| Summary: | In the past twenty years there has been major change in the way business support services are rendered in the global economy. These shifts have brought new insights into the process of business support services. Six main changes in the approach to business support were identified. First, permanent government or donor funding was replaced by a mere start-up funding approach in order to provide sustainable business support services. Second, a larger range of market-driven and market-priced services that were delivered at a quality/price mix determined by end-users replaced the high costs of a limited range of services that used to be subsidised. Third, historically, literature shows that government and donors could not reach all small business but a limited number, and therefore a targeted client approach was introduced in order for the government and donors to reach them effectively. This paradigm shift was intended to place an emphasis on service providers in the private-sector. Fourth, the emphasis on the impact of poverty changed from one of short-term benefits to one of long-term benefits to providers and clients, indirectly benefiting the poor through job creation. Next, the mainly male clientele was replaced by small-enterprise owners which included females. Finally, there was a significant shift towards being demand-driven in respect of the needs of enterprises. This meant both that the range of services was expanded and that they were mostly delivered on a cost-recovery basis. It is against this background that South African Small Micro and Medium Enterprise (SMME) policy aims to address the issues of SMME support and development in the country.
SMMEs in South Africa were operating in the era of the apartheid regime but were not given enough support and were not a priority. Before democratic transition, the South African government was mainly giving attention to large businesses as well as state-owned enterprises. It was only in the late 1970s and the early 1980s that the South African government realised the importance of the small enterprise sector and its contribution to the countryâs economy. The democratic regime of the early 1990s gave SMMEs an opportunity to participate in the South African economy. A White Paper of 1995 came up with the strategy to promote and develop SMMEs in South Africa and to design an SMME policy framework that will focus its attention on supporting and developing SMMEs. The aim was to enable SMMEs to grow as a way of creating a balance in the economy (away from state-owned and large enterprises) As a result, different support mechanisms have been implemented to support and develop SMMEs in the country since the democratic government took over in 1994.
The study focused primarily in the Free State Province, aiming to identify how the SMME policy intends to address the issues of supporting and developing SMMEs, and how the business support programmes assist in supporting and developing SMMEs in the province.
Some of the empirical findings suggest that the world-wide shifts in business support programmes have not always filtered through to South Africa. Therefore policies were largely designed to address the equity issues related to SMMEs. The inherent approach of policy and practice was thus on the supply side and not on the demand side. Consequently, not all the lessons from the international experience were incorporated. In addition, the SMME policy and practice have had limited success and in many cases not measurable due to the absence of appropriate M&E systems.
In conclusion, the study recommend that there is a need for business support programmes to learn more directly from the international paradigms and practice and apply the relevant practices of business support services in order to develop and promote SMMEs in the Free State and in the process review the SMME policy and make it focus mainly on the demand-driven approach. Moreover, the study recommends that there should be M&E systems available to document the quality of the service delivery to SMMEs in order to ensure compliance with the international standards.
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