Nov 22, 2011
Labour laws, BEE hamper small businessBack
"Major regulatory barriers identified by the index are inflexible labour laws, broad-based black economic empowerment (BBBEE) and Sars [SA Revenue Service] inefficiencies," said Chris Darroll, CEO of SBP, the research company which compiled the index.
However, this could be seen as positive as these barriers were influenced by government policy, which could be reformed.
"South Africa is squandering a critical economic asset and source of job creation by failing to create an environment for the small and medium enterprise sector to flourish," Darroll said in a statement.
"But the good news is that this can be remedied."
The 2011 SME Growth Index is the first annual study produced by SBP.
It surveyed 500 small and medium enterprises (SMEs) and would initially track their performance for the next three years.
The firms chosen survived the first two years of operation, employed between 10 and 50 employees, and operated in sectors that the government had prioritised for growth -- manufacturing, business services and tourism.
Respondents said inflexible labour legislation constrained their growth.
"SMEs also express anxiety about increased inflexibility if proposed amendments to labour legislation materialise."
Less than half the firms on the panel had grown their staff numbers over the past five years, while less than a third had created new positions in 2011.
"South Africa's SMEs are simply not growing at the pace needed for large-scale wealth and job creation."
Darroll said the economic climate was given as the main reason for the lack of job creation.
Respondents were also unhappy about BBBEE requirements.
"Widespread dissatisfaction among all the firms, including black-owned businesses, is very evident, despite some 57% having accreditation," said Darroll.
"Accreditation comes with annual costs, is administratively burdensome, and is not balanced by enhanced access to procurement opportunities."
Half of respondents planned to grow in the short term.
"SMEs in the business services sector in particular are confident of growth, but manufacturers and tourism firms are less so.
"Just over half of business services firms envisage expanding staff numbers, as do 35 percent of manufacturers and a fifth of tourism firms," she said.
Darroll said older firms tended to employ more people.
"This is in contrast to government's emphasis on supporting start-ups."
Small businesses contribute more than half of South Africa's gross domestic product and make up 77% of non-government jobs, she said.
Edited by: Sapa
To subscribe email email@example.com or click here
To advertise email firstname.lastname@example.org or click here
Other Economy News
Updated 4 hours ago Less than one percent of staff stayed away from work on the first day of a strike by members of the Communication Workers Union (CWU), the SA Post Office said on Thursday. CEO Mark Barnes said it was “business as usual” as the first day of the strike had had a...
Updated 5 hours ago Global air freight volumes saw a 2% year-on-year drop in March, reflecting subdued growth in world trade, according to demand growth data released by the International Air Transport Association (Iata). This decline was exaggerated by the quarter’s comparison with a...
Updated 2 hours 56 minutes ago The JSE-listed Emira Property Fund has invested over R250-million in acquiring new centres and upgrading its shopping centres to strengthen its retail assets, according to Emira CEO Geoff Jennett, who stated on Thursday that the company was investing strategically....
Updated 3 hours ago JSE-listed Equites Property Fund achieved an 18.3% year-on-year increase in distributions to 96.6c a share for the year ended February 29. “The distribution growth reflects the strong property fundamentals of the Equites logistics portfolio,” Equites CEO Andrea...
Updated 3 hours ago It takes a coherent company to successfully and sustainably close the gap between strategy and execution in Africa, and one of the key factors in doing so is unconventional leadership, which is needed to foster the behavior required of coherent companies, according...
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...