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FAILING OR NOT AIMING TO GROW? MANUFACTURING SMMEs AND THEIR CONTRIBUTION TO EMPLOYMENT GROWTH IN SOUTH AFRICA ANNA KESPER South Africa's recent integration into the world economy provokes the question about its potential for building competitive advantage and pros- perity at the local level in the context of an increasingly globalised economy. The experience of prospering localities in industrialised countries, in par- ticular Western Europe and Japan, suggests that the small and medium- sized enterprise (SME) sector is at the forefront of local economic development. SMEs are reported to resolve the persistent problems of in- sufficient employment growth while being highly efficient in flexibly serv- ing increasingly segmented consumer markets. The small firm discussion has been taken up in South Africa, where small, medium and micro enterprises (SMMEs) hold a numeric majority. SMMEs are expected to function as a driving force in both the social and economic transition of South Africa if supported by supply-side measures targeting enterprise constraints. Research on South African SMMEs reveals, how- ever, a mismatch between the reality and the model of the SMME sector used by South African policy makers. The South African SMME sector is far from homogenous and would require a fine-tuned
Urban Forum – Springer Journals
Published: Jul 21, 2001
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