Sustainable job creation through public procurement: a case study of the KwaZulu-Natal construction industry SMEs.

Abstract

This is a case study seeking to determine why South African Small and Medium Enterprises (SMEs) in the construction industry fail to create sustainable jobs in spite of their participation in the Preferential Procurement Policy Framework Act (PPPFA). Based on the latest figures released by Statistics South Africa, unemployment has become a consistently serious problem in South Africa. The background of the study highlights the efforts of the South African Government of Democracy immediately after the assumption of power in 1994. The Government’s efforts in sustainability through job creation accentuated the need for SME development via their participation in the PPPFA. The study adopts a mixed method case study design of qualitative and quantitative research methods. Both quantitative and qualitative data were collected at the same time, analysed separately and the results merged in the summary and discussions of the study findings. The area of the study is the Province of Kwa-Zulu Natal with all the construction industry SMEs participating in the PPPFA. The database of SMEs participating in the PPPFA was obtained from the Kwa-Zulu Natal Provincial Department of Transport. For data collection, a questionnaire containing closed ended questions developed on a Likert scale, and, open-ended questions was designed. A response rate was 98.6% from a sample of 420 SMEs. The quantitative data were analysed through the SPSS and qualitative data through the N-Vivo software programme. Findings of the study revealed that although the PPPFA is contributing positively to the socioeconomic development of the country to a certain extent, the job creation goal seems very feeble. The strong contributory factors to this failure are the incoherencies that exist between the PPPFA process management and performance management feedback to the policymakers resulting in poor PPPFA strategic plan improvements. The study therefore recommends job creation must form integral part of the policy. Secondly, Consistent performance management of the PPPFA processes must be fed back to the policymakers in order to address both SMEs challenges and the character flaw of the PPPFA. Resultant will be a clearly defined goals of the PPPFA in capacitating SMEs for job creation.