A new South African report released by The Small Business Institute (SBI) claims that the country only has a quarter of a million formal small, medium and micro-sized enterprises (SMMEs) operating within the country.  This report is in stark contract with previous reports from other organizations citing the number to be around ” 5.6 million – of which 3.3-million were ‘survivalist businesses, 1.7 million micro-enterprises and 554,000 small enterprises.”

In addition, despite 98.5% of the country’s economy being made up of small and mid sized businesses (SMEs), the combination of both types only produce 28% of the nation’s jobs.  “According to SBI’s report, as many as 56% of jobs in South Africa are created by the 1,000 largest employers, including the government.”

These numbers are troubling and could hamper South Africa’s National Development Plan goals, one of which was to see small businesses create 90% of jobs by 2030.  The reason for this target is to match current Organisation for Economic Co-operation and Development (OECD) countries which can have “over 95% of enterprises are SME’s, accounting for between 60%-70% of the working population and contribute as much as 60% to GDP.”  These countries include Canada, France, Germany, Japan, South Korea, and the United States.

The movement to support small businesses will continue to evolve in particular when it comes to definitions.  Research has found that the “government has failed to apply a common definition of a small, very small, or medium business across its laws, regulations and key strategies. The definition of small enterprises was completely inconsistent across the 70 laws, regulations and key government strategies it reviewed.”

Another alarming fact, but one that must be mended to help South Africa grow into 2030.

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