Small and Medium Enterprise Development: A Case of Hamlet without the Prince

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Towards the end of 2016, something remarkable happened in the relationship between the private sector and state in South Africa. In an effort to keep the big three rating agencies from downgrading the country’s the sovereign credit rating to “junk status” the CEO Initiative was convened at the request of the President and his Deputy and led by the then Minister of Finance. The initiative’s initial goals were to prevent a sovereign rating downgrade and to stimulate inclusive and sustainable growth. To achieve this, three work streams were established: a fund for small and medium sized enterprises (SME), a youth employment scheme, and an investment intervention team. This post critically assesses the theoretical basis for SME development as a tool for inclusive growth.Read More »

Consequences of Deindustrialization in Brazil and South Africa, and Potential Remedies

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In a previous post, I wrote about the global trend of premature deindustrialization; the trend towards lower levels of industrial employment, and a shift away from industrial employment at lower levels of per capita income, and how the effects on human well-being of these trends are not yet clearly understood. An important question in understanding the impact of these changing structural patterns on individuals’ well-being is to whether either a lifting of the living standards of those not in formal employment, or the generation of employment to replace the manufacturing employment, is taking place.

In a recent working paper, I illustrated how combining a household level indicator of well-being with decomposition of change analysis can shed light on these questions by focusing on two specific episodes of growth; South Africa from 1996 to 2007 and Brazil from 1991 to 2010. Using Census data from IPUMS, I created indices of well-being on a scale of 0-100, using indicators such as child survival rate, access to clean water and electricity, and educations levels, culled from census data. Next, each household was assigned to a “type” based on sectoral employment of the household head and urban/rural location, and average household scores were calculated for each type. A decomposition of change analysis was then used to assign improvement in well-being to improvement within the types and shifts in population between these types.Read More »