SME

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Recommended: Importance of small and micro enterprises

How SMEs in South Africa can contribute to economic growth recovery and development
Empirical studies show that Small to Medium Enterprises (SMEs) play an incredibly vital role in all economies but most especially in those of developing nations like South Africa as they are primary source of employment, innovation, and the creation of new products. There is nothing small about SMEs as a whole, contributing approximately 50%, employing 60% of the labour force and 22-50% of the country’s Gross Domestic Product (GDP) it could be argued that SMEs are big drives of the South African economy and play an important role in taking South Africa from a third world country to a first world country. (Kim 2011:1). Even though it is clear to see from the statistics mentioned above SMEs are central to the economic development of South Africa, very little is known about them in terms of how they are defined, how they operate, why they are important, challenges facing them and what is government doing to support them.
What are Small to Medium Enterprises (SMEs), well this depends on the country which one is from, as the definition differs from one country to another. The reason behind the lack of consensus is that measures used to define size differ depending on the sector in question so in other words what might be small for one sector might not necessarily be for another sector. (Mahembe 2011:24).
Table 1
EU USA ASIA GHANA RUSSIA INDIA CHINA EYGPT RSA
Words of employer SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs SMEs
Micro < 10 0 < 5 < 5 0 0 0 1-4 < 20
Small < 50 <100 5-50 6-29 15-100 0 1-300 5-14 50-99
Medium < 250 <500 51-150 30-99 101-250 0 301-2000 15-49 100-200
Turnover
Micro $ 3m 0 RM250.000 $10 k 0
Small $13m 0 ...

... middle of paper ...

...uth Africa. The UCT Centre for Innovation and Entrepreneurship. Available online: http://www.gsb.uct.ac.za/files/GEM2011Report.pdf [Accessed 12 February 2014].
The Task Group of the Policy Board for Financial Services and Regulation. 2001.Smes’ Access to Finance in South Africa Report: A Supply-Side Regulatory Review. South Africa.

Blueprint Strategy & Policy (Pty) Ltd. 2005. Promotion of Small and Medium Enterprises in the South African Chemicals Sector. Chemicals Summit NEDLAC.

SBP (business environment specialists).Headline Report Of Sbp’s Sme Growth Index. 2013.
Easier, Harder For Small Business in South Africa. Saxonwold. Johannesburg.

Siko-Shosha, S. 2014, 28 January. Linda Olagunju on a mission to light up Africa. Young business leaders. Available online: http://www.ybl.co.za/linda-olagunju-on-a-mission-to-light-up-africa/ [Accessed 12 February 2014].

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