Research on the Performance of the Services Sector

March, 2012

Small Enterprise Development

Agency

Research on the Performance of the Services Sector


Contents

EXECUTIVE SUMMARY 6

Tourism Sector 33

Overview of the Tourism Sector 34

Defining Tourism 34

Tourism Trends 37

4.3. International Trends 37

Main Growth Areas 39

Key Problem Areas 39

Foreign Tourism Sector in South Africa 40

Source of Markets 40

International arrivals 43

Domestic Tourism 45

Domestic Tourism Trends 46

4.10.1. KwaZulu-Natal 46

4.10.2. Gauteng 46

4.10.3. Eastern Cape 46

4.10.4. Western Cape 47

4.10.5. Limpopo 47

4.10.6. North West 47

4.10.7. Mpumalanga 48

4.10.8. Free State 48

4.10.9. Northern Cape 48

The Policy and Strategy Framework for Developing Small and Medium Enterprises in the Tourism Sector 49

National Support Programmes, Policies and Strategies to support SMEs in the Tourism Sector 49

4.11.1. The Marketing Tourism Growth Strategy for South Africa 2011 – 2013 49

4.11.2. The Tourism Act 50

4.11.3. Accelerated and Shared Growth Initiative for South Africa (AsgiSA) 50

4.11.4. Industrial Policy Action Plan 2010/11-2012/13 (IPAP) 51

4.11.5. National tourism Department Medium Term Strategic Plan 2010/11-2014/15 52

4.12. National Support/Development Programmes 53

4.12.1. Tourism Support Programme (TSP) 54

4.12.2. Tourism Learnership Project (TLP) 54

4.12.3. Poverty Relief Programme 54

4.12.4. Development Bank of South Africa 54

4.12.5. Industrial Development Corporation Tourism Business Unit 55

4.13. Provincial Policy Overview 55

4.13.1. Western Cape 55

4.13.2. KwaZulu-Natal 57

4.13.3. Gauteng 59

4.13.4. Eastern Cape 60

4.13.5. Free State 62

4.13.6. Limpopo 63

4.13.7. Mpumalanga 64

4.13.8. North West Province 65

4.13.9. Northern Cape 66

4.14. Identification of high potential subsectors 67

4.15. Job creation potential 67

4.17. Value Chains or opportunities 71

4.18. Challenges/Barriers 76

ICT Sector 76

OVERVIEW OF THE ICT SECTOR 76

Defining ICT 77

ICT Trends 77

International Trends 77

Main Growth Areas 78

Key Problem Areas 79

National Trends 79

The Policy and Strategy Framework for Developing Small and Medium Enterprises in the ICT Sector 81

National Support Programmes, Policies and Strategies to support SMEs in the ICT Sector 81

5.9. Development and Support Programmes on a National Level 83

5.10. Provincial Governments 84

5.10.1. Western Cape 84

Eastern Cape 85

5.10.3. Limpopo 87

Northern Cape 88

KwaZulu-Natal 89

5.10.6. Free State 89

Gauteng 90

5.10.8. Mpumalanga 91

North West 92

Identification of high potential subsectors 92

Job creation potential 94

Role players or key stakeholders 96

5.13.1. South African Government 96

5.13.2. International Software Companies 97

Established Corporate 97

SMMEs 97

Public/Private Sector Partnerships 97

Provincial Role players and Stakeholders 98

Blue IQ 98

The Innovation Hub 98

SAVANT 98

Cape IT Initiative 99

Internet Service Providers Association (ISPA) 99

Information Technology Association (ITA) 99

Information Industry South Africa (IISA) 99

Bandwidth Barn 99

Innovation Fund 99

5.14.10. ISETT 100

5.15. Value Chains 100

Challenges/Barriers 103

TOurism Sector 106

Demographic Profile of Businesses 106

Challenges, Obstacles and Opportunities 111

6.3. SEDA Support 116

ICT Sector 118

Demographic Profile of Businesses 118

7.2. Challenges, Obstacles and Opportunities 122

Seda Support 127

Recommendations 129

CONCLUDING REMARKS 138

LIST OF REFERENCES 139

Internet Sources 140

Annexure A 142

List of Figures

List of Tables

Table 1: Type of Company and Services Offered

Table 2: Turnover Bands and Number of Employees

Table 3: Employment type per business category

Table 4: Challenges faced by business

Table 5: Interventions

Table 6: Opportunities

Table 7: Type of Company

Table 8: Annual turnover and employment

Table 9: Number of Employees

Table 10: Challenges faced by business

Table 11: Interventions

Table 12: Opportunities

Table 3: Outbound Tourism Expenditure

Table 14: Top Ten Countries for International Arrivals in 2010

Table 15: International tourist arrivals and departures

Table 16: Number of employers and employees per sub-sector

Table 17: Tourism Opportunities per Province

Table 18: Breakdown of jobs

Table 19: ICT Opportunities per Province

Table 20: Position of representatives

Table 21: Type of Company and Services Offered

Table 22: Employment type per business category

Table 23: Turnover Bands and Number of Employees

Table 24: Opportunities per Province

Table 25: Efficiency of Seda Programmes

Table 26: Number of Employees

Report Outline

This report is structured in three phases namely:

1. 
   Executive Summary: which provides an overview of the report’s essential information covering the scope of the study, methodology used, key findings and other key issues raised during the study. It also provides the conclusions and recommendations.
   
2. 
   Desktop research Findings: This part of the report provides findings on the extensive desktop review research conducted in this sector and analysis thereof.
   
3. 
   Fieldwork Findings: This section mainly presents the clients feedback which comprised of SMEs and other stakeholders interviewed during the surveys.
   

The information in these sections formed the basis for findings analysis and data interpretation, from which key findings were derived and conclusions made. Specific recommendations and concluding remarks are included at the end of the report.