Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Compiled by the Research Programme on Human Resources Development, Human Sciences Research Council Published by HSRC Press Private Bag X9182, Cape Town, 8000, South Africa www.hsrcpress.ac.za © 2005 Human Sciences Research Council First published 2005 All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. ISBN 0-7969-2098-2 Cover by Elsabe Gelderblom Copy edited by David Merrington Typeset by Jenny Wheeldon Distributed in Africa by Blue Weaver Marketing and Distribution PO Box 30370, Tokai, Cape Town, 7966, South Africa Tel: +27 +21 701-4477 Fax: +27 +21 701-7302 email: orders@blueweaver.co.za Distributed worldwide, except Africa, by Independent Publishers Group 814 North Franklin Street, Chicago, IL 60610, USA www.ipgbook.com To order, call toll-free: 1-800-888-4741 All other enquiries, Tel: +1 +312-337-0747 Fax: +1 +312-337-5985 email: Frontdesk@ipgbook.com Free download from www.hsrc p ress.ac.za CONTENTS List of tables vii Acknowledgements ix Abbreviations xi 1 The existing state of knowledge about very small and micro enterprises in South Africa 1 Introduction 1 The history of VSMEs in South Africa and current evidence 2 Strategies for VSME skills development in South Africa 6 Conclusion 14 2 Experiences from the rest of Africa 15 Pre-employment programmes 15 In-employment programmes 17 The relevance of debates on skills development for enterprise development elsewhere in Africa, for South Africa 19 Beyond skills 19 Conclusion 24 3 Two methodological approaches to researching the VSME sector 25 Introduction 25 The National Skills Survey component 25 The National Skills Fund component 28 Conclusion 30 4 The VSME component of the National Skills Survey 31 Introduction 31 The nature of the sampled VSMEs 31 The scale of training in the sampled enterprises 34 The nature of training 41 Attitudes to training and perceptions of skills needs 44 Engagement with the National Skills Development system 46 Future training planning 50 Conclusion 52 5 Skills acquisition patterns among very small and micro enterprises (the NSF study) 55 Introduction 55 The nature of the VSMEs surveyed 55 Business context and development needs 57 Owners’/managers’ own skills and learning 60 Training and learning in the business 63 Relationship with the National Skills Development Strategy 64 Conclusion 69 6 Lessons for policy and practice 71 References 76 Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za Table 3.1: Number of interviewees by geographical area 26 Table 4.1: Number of respondents by SETA and type of establishment 32 Table 4.2: Number of employees by type of establishment 33 Table 4.3: Permanent employees by occupational and population group 33 Table 4.4: Percentages of employees trained by type of establishment and employee type 35 Table 4.5: Establishments with employees participating in training 36 Table 4.6: Number of permanent employees who participated in training during 2002/3 by occupational group and by population group 37 Table 4.7: Participation rates in training per occupational group 38 Table 4.8: Training expenditure 39 Table 4.9: Annual turnover, payroll and spending on training 40 Table 4.10: Ratios of payroll to turnover and spending on training to payroll 41 Table 4.11: Extent to which permanent employees participated in types of training 41 Table 4.12: Number of permanent employees who received training in terms of the ISO 9000 series, other international standards and NQF standards 42 Table 4.13: Training providers by establishment 43 Table 4.14: External training providers compared with the baseline survey 43 Table 4.15: Impact of training 44 Table 4.16: Extent to which skills were underdeveloped or lacking during 2002/3 45 Table 4.17: Extent to which occupational skills needed upgrading during 2002/3 46 Table 4.18: Claiming grants from the levy system 46 Table 4.19: Reasons for not claiming grants against levy payments 47 Table 4.20: Satisfaction with the services of SETAs rendered during 2002/3 48 Table 4.21: Support from the DoL, NSF and/or SETA received by non-registered establishments 49 Table 4.22: Planned initiation of learnership by establishments 50 Table 4.23: Plans to train in 2003/4 51 Table 4.24: Extent to which particular factors will cause establishments to increase training during 2003/4 (percentage) 51 Table 5.1: Distribution of owners of sampled enterprises by population group 55 Table 5.2: Employment by occupational level and employment status 57 vii ©HSRC 2005 LIST OF TABLES Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za This volume represents the collective endeavours of a number of people. I would like to thank the funders and their representatives – the National Skills Fund, the European Union and the Department of Labour. In particular, thanks must go to colleagues from these organisations who played a role in research design and in commenting on findings. These include Ian Macun, Botshabelo Maja, Marcus Powell, Pat Telela, Frans Strydom and Bongani Mkhize. My appreciation also goes to Human Sciences Research Council (HSRC) colleagues who also commented on design and analysis, especially Andre Kraak, Azeem Badroodien and Andrew Paterson. My administrative colleagues, Cilna de Kock and Zubeyda Ahmed, provided support for the research activities. This volume would not have been possible without the work done by Bees Development Organisation and the University of South Africa’s Bureau of Market Research. My thanks go to all members of their teams, but especially to Professor Johan Martins and Jocelyn Smith, the respective project managers. My thanks go also to the Sector Education and Training Authority (SETA) Strategic Project managers, consultants and service providers, who assisted us in getting access to the appropriate enterprises and who participated in our final seminar. This research could not have taken place without the assistance of a large number of very small and micro enterprise (VSME) owners and managers who gave their time to the researchers in order to enrich our understandings of the systems in which they are working. They are too many to name individually, but we hope that their investment of time in our research will be compensated for by this report and its intended impacts on policy and practice. Dr Simon McGrath Pretoria December 2004 ix ©HSRC 2005 ACKNOWLEDGEMENTS Free download from www.hsrc p ress.ac.za Free download from www.hsrc p ress.ac.za [...]... Department of Trade and Industry ESETA Energy Sector Education and Training Authority ETDP SETA Education and Training and Development Practices Sector Education and Training Authority FASSET Financial and Accounting Services Sector Education and Training Authority FET Further Education and Training FIETA Forest Industries Education and Training Authority FOODBEV Food and Beverages Manufacturing Industry Sector... Technologies ISO International Standards Organisation IT Information Technology LGWSETA Local Government, Water and Related Services Sector Education and Training Authority MAPPP Media, Advertising, Publishing, Printing and Packaging (SETA) MERSETA Manufacturing, Engineering and Related Services Education and Training Authority MQA Mining Qualifications Authority (SETA) MSE Micro and small enterprise... need for skills upgrading 5 ©HSRC 2005 Skills Development in Very Small and Micro Enterprises Strategies for VSME skills development in South Africa Skills development for VSMEs can be seen as falling across the remits of three national departments: Trade and Industry, Labour and Education I will draw on two earlier accounts in addressing each in turn (McGrath 2004a, 2005) Department of Trade and Industry... VTIs into enterprise development institutes, as in the case of the Malawi Entrepreneurship Development Institute (Grierson and Mackenzie 1996) Other programmes sought to add a package of interventions onto the traditional 15 ©HSRC 2005 Skills Development in Very Small and Micro Enterprises VTI curriculum These typically included skills in market analysis, general business skills and credit, as in the International... Banking Sector Education and Training Authority BDS Business Development Services CETA Construction Education and Training Authority CHIETA Chemical Industries Education and Training Authority COSATU Congress of South African Trade Unions CTLF SETA Clothing, Textile, Leather and Footwear Sector Education and Training Authority DIDTETA Diplomacy, Intelligence, Defence, and Trade Education and Training... when read in conjunction 1 ©HSRC 2005 Skills Development in Very Small and Micro Enterprises Before turning to the empirical studies, however, it is important to locate them both nationally and internationally within the broader debates about VSME skills development and, in the national case, in the context of existing policies and interventions Chapter 1 will look at South African research and policy... evidence points to the series of challenges inherent in developing skills development programmes for smaller enterprises and in using formal providers in these interventions Moreover, the broader evidence on enterprise development also serves to highlight the need to locate skills interventions within a broader range of understandings of and approaches to the micro and small enterprise sector 24 ©HSRC 2005... Notwithstanding its length (over 300 pages), the Investigation is frustratingly thin on detail about the skills acquisition pathways of those in the sector, spending far more time canvassing others’ opinions about the functioning of micro enterprises and suggesting ways of improving this functioning What does emerge is that only a small proportion of owners had learned their sector-specific and business skills. .. effect radical change in the training system by the nature of the post-apartheid organisation of government portfolios In spite of the best efforts of the Congress of South African Trade Unions (COSATU) training lobby, a major responsibility for the supply side of training 9 ©HSRC 2005 Skills Development in Very Small and Micro Enterprises remains with a separate DoE (and nine provincial departments),... Education and Training Authority SADC Southern African Development Community SAQA South African Qualifications Authority SETA Sector Education and Training Authority SETASA Sector Education and Training Authority for Secondary Agriculture SETO (later to become SETA) Sector Education and Training Organisation SME Small and medium enterprise SMLE Small, medium and large enterprise SMME Small, medium and micro . and Training Authority ETDP SETA Education and Training and Development Practices Sector Education and Training Authority FASSET Financial and Accounting. existing state of knowledge about very small and micro enterprises in South Africa Simon McGrath Introduction The development of very small and micro enterprises