CHAPTER 2 AN OVERVIEW OF SME SECTOR IN SOUTH AFRICA 2.1 INTRODUCTION 2.2 constitution of SMEs Researchers and scholars have failed to act up with a universally reliable definition of SMEs. A number of countries define SMEs based on the characteristics of the market in which the enterprise operates which has led to most countries shaping SMEs based on the level of economic development (Analoui and Al-Madhoun, 2006:2). The hobby section highlights on the study characteristics of SMEs: Characteristics of SMEs Pandey, Prasad and Shivesh (2007:2) identify the following characteristics in SMEs: ?Born by of individual initiatives &skills ?Greater operational tractability ?Low cost of production ? higher(prenominal) propensity to adapt engineering ? eminent capacity to innovate & export ?High employ orientation ?Utilization of locally available human & plain resources ?Reduction of regional im parallelisms There atomic number 18 other features which atomic numb er 18 essential for SMEs in any event the above mentioned for instance, contribution towards growth house servant product, providing a nationwide pool of skilled and trained manpower and enhancing loving life in the country.
The characteristics differ according to dissimilar countries though a number of common elements are identified such(prenominal) as number of employees, turnover and assets. Based on these facts, thither is need to define SMEs comprehensively in legal wounding of international and South African perspectives. The International Perspective The European league Commission defines SMEs based on three major components which are the number of employees, the firms turn over and the balance sheet. As from 1 Januar! y 2005, the Union classified SMEs if the criterion tell in the table which follows is met (European Commission Enterprise and Industry, 2005); Enterprise course of study passing CountTurnoverBalance Sheet Medium sized little than or equal to 250Less than or equal to 50 one cardinal million poundsLess than or equal to 43 million pounds SmallLess than or to...If you want to get a full essay, order it on our website: OrderEssay.net
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