NEVA MAKGETLA: Slow-growing small businesses need a shot in the arm
A recent Tips review of the state of small business points to a paradox. The state and private sector have published many initiatives to boost small business, but there are still fewer formal small businesses now than in 2008 just before the global financial crisis, and small business job creation is slow compared with the rest of the economy. According to official labour force surveys, in 2016, SA had 690,000 formal small businesses — about 20,000 fewer than in 2008. From 2008 to 2010, 80,000 small enterprises — more than one in 10 — disappeared, while about 60,000 new ones emerged in the next four years. The informal sector lost 3% of its 1.2-million businesses from 2008 to 2010, but then gained 11%. Most informal enterprise is survivalist, generating low and precarious incomes and few waged jobs. The median informal entrepreneur in 2015 earned R4,000 a month, compared with R10,000 for formal business owners. Slow growth in small business is worrying because the sector is the larg...
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