The Challenges of Small, Medium and Micro Enterprises in Engineering: South Africa

Abstract The small, medium and micro enterprise sector is an economic engine for many countries. Realizing the potential of small, medium, and micro enterprises, the government of the Republic of South Africa has put a burden on itself to create 90% of jobs through small, medium, and micro enterprises through the implementation of the 2030 National Development Plan. Despite these initiatives, the failure rate of these enterprises in South Africa is still high and continues to increase. This research aims to investigate the challenges of small, medium and micro enterprises that operate in the formal economy, with the focus narrowed down to small, medium and micro enterprises that provide engineering services to engineering-intensive firms in the public and private sectors in South Africa. The target is a sample of member companies of Consulting Engineers South Africa, as well as random engineering service firms that render similar services. In general, engineering services’ small, medium and micro enterprises mainly depend on owners’ limited capital, which limits growth initiatives. Moreover, the absence of adequate resources, business facilities and specialised equipment puts small, medium and micro enterprises at a competitive disadvantage and, therefore, causes stagnation. Government’s initiatives are not well publicised and, therefore, small, medium and micro enterprises are not well informed to capitalise on such initiatives.