Obstacles to SME Growth in the South African Civil Engineering Industry

Msipa, Vuyiso
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Numerous studies have found that small and medium enterprises (SMEs) significantly contribute to reducing unemployment worldwide. South Africa is facing high unemployment levels and the promotion of SMEs’ growth would assist the government’s objective to reduce unemployment. This study focused on understanding the perceptual internal factors that inhibit SMEs’ growth and their order of importance, in the South African civil engineering industry. Data was collected through self-administered questionnaires sent to randomly selected SMEs around the country. Six key factors (theoretical factors) and their order of importance were identified in the literature and confirmatory factor analysis was conducted which did not confirm a structural fit with the results from the respondents in this study. Exploratory factor analysis identified five factors (empirical factors), four of which were similar to the theoretical factors. The order of importance of empirical factors was found not to be similar to that of theoretical factors. The study found that the most important factors in the order of their importance were: lack of network and marketing; cost of production; skills shortage; internal financial problems; quality of utilities; and telecommunications. The age of the firm was found to affect the order of factors.
MBA thesis
Small and micro enterprises, Civil engineering