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Seda represents "a change of the model, as opposed to a change of management because of a vote of no confidence", said DTI deputy director-general Lionel October.
The new agency was launched in response to the lessons learnt from the DTI's 10-year review of small business support in South Africa, October told reporters in Johannesburg.
Seda will incorporate the Ntsika Enterprise Promotion Agency and the National Manufacturing Advisory Centres (Namac).
Ntsika was established to provide indirect support to small businesses under the National Small Business Act.
In response to pressure to provide more hands-on support to entrepreneurs, Ntsika set up Namac.
This agency established offices in the majority of urban centres in nine provinces to assist small business owners.
However, entrepreneurs expected more direct support from government than provided by the two agencies.
"It is necessary for government to play a more direct and active role, namely as a retail model.
"Government will be actively involved from the local to the provincial to the national level," October said.
"Given South Africa's requirements we need very strong intervention to link the first world economy with the third world economy, unlike developed countries where it is easier to leave it to the private sector," he said.
Seda planned to use the existing structures set up by Namac and Ntsika, but would expand beyond the major urban centres to include rural areas and all nine provinces.
"We need a bigger footprint," October said.
Seda aims to integrate all government's dealings with small business.
"We are trying to create one agency to act seamlessly from national to local level."
Seda offices will offer a wide variety of non-financial support to entrepreneurs.
Bheki Sibiya was appointed chairperson of Seda and Wawa Damane will take up the reins as chief executive officer in January.
Other agencies, such as Khula Finance and the Community Public Private Partnership Programme, may be incorporated into Seda in the future.
