The role of small, medium, and micro enterprises in contributing to the socioeconomic development of South Africa

Abstract

Since the start of the democratic era in 1994, South Africa has prioritised small, medium, and micro enterprises for economic growth and social development, offering significant opportunities to the unemployed population. However, the extent to which SMMEs contribute to the socio-economic progress of a particular economy is contingent upon various factors, including the specific country or sector in which they operate. In South Africa, the majority of SMMEs operate within the services sector, with 30% in wholesale and retail trade, 23% in community and social services, and 14% in financial services. Grounded on the Resource-Based View theory, this study aims to investigate how SMMEs contribute to the social and economic development of South Africa. Furthermore, their contributions align with four of the Sustainable Development Goals of the United Nations, making this research both relevant and timely. This systematic literature review included nineteen research articles using bibliometric indicators from the Google Scholar database. As a result, the literature review revealed four key SMMEs’ contributions to South African socio-economic development namely employment creation and income generation, economic growth, development and specialisation, contribution to GDP, and poverty alleviation. To further enhance this contribution, it is recommended that governments provide support in the form of training programs, access to finance, and mentorship opportunities to help SMMEs grow and create more job opportunities..