Local and international research on small enterprises speaks to the importance of Small,\ud
Medium and Micro Enterprises (SMMEs) in contributing to their respective economies and\ud
the potential of these enterprises to generate employment. The National Small-Business\ud
Strategy, as proposed in the 1995 White Paper on Small Business, was developed to assist the\ud
processes of employment creation and economic growth through assisting SMMEs in\ud
becoming more competitive in the global marketplace. Debate as to the effectiveness of this\ud
strategy and the subsequent development programmes has given rise to claims of conflict\ud
between the goals of economic growth and employment creation potential of SMMEs. The\ud
purpose of this research is therefore to determine links between employment creation\ud
potential and growth potential through increased competitiveness of ten South African\ud
SMMEs. Semi-structured interviews were conducted with owner-managers of each of the\ud
SMMEs. The interviews focussed on issues of competition in the respective markets,\ud
competitive practices, labour issues, technology issues and perspectives on the South African\ud
business environment. Additional interviews were conducted with a human development\ud
consultant and a politician at municipal level with experience in small enterprise\ud
development. The additional interviews covered the same broad topics as the SMME\ud
interviews but from perspectives removed from those of the owner-managers. Thematic\ud
Content Analysis (TCA) was used to extract themes emerging from the interviews from\ud
which links between competitiveness of the SMMEs and employment creation potential\ud
could be drawn. Results show that SMMEs aiming to become more competitive will tend to\ud
limit their dependence on labour to minimise costs and productivity constraints. Therefore,\ud
the policy objectives of economic growth and employment creation through SMMEs are\ud
divergent. The research adds to the body of knowledge on South African SMMEs and points\ud
to the need for continued research, particularly in developing up to date statistics on the\ud
SMME economy