POLICY AND REGULATIONs
SA ‘completely out of step’ with global SME growth trends
SA is a "complete outlier" internationally when it comes to employment creation by small and medium-sized enterprises, raising questions about possible policy and regulatory failure. Initial findings of a new study by the Small Business Institute (SBI) and the Small Business Project (SBP), released on Tuesday, found SA has only 250,000 formal SMEs, less than previous estimates of between 2-million and 6-million. "The situation is dire," Bernard Swanepoel, president of the SBI, said at the launch. "SMEs face extinction if we’re not careful," he added. While formal SMEs — defined as businesses employing fewer than 200 employees — account for 98.5% of the economy, they only employ 28% of the formal workforce. This is significantly lower than employment rates internationally.
In the Organisation for Economic Co-operation and Development countries, over 95% of businesses are SMEs, employing between 60% and 70% of the working population and contributing up to 60% to GDP, said Chris ...