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SA SMEs see bright future

Lauren Kate Rawlins
By Lauren Kate Rawlins, ITWeb digital and innovation contributor.
Johannesburg, 19 Jan 2017
Data provided by the survey will help businesses and policy-makers, says Facebook Africa head Nunu Ntshingila.
Data provided by the survey will help businesses and policy-makers, says Facebook Africa head Nunu Ntshingila.

South African small and medium enterprises (SMEs) polled on Facebook said they created jobs in the past six months (23%) and nearly 50% stated they want to create jobs in the next half-year.

The Future of Business Survey is a partnership between Facebook, the Organisation for Economic Co-operation and Development (OECD) and the World Bank, and was set up in response to the UN secretary general's call in 2014 for a data revolution to help achieve the Sustainable Development Goals.

The results are meant to be a global source of information on SMEs and provide unique insights into the global SME outlook, challenges, tactics and demographics, which will help inform policy-makers' decisions and help economies grow.

Thirty-three countries (including South Africa) from around the world are surveyed and, to date, nearly 150 000 Facebook business page owners, from both newer and long-standing companies, have taken the monthly survey.

The latest insights were revealed this week to coincide with the World Economic Forum taking place in Switzerland.

Nunu Ntshingila, Facebook head of Africa, says: "This partnership between Facebook, the OECD and the World Bank is continuing to provide a unique and timely window into the digital economy. Collectively, we believe in the power of this new source of data and the value it will bring to businesses and policy-makers alike."

She says SMEs make up more than 90% of all businesses in most economies and provide the majority of jobs. Therefore, "the role of SMEs in economic growth and social development is especially important in growing countries such as South Africa".

SME confidence grows

Across all 33 countries, on a global level and across all survey months, 42% of SMEs are positive about the current state and 60% about the future.

South Africa is higher than global average, with 50% of SMEs saying they are positive about the current state and 73% about the future.

"It's also heartening to see South African SMEs are positive about the future of their businesses. The data shows business confidence grew seven percentage points among South African SMEs in the wake of the local government elections in August 2016," says Ntshingila.

The survey revealed the most common challenges for businesses in SA are attracting customers (71%), maintaining profitability (53%) and increasing revenue (53%).

It also showed South African business owners are tech-savvy, with 82% saying they use online tools to advertise to potential new customers, show products/services (76%) and provide information (71%).

Only a small percentage of South African SMEs (15%) engage in international trade, but the study found these SMEs were more confident than non-traders.

This, says Ntshingila, "highlights the opportunity for local businesses to boost their businesses by globalising their operations".

The social media company says there are now more than 60 million small businesses on Facebook, and more than 35% of their fans are in a different country, which is up from 30% in 2015.

Globally, 65% of respondents said they are connected to at least one SME in a foreign country.

For the full results on South African SMEs, click here.

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