SMEs drivers of job cre­ation

Big role to play in eco­nomic growth

Cape Argus - - BUSINESS - Joseph Booy­sen

SOUTH Africa’s SME (small and medium en­ter­prises) sec­tor could em­ploy an ex­tra 1 mil­lion peo­ple if ev­ery small busi­ness in the coun­try cre­ated one job a year, said AHI pres­i­dent Bernard Swanepoel yes­ter­day. How­ever, for ev­ery SME that leaves the coun­try about 15 jobs were lost.

Swanepoel was speak­ing at the AHI SME Ind­aba, adding it was well recog­nised that the coun­tries which suc­ceeded in pulling them­selves out of the “dwang” af­ter a down­grade had one thing in com­mon, they all had strong SME sec­tors.

“If ours isn’t strong then our way out of the down­grade is not a sim­ple one.”

Swanepoel said the so­lu­tion was eco­nomic growth and the way to cre­ate jobs was not only to give peo­ple jobs at the side of the road.

He said the coun­try’s en­tre­pre­neur­ial im­pact was one of the low­est in the world.

“We be­lieve that this down­grade and re­ces­sion will hit the poor­est and the small­est the hard­est.”

He said SMEs were con­sid­ered the drivers of in­clu­sive growth and job cre­ation.

“But we don’t know, sta­tis­tics are poor, it doesn’t ex­ist. There is de­bate whether SMEs are con­tribut­ing or not, the es­ti­mate for SMEs ranges be­tween 1 mil­lion and 6 mil­lion. Any­body with any sci­en­tific back­ground will tell you that that’s a guess, it is not even an es­ti­mate, so we don’t know.”

Swanepoel said the gross do­mes­tic prod­uct con­tri­bu­tion, ac­cord­ing to the De­part­ment of Small Busi­ness was be­tween 30% and 57%.

“What there is con­sen­sus about is that it is de­clin­ing. Pro­fes­sor Neil Rankin, who is on the board of the Small Busi­ness Project, did some re­search that showed com­pa­nies with 50 or fewer em­ploy­ees could ac­count for less than half of the em­ploy­ment share than is com­monly be­lieved.

“It may be a topic we don’t want to re­search be­cause we may not like the an­swer, but we will change that and we will get to fac­tual-based de­ci­sion-mak­ing in this way.”

He said us­ing data from the SA Rev­enue Ser­vice, Rankin found that those com­pa­nies (with 50 or less em­ploy­ees) con­trib­uted about 21% of South Africa’s for­mal sec­tor jobs.

“We don’t re­ally want to send a mes­sage of doom and gloom but we need to ac­knowl­edge that the SME sec­tor in South Africa is ac­tu­ally, hope­fully, not ter­mi­nally ill but se­ri­ously ill.

“So if ev­ery SME cre­ated one job this year, which is a chal­lenge we put out to our mem­bers through our cham­bers, this sec­tor alone could con­ser­va­tively still em­ploy one mil­lion ex­tra peo­ple. We clearly have a huge and sig­nif­i­cant role to play.” –

DO YOUR BIT: Bernard Swanepoel said if each small and medium en­ter­prise cre­ated one job, an ex­tra 1 mil­lion peo­ple could be em­ployed.

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