Research shows that in the Organisation for Economic Cooperation and Development area, SMMEs represent almost the totality of the business population, accounting for about 70% of employment and generate between 50% and 60% of the value added to the economy.
Worryingly, 56% of jobs in South Africa are created by the 1 000 largest companies and government. This contrasts sharply with the contribution of SMMEs in OECD countries and elsewhere on the continent. A key feature of small businesses is that they contribute to inclusion by serving locations, populations and markets that do not have enough scale to attract larger firms, thus creating new demands and markets.
The SMMEs can be integrated into the global and value chains in different ways. For example, as exporters or/and suppliers to large firms that export. Stronger participation by SMMEs in global markets creates opportunities to scale up and enhance productivity, accelerate innovation, facilitate technology spill overs and managerial know-how, broaden and deepen the skill-set.
Many companies view enterprise development or supplier development as a compliance issue and this attitude therefore limits the transformational potential of these programmes.