03 Mar Small Business – An important contributor
Small Business is being recognized as a key player in South Africa’s future growth. SMMEs or Small, medium and Micro Enterprises are contributing to roughly 40% of the GDP and this is an important factor that needs to be acknowledged as a contributor to much needed employment.
Worldwide statistics suggest that as much as 80% of new jobs globally are being created by SMMEs and more than 1.5 million self-employed people form part of the local SMME sector. With challenges facing the country such as poverty, unemployment and inequality, small business has the potential to contribute to Governments plans of creating much needed jobs. Government understands the need for a thriving SMME sector to create jobs and contribute to economic growth. South Africa’s National Development Plan envisions that by 2030, roughly 90% of jobs will be created in small and expanding companies.
Small businesses are vital to offer large-scale job creation in South Africa, however conditions for small business have been challenging. Factors such as economic conditions, red tape, lack of skills, labour costs, fuel costs and lack of finance has reportedly hindered the growth of these businesses.
Government has urged South Africans to work together to help grow small and large business that will stimulate a dynamic and competitive enterprise. It has allocated a budget of R6.5bn over a period of 3 years aimed at supporting SMMEs.
Many small businesses face a tough environment in 2014 and hard and smart work will be needed to ensure long-term sustainability and continual contribution to the South African economy.