Support of small enterprises through business linkages, and assessing the role of small business fairs in the eThekwini Municipality, South Africa.

Abstract

International evidence demonstrates that Small, Medium and Micro-Enterprises (SMMEs) play a critical role in the growth and stimulation of developed and developing country economies. Within the South African context, the National Framework for Local Economic Development (LED) aims to support the development of sustainable local economies through integrated government action. This Framework will ensure that SMMEs have an element of support from a local government perspective. With greater responsibility being allocated to local government, interrogating what local authorities could do to support SMMEs is important. The dissertation reflects on the eThekwini Municipality’s approach to this issue by focusing on the support of small enterprises through business linkages, and assesses the role played by Small Business Fairs in this regard. The primary empirical component of the research examines the effectiveness of the municipality’s flagship SMME support initiative – the annual SMME Fair. Over 160 small businesses were surveyed. The survey found in general that the stallholders felt the Fair was beneficial. Apart from the usual problems related to the organization of the Fair, the exhibitors also identified a number of weaknesses that hinted at the municipality’s strategic approach. Much of the frustrations of the respondents were linked to not receiving direct benefits from the SMME Fair in relation to business contacts and increased sales and it is argued that the municipality should explore further the benefits of business linkages. The role of local government in stimulating SMME Fairs to establish suitable business linkages with the big businesses may assist in addressing this major weakness that was identified. The SMME Fair has the potential to provide an ideal platform SMMEs from which to create business linkages.