Examining the Function and Contribution of Entrepreneurship through Small and Medium Enterprises as Drivers of Local Economic Growth in South Africa

Abstract

The function and contribution of small and medium-sized firms in ensuring local economic growth are explored in this study. Previous studies show that small and medium-sized businesses (SMEs) have many different definitions and metrics. It was indicated that employment is the most popular metric for measuring company size in many different nations in terms of job creation through Small and medium-sized businesses and entrepreneurship. Although many nations, notably those in the European Union, adopt a lower cut-off point of 250 people, SMEs are typically classified as businesses with less than 500 employees. The goal of the research was to develop a better knowledge of the elements influencing the success of SMEs in South Africa. The study interrogates the question of what role entrepreneurship plays in inspiring the local economic growth of a country. Findings show that entrepreneurs and SMEs are key drivers of local development. The research calls for government investment in SMEs to help them overcome the problems they confront. The study indicated that the contribution and function of SMEs in local government is to stabilize the economy, especially in local communities with the perspective of empowering individuals. The study recommends that the government invest in SMEs to help them deal with socioeconomic issues including unemployment and poverty based on the obstacles encountered by SMEs.