Propagandizing the treatise of wealth redistribution: an SMME story

Abstract

This study investigates the complex relationship between small- and medium-sized enterprises (SMMEs) and socio-economic factors in post-apartheid South Africa. Hence, we use a robust econometric framework to assess how SMME proliferation affects job creation, income redistribution, infrastructural development and GDP growth during two pivotal periods (1995–2010 and 1995–2023). We employed an ordinary least squares (OLS) regression model technique for analyzing relevant secondary datasets using the free EViews 12 student version (SV) x64 statistical software analytical package. During the period 1995–2010, we find that heightened SMME proliferation correlates positively and significantly with job creation, particularly in cases of opportunity-driven entrepreneurship. Moreover, the study underscores a direct link between SMME expansion and increased GDP growth, underscoring the vital role of these enterprises in shaping the economic landscape. However, in the extended period spanning 1995–2023, which encompasses both economic booms and recessions, the potential of opportunity-driven SMMEs wanes, attributed partly to business closures amid a recession. The major contribution of this study is that a combination of factors influences the impact SMMEs have on various socio-economic indicators. The insights gleaned from this research deepen our understanding of the intricate connections between SMMEs and broader socio-economic factors, offering valuable implications for policymakers and practitioners aiming to foster sustainable economic development.