The role of skills and education in predicting microenterprise performance

Abstract

In the light of South Africa's high levels of unemployment and relatively small informal sector, enabling and supporting growth of small, medium and microenterprises (SMMEs) in the informal sector are of developmental importance as well as a policy priority. The associated benefits of SMME growth, such as employment creation, enhancement of economic growth, and poverty alleviation, provide further motivation for the prioritisation of this sector. Given the developmental importance of growth in the informal sector, and of SMMEs more generally, this policy brief examines the determinants of SMME performance in South Africa. Particular focus is placed on the role played by education and skills in driving the performance of firms.