Time to rethink how best to help SME owners in SA
Given the vital role of SMEs for job creation in developing and transitional countries, understanding the drivers of their growth is an important research challenge
Poverty remains one of the key global challenges. Entrepreneurship has been widely acknowledged as an important driver for economic growth and poverty alleviation. As traditional employment in big companies wilts, small companies and start-ups are becoming more important. This means headcount growth will mainly come from small scale and medium enterprises (SMEs). Experts predict that 70%-80% of jobs created in the private sector will come from these two groups. SA has a high unemployment rate and is suffering from poor economic growth. Only about 1% of microenterprises that have started with less than five employees have grown to employ 10 people or more. A negative consequence of this fact is that these businesses are not helping solve the unemployment issue, and hardly contribute to the taxation base of the economy. Given the vital role of SMEs for job creation in developing and transitional countries, understanding the drivers of their growth is an important research challenge. A...
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