Growth barriers facing South African manufacturing small and medium enterprises

M.Com. (Business Management)Abstract: 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