Removing guesswork from SMME development: Leveraging data for smarter policy design

This policy brief emphasises the need for detailed data to support Small, Medium, and Micro Enterprises (SMMEs) in South Africa (PDF, 357 KB). Despite their potential for economic growth and job creation, there's a lack of reliable data, hindering effective policy planning. The authors suggest using administrative data, like tax records, to better understand SMME performance. They introduce the Spatial Tax Panel (STP) database, which offers comprehensive insights into small enterprises.

Key findings show that while micro and small businesses make up 80% of establishments, they contribute less than 25% of formal employment, below international standards. The data also highlights the diversity within SMMEs, each facing unique challenges. The brief concludes by advocating for a bottom-up approach to policy design, tailored to specific industry clusters, to create a more inclusive and dynamic small business ecosystem.

Abstract based on original source.