SMEs drivers of job creation
Big role to play in economic growth
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.