How's business? Manufacturing small, medium and micro enterprises (SMMEs') contributions to the formal sector employment in Gauteng and the Western Cape between 2007 AND 2013

[摘要] ENGLISH ABSTRACT: Job creation through support to Small, Medium and Micro Enterprises (SMMEs) is one of the government's priorities in the National Development Plan 2030 (NDP 2030) to overcome the chronic unemployment situation faced by millions of South Africans. According to Gibrat's Law businesses have the same potential for growth regardless of their initial size. Jovanovic's Passive Learning Model extends Gibrat's Law by including age into the calculation – businesses learn through experience which determines if it will survive or not. This article uses the panel data from 2007 to 2013 from the Quarterly Employment Statistics (QES) from Statistics South Africa (Stats SA) to calculate Ordinary Least Squares regression models to test Gibrat's Law and Jovanovic's Passive Learning Model to determine if formal manufacturing SMMEs in Gauteng and the Western Cape experience more business growth in terms of employment and turnover than larger formal manufacturing businesses. Results indicate that Gibrat's Law and Jovanovic's Passive Learning Model were both rejected with regards to employment, indicating that Small, medium, micro enterprises (SMMEs) grow faster than larger businesses. Conversely, both models were accepted in terms of turnover; the experiences gained by businesses operating in the market over the years allow larger businesses to grow at a faster rate than SMMEs. These results support the NDP 2030 policy that more jobs can be created once government finds innovative ways to support manufacturing SMMEs.

[发布机构] Stellenbosch University