Education And Small Business Growth: A Gender Perspective Of Two Divergent Provinces In South Africa

Abstract

The article attempts to identify whether the level of education and gender has an impact on the business growth of SMMEs in a developing economy. The study furthermore looks at the contribution made by the SMME sector from a spatial perspective. The Western Cape is seen as a more affluent province and a bigger contributor to the country’s GDP as opposed to KwaZulu-Natal, which comprises of the former province of Natal and the Zululand homelands.

Entrepreneurship can be considered as one of the means of creating an enabling environment conducive to reducing poverty, stimulating economic growth, and creating employment opportunities, particularly in a South African context. Hence, activities in the SMME sector are often considered to be the bedrock of an economy and a key driver of growth and development. This holds most true for women assuming the role of entrepreneur, especially in developing countries. This study aims to explore and test this delicate relationship between women entrepreneurs and SMME sustainability, and to conduct empirical investigations into high-density SMME operations in two South African provinces.

Survey data were collected from SMME owners/managers in the Western Cape and KwaZulu-Natal provinces of South Africa. In building on previous academic literature on SMME sustainability and women in business, various measures are developed and tested for reliability and validity. The study is cross-sectional in design, making use of trained fieldworkers to administer face-to-face surveys to a diverse set of SMMEs. A structured questionnaire was used to collect data from 465 owners/managers in the two provinces. The findings show (i) a positive relationship between a business owner’s/manager’s level of education and business growth, (ii) no correlation between a business owner’s/manager’s education and employment, and (iii) no relationship between gender and business growth. The findings of the study can benefit the South African Government in directing policy, SMME owners, educators and women in business by increasing awareness of the nature of sustainable SMMEs, and the effect of operational skills, gender and education on the development thereof.

This study focuses on the growing sector of women in business and the impact of education in SMMEs linked toward business sustainability. A contribution is made toward theory development through empirical research.