The Role of Basic Business Skills Development and Their Influence on South African Small, Medium and Micro Enterprise Sustainability

Juan-Pierré Bruwer,Judith Smith

doi:10.22610/jebs.v10i2.2216

Abstract

South African Small, Medium and Micro Enterprises (SMMEs) have received vast amounts of attention from both government and scholars over the years, mainly due to the socio-economic value they add to the national economy. Notwithstanding the importance of these business entities to the South African economy, prior research suggests that South African SMMEs have one of the worst sustainability rates in the world; mainly attributable to the influence of unmanaged economic factors. Included in these economic factors is the matter of a scarcity of skills, particularly that of basic business skills. Though limited research has been conducted on the individual business skills which require development in South African SMMEs the perception was formulated that the development of basic business skills in these business entities may have a positive influence on their attainment of key businesses objectives in the foreseeable future. As such, empirical research was performed which fell within the positivistic research paradigm; data were gleaned from South African SMME management through means of a questionnaire. Stemming from the results, it was found that although there is a dire need for the development of basic business skills in South African SMMEs. It can be argued that some basic business skills were more important to develop than others as only a few had a positive influence on the attainment of business objectives.

Highlights

In 1996 South African Small, Medium and Micro Enterprises (SMMEs) were first formally recognised by the South African government as drivers of the national economy (Bruwer, 2016)
The inference can be made that the average sampled SMME was a non-franchised micro enterprise sole trader which have been in existence for between 1 and 5 years, while employing between 1 and 5 employees at a given time, while operating in the FMCG industry within the Cape Metropole
No previous study has been conducted on the individual basic business skills which need development in South African SMMEs, this study was conducted with the main intent to explore the latter phenomena

Summary

Introduction

In 1996 South African Small, Medium and Micro Enterprises (SMMEs) were first formally recognised by the South African government as drivers of the national economy (Bruwer, 2016). According to legislation1these business entities have the responsibility to attain three main socio-economic objectives They pertain to the decreasing of national unemployment through job-creation, the diminishing of national poverty through wealth-dissemination, and the boosting of the national economy through adding value to the national Gross Domestic Product (GDP) (South Africa, 1996).Despite the fact that South African SMMEs make up approximately 90% of all business entities operating in the country (Mouloungui, 2012), while simultaneously contributing up to 57% to the national GDP (Naidoo & Urban, 2010;Thabethe, 2013), national unemployment and national poverty have not improved over the past two decades since the formal recognition of SMMEs by national government (Biyase, 2009;Cant &Wiid, 2013;Moloi, 2013).The foregoing is placed in perspective when taking into account that more than 50% of South Africans live in poverty; making ends meet on ±R25.00 per day / ±R779.00 per month (Cole, 2015;Grant, 2015). Taking into account the three socio-economic objectives which South African SMMEs are responsible to achieve, it is fair to assume that the sustainability of these business entities is very weak

Methods

Results

Conclusion