Abstract
M.Com. (Business Management)
The South African manufacturing SME sector is recognised by many as a key driver
of economic growth, employment and wealth creation. Despite the importance of the
sector to South Africa’s economic development, the majority of South African
manufacturing SME’s experience negative growth and severe losses. These losses
include investment capital, property, staff competencies and intellectual capital.
The purpose of this research is to identify the barriers that prevent the growth of South
African manufacturing SME’s. A mixed research method which is a combination of
qualitative and quantitative was used to gather data. A sample size of 8 SME’s was
selected via purposive sampling or judgmental sampling techniques for the qualitative
phase. The quantitative sample includes 61 manufacturing SME’s located in the
industrial area of Randburg, which is located in Strijdom Park.
The data was collected using structured questionnaires and semi-structured
interviews. The information was analysed with SPSS (Statistical Package for Social
Science) as well as applying the content analysis technique to identify barriers to
growth facing manufacturing SME’s.
The study concludes that there are several internal and external economic, political,
social and competitive barriers that prevent the growth and sustainability of the
majority of manufacturing SME’s in the Randburg CBD. The lack of access to finance,
high taxes and tariffs, and crime are amongst the most common barriers that hamper
manufacturing SME’s to grow in this area. The findings also revealed that an increase
of government investment in the sector can improve the start-up, growth and
competitiveness of the sector. This would enhance job creation significantly, as a high
percentage (above 65%) of employment in South Africa comes from the SME sector.