Small and Medium Enterprises (SMEs): Instruments of economic growth and development in a South African regional dispensation

The South African economy is currently characterized by high levels of unemployment, abject poverty, high illiteracy, low productivity and low international competitiveness. It is also struggling to attract and retain foreign direct investment and portfolio investments. Amidst this situation, the formal sector is also continuously shedding jobs. Furthermore, the formal sector absorption capacity is steadily declining as is apparent over the past three decades, where formal the absorption capacity declined from approximately 75 per cent to about three per cent currently. Related to this is the fact that although the South African economy is growing, even at the currently low levels, it seems to be one that can be described as ‘jobless growth’.