Today's Labour News

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employment thumb100 Financial Mail writes that against the backdrop of last week’s jobs summit, it’s worth considering the potential for job creation and economic growth that lies in the country’s SME sector.  

According to Hischam El-Agamy, executive director of global business school IMD, SMEs "are the foundation for creating jobs.  Tapping into SMEs needs to be exploited and pushed."  The key to making a dent in the unemployment rate, which is nearing 30%, was to help SMEs access funding, said El-Agamy.  The 80-page jobs summit framework painted a bleak picture of the sector.  More than 50% of all start-ups and small businesses fail in the first 24 months because of inexperience and a lack of access to funding.  Financial literacy gaps have also emerged as a hurdle.  Jennifer Cohen of the Small Business Institute (SBI) says the government needs to have interventions that support SMEs, from the registration process through to growing their businesses.  Cohen noted that the summit did deliver some ideas around interventions to boost SMEs, but other areas weren’t touched on.  Problematic, for Cohen, was that the summit "focused on how big business can grow".  A study by the SBI and the Small Business Project (SBP) released in July found that SA has only 250,000 formal SMEs — those that employ fewer than 200 employees — a dramatic difference from the Department of Trade & Industry’s figure of 2.8-million, contributing 60% to employment and 52%-57% to GDP.

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