Abstract
Unemployment is one of the pressing issues that attract more attention in South Africa at the moment, with over 25% of the population jobless and the number increases to 40% when including the people who have totally given up the search for work. The South African government has continuously highlighted that the SME sector will be the key to increasing job creation in the country. However, there is evidence that the sector is characterized by high failure rates and low success, growth and survival rates. It is therefore vital to develop a new and fresh perspective in addressing the challenges facing the sector and establish policies to foster job creation in the SME sector. Evidence from around the world show that the SME sector is always characterized by a small subset of high growth, high quality firms that account for the bulk of job creation in the sector. This paper provides a review on the literature of some key characteristics of the small subset of SMEs with high job creation potential, and further appraises the potential of fostering these actors in the South African SME sector. The paper culminates with some policy measures for enhancing high growth SMEs in South Africa as a means to address the job creation saga. Key words: Unemployment, job creation, small and medium enterprises (SMEs).
Highlights
One of the most important characteristics of a flourishing and growing economy is a booming small and medium enterprises (SMEs) sector
This review aims at documenting the perspective that it is time for the South African government to lay more emphasis on the 6% SMEs that significantly contribute to employment growth and find strategies to transform the typical start-ups to high growth SMEs with significant job creation potential
While many studies (OECD, 2002; BERR, 2008; LópezGarcía and Puente, 2009; Vivarelli, 2004; Stam and Schutjens 2005) have established that high-growth firms contribute more to economic development than typical start-ups in general, South Africa still experiences problems of low levels of entrepreneurial activity, high SME failure rates coupled with high unemployment rates
Summary
Will promoting more typical SME start-ups increase job creation in South Africa?. The South African government has continuously highlighted that the SME sector will be the key to increasing job creation in the country. Evidence from around the world show that the SME sector is always characterized by a small subset of high growth, high quality firms that account for the bulk of job creation in the sector. This paper provides a review on the literature of some key characteristics of the small subset of SMEs with high job creation potential, and further appraises the potential of fostering these actors in the South African SME sector. The paper culminates with some policy measures for enhancing high growth SMEs in South Africa as a means to address the job creation saga
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
