July 22, 2015
Comments Off on SME sustainability and growth should be an obsession for job creation in South Africa
Contrary to global trends where small and medium enterprises (SMEs) constitute the largest employer in either developed or developing economies, smaller firms in South Africa are showing stagnation in both turnover and employment growth. Both these measurements are important – turnover has a strong bearing on the wealth being created in the economy, while employment is vitally important for South Africa’s social stability.
These worrying trends are the latest in the findings from the SME Growth Index. Conducted by business environment specialists SBP, the SME Growth Index is geared towards establishing a solid evidence-based understanding of SMEs in South Africa.
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November 27, 2014
Comments Off on A country at the crossroad towards better regulatory governance in South Africa
South Africa is sitting at an economic crossroad. The National Development Plan proposes many measures to accelerate economic growth and deal with the country’s rising social problems. The majority of these are based on the assumption of a reasonably healthy economy.
There is a problem however. Since the introduction – and acceptance of the NDP as South Africa’s new economic blueprint – the country’s growth rate is hovering at 1.4%. That’s far below the minimum 5.4% that the NDP calls for over the next fifteen years. Unemployment has risen to its highest levels, 25.6% under the strict definition and, according to Statistics SA, 16 million people are expected to draw social benefits over the next year at a cost of 60% of government spending. South Africa needs an economic ecosystem that is designed to support market-driven inclusive growth, provide quality jobs, rapid skills development, innovation, increased productive output and better means to compete in a global economy.
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November 7, 2014
Comments Off on Examining the challenges facing small businesses in South Africa
The National Development Plan (NDP) sets out several ambitious goals for the small to medium enterprise (SME) sector – including a target for 90% of employment opportunities to be created by this sector by 2030. The NDP envisions the South African economy growing by at least 5.4% growth per year over the next 15 years, to treble in size – and identifies the SME sector as a pivotal player in driving this growth. Yet despite government’s commitment to growing and supporting the country’s SMEs, these firms continue to face an extremely hostile business environment, including lack of skilled staff, burdensome regulations, tough local economic conditions, lack of finance and the high costs associated with employing staff.
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February 19, 2014
Comments Off on SME Growth Index Headline Report for 2013: Growth and Competitiveness for Small Business in South Africa
The SME Growth Index is a multi-year research project geared towards establishing a solid, evidence-based understanding of South Africa’s small and medium enterprises.
It is the largest, most comprehensive study of the sector ever undertaken in South Africa, and one of a few of its kind worldwide. The research is based on an annual survey that tracks the experiences of a panel of 500 established small firms in the manufacturing, business services and tourism sectors.
The latest findings of the SME Growth Index featured in the Headline Report 2013 pays particular attention to the factors impacting on firm growth and links these findings to an assessment of South Africa’s competitiveness.
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November 27, 2013
Comments Off on Understanding Women Entrepreneurs in South Africa
Drawing from data collected for SBP’s SME Growth Index – an annual study of established small and medium sized firms – along with an extensive reading of the available comparative international research on women’s entrepreneurship, this recently published Issue Alert offers a unique overview of women entrepreneurs in South Africa’s formal sector: the characteristics of their firms, their motivations for entering business, their growth orientations. It also interrogates the extent to which women entrepreneurs are different from their male counterparts and whether they face unique, gendered barriers.
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July 17, 2013
Comments Off on Developing a New Path for SMEs in South Africa; Reassessing for Growth.
Compiled by drawing on the extensive storehouse of data collated in the first two annual rounds of the multi-year SME Growth Index, the Alert features new information on important issues including, amongst others, the growth trends of South Africa’s SME community; the contribution of SMEs to job creation, and their roles as importers and exporters to the country’s economy. The Alert makes an appeal not just for the recognition of the numerous challenges and opportunities that it discusses, but also calls for a decisive, sustained shift to action in addressing them with a view to achieving the wealth and employment creation that the National Development Plan has prioritised.
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February 21, 2013
Comments Off on SME Growth Index 2012 Headline Report. Easier/Harder for Small Business in South Africa?
South Africa’s SME community faces a tough hostile environment, despite regular declarations of its importance to the country. The second round of the SME Growth Index – the most comprehensive gathering of firm-level data yet undertaken in South Africa – finds that around one third of firms report a threat to their very existence, and large majorities believe it is becoming more difficult to do business. It analyses the critical issue of whether firms are in fact growing in the current environment, and the related question – central to national concerns – of whether they are taking on new employees. It also examines the aspirations of SME operators. The results are intriguing and often sobering, but provide a detailed picture of an enormously valuable resource that should not, and need not, be wasted.
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August 28, 2012
Comments Off on Current State of legislation in South Africa
A regulatory system has to be understood from the point of view of what it hopes to accomplish. Regulation without intention is meaningless, and cannot be described as anything but a deadweight on society. Economic regulation is of course a multifaceted concept, and different contexts will demand different interventions.
In May this year, the speaker of the National Assembly, Max Sisulu, chided its members for the poor quality of legislation that it was approving. Such measures would be returned for correction, either by the National Council of Provinces or after having been found in court to be unconstitutional. Rightly, he reminded the Assembly’s members that they had an obligation to ensure that the legislation processed was both in line with the country’s constitution, and processed with an appropriately diligent and professional understanding of the matters at stake. Failure to do so, he suggested, would compromise the country’s most vulnerable.
Business regulation, and small business regulation in particular, suffers from a case of ambiguous motivation. In some cases, it is not clear what considerations lie behind substantive measures. Why would they be desirable or necessary?
Measures under consideration illustrate this point well. A strong feature of the draft Business Registration Bill was to be the formalization of unregistered and informal enterprises. At first glance, this seems understandable – why should anyone object to bringing businesses operating semi-illegally into the legislative net, not least regarding tax obligations? But the bill demands more……..
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May 22, 2012
Comments Off on SME Manufacturing in South Africa, Growth Concerns
The Manufacturing Circle released their Manufacturing Bulletin for the first quarter of the year showing the latest trends in South Africa’s manufacturing sector. The Bulletin features the recent results of an ongoing survey compiled by economist Dr Iraj Abedian, and a prominent article by SBP on the findings of the 2011 SME Growth Index relating specifically to the concerns and challenges of small domestic manufacturing firms.
The Bulletin, published quarterly by the Manufacturing Circle, aims to serve as the voice for manufacturing firms in South Africa. The first quarter Bulletin is available here …
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March 12, 2012
Comments Off on Labour Regulations and SME’s in South Africa
We have noticed an increase of web search traffic on our site relating to labour laws and their affect on SMEs. If you wish to know more on this topic, you may view the Regulatory Impact Assessment (RIA) report that was conducted in 2010 on selected provisions of the recently proposed Labour Amendment Bills. SBP was integral to the development of the RIA report, which is freely available for download at www.labour.gov.za or you can download it here.FINAL_RIA_PAPER_13Sept2010-1