Water scarcity is becoming an ever-growing concern in South Africa, in part due to rapid urbanisation and population growth. In addition, over R70 billion per annum in additional investment in water infrastructure will be required nationally to address the scarcity. This will prove difficult in the context of a sluggish economic environment of low growth and high unemployment.
South Africa’s National Development Plan (2012) identifies small, medium and micro enterprises (SMMEs) as central to stimulating growth and employment, and could play an integral role in the provision of innovative solutions to the water-scarcity challenge.
The Innovation Hub Management Company’s Green Economy Unit engaged Genesis to identify potential opportunities that exist for SMMEs in the Gauteng city region to contribute to the growth of the South African economy by providing innovative solutions to the water-security challenge.
Through in-depth sectoral research and stakeholder engagements, opportunities were found in the provision of water-metering services and water-efficient devices to reduce the demand for water; wastewater reuse and treatment; and expanding the use of alternative water sources. Challenges identified included: difficulty in certifying and prototyping new technologies; a lack of institutional frameworks that incentivise water efficiency; and lack of funding and commercial experience.
In addition to identifying the opportunities and challenges for SMMEs, Genesis performed a market-sizing exercise to quantify the potential market for SMMEs in the public and private water and sanitation sector of the Gauteng city region. The size of the potential market for SMMEs was estimated to be R2.1 billion and R238 million for business opportunities in the public and private sector respectively.
Given the opportunities and challenges identified, Genesis made the following recommendations that would assist SMMEs to enter the water and sanitation market. From a municipal and public sector perspective, focus should be placed on: the development of an institutional framework to incentivise water efficiency; a standardisation of the certification process of new water-related technologies; and increased awareness of support systems for SMMEs. It was also found that SMMEs should form partnerships with more established firms to benefit from their experience when seeking to enter the market.
The report produced by Genesis will be disseminated for public consumption and comment by The Innovation Hub Management Company to facilitate further discussions and ensure this critically important issue receives the attention it deserves.