions as well as the academic institutions particularly Nelson Mandela Metropolitan University. The business skills of both groups need to be uplifted in order to maximise their profitability and contribution to the people in the area.

The focus on entrepreneurs as drivers of the economies of nations has catapulted them into the forefront of the local and international marketplace. This has led to a demand for entrepreneurial education and training resulting in a plethora of different and often divergent views. One commonality that has emerged is that entrepreneurship can be taught; although it cannot be taught in conventional and traditional ways. It requires a move from traditional education and training to more enterprising participative and supportive forms of business development. It requires investments of time, resources and support. Incubators are facilities that are engaged with entrepreneurs and offer a variety of support including education and training. This study has assessed the effectiveness of training offered by the Seda Nelson Mandela Bay ICT incubator. There has been limited research undertaken on entrepreneurial education and training in an incubator setting. This study followed the qualitative paradigm. The sample comprised of 10 small businesses at the Seda Nelson Mandela Bay ICT incubator. Empirical data was obtained by interviewing the owners of the small businesses using an interview schedule. Issues such as the most effective training programme, content that it contained, methodology used and quality of the facilitator and applicability of the training programme were explored. The study found that the small businesses were opportunity driven rather than necessity driven and that the incubator served as a bridging facility in moving the businesses from the informal sector to the formal sector. The content of the training programmes was found to be effective when a mix of both theoretical and practical is offered especially with an emphasis on the underlying entrepreneurial themes of confidence, persistence and uncertainty and so on. It also found that training programmes should be linked to the life cycle of the business and address the specific needs of the small business owner. The start-up phase requires very specific training. Most of the facilitators were found to be experienced and empathetic. However, only a few were using a wider range of preferred learning styles favoured by entrepreneurs such as role playing, simulation, brainstorming and problem-solving techniques. The study also found that when generic training programmes are offered there was less recall on the part of the trainees. The management team of the incubator is an important determinant of the success of the incubatees and it is recommended that they need to be well versed in their sector and have good networking skills. There is a strong link between the theoretical and the practical content of training programmes especially where the emphasis is more on the practical content. It is recommended that facilitators pay attention to their relationship with trainees as it is a critical success factor in the training programme. Training programmes offered over a period of time add more value to the incubatee. This might be because of the mentoring and counselling that is available after each training module is completed. Finally, more research needs to be undertaken on the quality and effectiveness of training programmes offered by incubators to small businesses.

Thesis (MBA)--Stellenbosch University, 2008. / ENGLISH ABSTRACT: Collaborative strategies such as strategic alliances are being adopted by small and large companies to gain a competitive advantage in a fast changing global and local business environment. Companies are recognising the value of achieving their business goals through mutually beneficial strategic alliances. Strategic alliances provide a more flexible, non-permanent means through collaborative engagement between companies to attain complementary services, skills, products and resources. This study aimed to contribute to an understanding of the nature of strategic alliances between large and small companies within the information technology (IT) sector in South Africa and to highlight the particular dynamics, challenges and success factors from the perspective of these companies. The research question posed was: "What are the success factors that impact on the sustainability of strategic alliances between large and small companies within the IT industry in South Africa?" In this study, a strategic alliance was defined as a "co-operative arrangement between two or more local and / or global firms that invest in a collaborative effort to achieve their individual and mutual goals and positively impact their competitive positioning". Limited research had been conducted on strategic alliances in South Africa in general and no research was available on the IT sector. This exploratory research study was conducted to provide an overview of the dynamics and issues related to strategic alliances keeping the respective contexts of small and large companies in mind. This study contributes to an understanding of the respective contributions of small and large companies in complementing their respective strengths and experiences to achieve business objectives. This area of study supports government policies and initiatives in promoting the collaboration between large and small companies in developing the economy and the small business sector in particular. Within a dynamic and fast-growing information communications technology (ICT) sector, there are increasing opportunities for strategic alliances between small and large companies within the IT sub-sector. A qualitative, inductive research approach was used to determine the kind of alliances that existed, test the themes identified in the literature review in relation to the South African context and identify new insights based on the experiences of respondents engaged in strategic alliance relationships. This approach supported the assumption that the circumstances explored are complex and dynamic and require flexibility both in the approach and methods used. Semi-structured, face-to-face interviews were used as the instrument or method of data collection. An interviewer guide was developed to direct the interview. Themes and key factors identified through the literature review provided input into the structure and content of the interviews. Three small and three large companies from the IT sector were interviewed as part of this study. The number of employees was used as the primary indicator of company size using the guidelines provided by the DTI. Research results indicated that the main motivations for engaging in strategic alliances included risk sharing, access to new markets, expanded product service offerings, complementary skills and learning, funding support and enhancing competitive positioning. The primary motivator that all respondents identified was 'collaborative bidding for business'. Forty-three percent of alliances of the small and large companies interviewed were with small companies. Small companies indicated a wider range of alliances and included partnering with micro enterprises to large multinationals in their alliance formations. Strategic alliances were monitored and measured by all respondents. Quantitative measures were used most frequently and included measures such as profitability, delivery to project deadlines, meeting service levels and delivery to baseline commitments made in the solutions submitted to clients. Qualitative measures were identified but applied in a less structured way. Challenges identified by small and large companies included achieving an understanding of the culture and needs of small and large companies, managing the financial challenges, relationship management and dealing with co-opetition where competitors are incorporated into the strategic alliance. Respondents all indicated that the value of strategic alliances outweigh the cost of establishing and managing strategic alliances particularly between small and large companies. The success factors identified were largely similar between small and large companies. The highest ranked factors identified by small companies were partner selection and benefit analysis whereas leadership and strategy were the main priority factors for large companies. It is recommended that further research be conducted into measuring and monitoring methods that assists in monitoring the effectiveness of alliances and to develop the capacity of strategic alliance managers in managing the complex of relationships between alliance members, alliance delivery performance and client demands and influences on the strategic alliance. / AFRIKAANSE OPSOMMING: Klein en groot maatskappye gebruik toenemend samewerkingstrategiee soos strategiese alliansies om 'n kompeterende voorsprong te verkry in 'n vinnig veranderende globale en plaaslike besigheidsomgewing. Maatskappye besef die waarde daarvan om hulle besigheidsdoelwitte te bereik deur wedersydse voordelige strategiese alliansies. Strategiese alliansies verskaf 'n buigsamer, nie-permanente metode, deur middel van samewerking tussen maatskappye, waarmee bykomende dienste, vaardighede, produkte en hulpbronne verkry kan word. Hierdie studie beoog om by te dra tot die begrip van die aard van strategiese alliansies tussen groot en klein maatskappye in die Informasie Tegnologiesektor (IT-sektor) in Suid-Afrika en om die spesifieke dinamika, uitdagings en suksesfaktore vanuit die perspektief van hierdie maatskappye te belig. Die navorsingsvraag is: "Wat is die suksesfaktore wat 'n impak het op die volhoubaarheid van strategiese alliansies tussen groot en klein maatskappye in die IT-bedryf in Suid-Afrika?" In hierdie studie word 'n strategiese alliansie gedefinieer as 'n "samewerkingsooreenkoms tussen twee of meer plaaslike en / of globale maatskappye wat bele in 'n samewerkingspoging om hulle individuele en gesamentlike doelwitte te bereik en wat 'n positiewe uitwerking het op hulle kompeterende posisionering." Beperkte navorsing is al gedoen oor strategiese alliansies in Suid-Afrika in die algemeen en geen navorsing was beskikbaar oor die IT-bedryf nie. Hierdie ondersoekende navorsingstudie is gedoen om 'n verkennende oorsig te verskaf van die dinamika en kwessies verwant aan strategiese alliansies, spesifiek binne die konteks van onderskeidelik klein en groot maatskappye. Hierdie studie dra by tot 'n begrip van die onderskeie bydraes van klein en groot maatskappye in soverre hulle onderskeie sterk punte en ervarings mekaar komplementeer om besigheidsdoelwitte te bereik. Die navorsingsveld ondersteun ook die regering se beleid en inisiatiewe om samewerking tussen groot en klein maatskappye te bevorder en daardeur die ekonomie, spesifiek die kleinsakesektor, te ontwikkel. Binne 'n dinamiese en snelgroeiende Informasie- en Kommunikasiesektor (IKT-sektor), is daar toenemend geleenthede vir strategiese alliansies tussen klein en groot maatskappye binne die IT-subsektor. 'n Kwalitatiewe, inleidende navorsingsbenadering is gebruik om die tipe alliansies wat bestaan te bepaal, die geidentifiseerde temas uit 'n literatuurstudie, toegespits op die Suid-Afrikaanse situasie, te toets en nuwe insigte, gebaseer op die ervarings van die respondente in strategiese alliansieverhoudings, te identifiseer. Hierdie benadering het die aanname bevestig dat die omstandighede wat ondersoek is, kompleks en dinamies is, en buigsaamheid in beide die benadering en metodiek, vereis. Gedeeltelik gestruktureerde, persoonlike onderhoude is gebruik as die navorsingsinstrument of -metode van dataversameling. 'n Vraelys is opgestel as riglyn vir die onderhoude. Die temas en kernfaktore, wat geidentifiseer is uit die literatuuroorsig, het insette vir die struktuur en inhoud van die onderhoude verskaf. Drie klein en drie groot maatskappye in die IT-bedryf is as deel van hierdie studie nagevors. Die getal werknemers is gebruik as die belangrikste bepaler van die maatskappy se grootte volgens die riglyne verskaf deur die Departement van Handel en Nywerheid (DHN). Die navorsingsresultate het aangedui dat die belangrikste beweegredes vir die sluit van strategiese alliansies die volgende is: gedeelde risiko's, toegang tot nuwe markte, uitgebreide produk- / diensaanbiedings, aanvullende vaardighede en opleiding, steun vir befondsing en die bevordering van kompeterende posisionering. Die belangrikste beweegrede wat alle respondente geidentifiseer het, was "gesamentlike tender vir besigheid" . Drie-en-veertig persent van die alliansies van die klein en groot maatskappye wat ondersoek is, was met klein maatskappye. Klein maatskappye het 'n wyer verskeidenheid van alliansies, insluitend vennootskappe van mikro-ondernemings tot groot multinasionale maatskappye, in hulle alliansievormings, ingesluit. Strategiese alliansies is deur alle respondente gemonitor en gemeet. Kwantitatiewe meetinstrumente is die meeste gebruik en het maatstawwe bevat soos winsgewendheid, lewering binne die projek se spertye, die nakom van diensvlakvereistes en die nakom van die aanvanklike ooreenkoms in die oplossings voorgehou aan die kliente. Kwalitatiewe meetinstrumente is ook geidentifiseer, maar minder gestruktureerd toegepas. Die volgende uitdagings is deur beide klein en groot maatskappye geidentifiseer: om'n begrip te vorm van die kultuur en behoeftes van klein en groot maatskappye, bestuur van die finansiele uitdagings, verhoudingsbestuur en die hantering van kooptering waar mededingers in die strategiese alliansie ingesluit is. Al die respondente het aangedui dat die waarde van strategiese alliansies die koste verbonde aan die sluit en bestuur van strategiese alliansies oortref, veral tussen klein en groot maatskappye. Die suksesfaktore wat geidentifiseer is, was hoofsaaklik dieselfde by klein en groot maatskappye. Die faktore wat die meeste waardeer is deur die klein maatskappye, was die keuse van vennote en voordele-analises, terwyl leierskap en strategie die twee hooffaktore vir die groot maatskappye was. Daar word aanbeveel dat verdere navorsing gedoen word oor meetinstrurnente en moniteringmetodes wat kan help om die effektiwiteit van alliansies te monitor. Die kapasiteit van strategiese alliansiebestuurders om die verskeidenheid van verhoudings tussen alliansielede, alliansie-diensleweringvermoens en klientvereistes en invloede op die strategiese alliansie, te bestuur, moet ook ontwikkel word.

This study discusses South Africa’s tax incentives for small businesses and identifies shortcomings and areas of concern within the tax incentive regimes. A comparison of small business tax incentives provided by Australia, India, and the United Kingdom is made with South Africa’s small business tax incentives to identify similarities and differences, and new lessons are learned from the approaches of other countries. As a result of the comparison with the tax dispensations available to small businesses in other countries, the study recommends additional tax incentives that could be implemented by South Africa. Only those tax incentives that are available in other countries but not in South Africa that were deemed worthwhile were recommended to be introduced in the Republic. Recommendations were also made based on the gaps identified in South Africa’s small business tax incentives. / College of Accounting Sciences / M. Phil. (Accounting Sciences)