Figure 30: Percentage of Full Time Staff Employed at Profiled Businesses

The number of employees that profiled businesses employ indicates that most SMME businesses in the manufacturing sector employs between 1 and 20 employees. The graph indicates that while only 9.3% of businesses employ 200+ employees, and 13% employ between 50 to 200 employees, these businesses could be used as models to assist other smaller businesses with a smaller staff complement to develop and grow. This could be done by analysing what were their specific conditions that contributed to the growth of these businesses. These insights can be used to formulate strategies that can be applied to the smaller businesses to promote growth and development and ultimately support job creation.

SMME businesses within the manufacturing sector require specialized skills and many employers retain their workforce due to the nature of the business as the cost of training a new employee is high. Figure 31 indicates there are a small percentage of businesses that employ staff on a part time basis and this presents an opportunity for government or training institutions to approach these businesses and use these businesses to provide on the job training and experience to people wanting to enter the manufacturing sector, through internships. This result also further supports the fact that the business profiled is sustainable and only a few benefitted from government infrastructure development programmes in recent years.

Figure 32 indicates that 51.9% of SMME business owners in the manufacturing sector were previously employed in the manufacturing sector and eventually started their own businesses. This also indicates that most SMME business owners do have the technical know-how in the industry that they are operating in, but what could be lacking is business management skill. 48.1% of respondents indicated that they were not previously employed in the manufacturing sector and rely on entrepreneurship and businesses skills to operate and manage a business within the manufacturing sector as their technical knowledge and ability is limited. For owners and managers there is a definite need to provide training in the area of business management. This also highlights the idea that an entrepreneur does not necessarily have to be previously employed in the manufacturing sector to own and manage a successful business within the manufacturing sector.

Figure 33 displays the percentage of respondents that have received formal training and education that relates to the manufacturing industries. 42.6% indicated that they have received training / education while an high 57.4% indicated that they have not had any formal training or education and have only their experience to rely on, highlighting the need for training and development and business support initiatives.

Within the manufacturing sector, employees gain experience and work their way up to management with little or no formal training received at times, but the actual on the job training should be recognized as prior learning, and there is an opportunity for the relevant SETA agencies to investigate candidates that could qualify for Recognition of Prior Learning, in order to formalize their experience into a qualification. The graph clearly indicates that there is a need for training and skills development amongst existing SMME businesses in the manufacturing sector, not only amongst operational staff but in management as well. There exists an opportunity for Seda to partner with training organisations such as merSETA to develop and offer specialised training programmes that target management skills, operations skills and general manufacturing business management skills.

Figure 34: Attendance of trade fairs

Figure 34 indicates that only 50% of business owners in the manufacturing sector attend trade fairs and events, highlighting the need to expose developing SMME businesses to these events.

50% of respondents cited the main reason was not having time, as their businesses needed their attention on a daily basis. They indicated that these events are too far and they are unable to leave their businesses for two or three days.

Events such as trade fairs and events provides a platform for SMME businesses to showcase their products, networking opportunities, access to markets, access to information relating to new technologies, access to international standards etc. There exists a need to provide SMME businesses with knowledge regarding these events, as well as sponsorships to attend these trade events.

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  Seda Outreach Event
  
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  Business Expo’s
  
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  Trade Fair in Durban
  
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  Trade Fair in China
  
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  Vision Africa Event
  

Figure 35 highlights a gap that exists between SMME businesses and industry associations within the manufacturing sector. From the above graph it is clear that a large percentage of SMME businesses do not have ties with industry associations. Forming links with these associations has many advantages in that they provide industry information, networking opportunities, updates on new technologies and access to research and development information that would normally be quite expensive for an SMME business to obtain.

The manufacturing industry has very strict product quality standards especially for products used on construction, electrical and telecommunication sectors. There exists an opportunity for Seda to form alliances with industry associations and facilitate the opportunity for their customers to register with these associations especially with manufacturing businesses that are located in the smaller towns away from the industrial sectors of the cities.

Figure 36: Association to a Business Chamber or Network

From Figure 36 indicates it is clear that a large percentage of businesses do not belong to any business chamber or network, although this is not a compulsory affiliation there are benefits to becoming a member of a business chamber or network in that it is a formal, professional network access point and provides SMMEs with the opportunity to network with larger companies and has the added value of uplifting the profile and credibility of the business. In established business environments where all manufacturing businesses are located in a central area, it is easier to affiliate to a business chamber as these businesses understand the value of these initiatives whereas business in smaller towns and rural areas feel that the distances they have to travel for such services is too great and that the value it adds to their business is nominal.

Figure 37 shows the difference in opinion amongst businesses operating in the manufacturing sector regarding new business opportunities in the manufacturing sector. The majority of respondents were positive and feel that opportunities for growth and development do exist, indicating positivity regarding the future of manufacturing sector. A combined 14.9% of respondents do not agree with the statement which indicates the view that the manufacturing sector is shrinking in terms of business opportunities, and there exists a need to inform businesses of the support structures available for SMMEs in the manufacturing sector. Respondents have cited four reasons for the view that the manufacturing sector is shrinking these are:

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  High percentage of imports across all manufacturing subsectors.
  
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  Job Losses.
  
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  High cost of energy.
  
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  The lack of a skilled labour force.
  

When asked if the manufacturing sector held future employment opportunities a total of 68.5% of respondents agreed to this statement with 16.7% of respondents somewhat agreeing, highlighting the positive belief amongst SMME businesses in the manufacturing sector, however respondents pointed out that employment growth can only be achieved if the following factors are promoted:

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  Access to financing.
  
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  Skills Development amongst labour force.
  
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  Limiting of foreign imports.
  
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  Reasonable cost of energy.
  
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  Government support relating to sector strategies that support local businesses.