Journal of Economics and Behavioral Studies (ISSN: 2220-6140) Vol. 10, No. 2, pp. 48-62, April 2018 48 The Role of Basic Business Skills Development and Their Influence on South African Small, Medium and Micro Enterprise Sustainability Juan-Pierré Bruwer, Judith Smith Cape Peninsula University of Technology, South Africa BruwerJP@cput.ac.za Abstract: South African Small, Medium and Micro Enterprises (SMMEs) have received vast amounts of attention from both government and scholars over the years, mainly due to the socio-economic value they add to the national economy. Notwithstanding the importance of these business entities to the South African economy, prior research suggests that South African SMMEs have one of the worst sustainability rates in the world; mainly attributable to the influence of unmanaged economic factors. Included in these economic factors is the matter of a scarcity of skills, particularly that of basic business skills. Though limited research has been conducted on the individual business skills which require development in South African SMMEs the perception was formulated that the development of basic business skills in these business entities may have a positive influence on their attainment of key businesses objectives in the foreseeable future. As such, empirical research was performed which fell within the positivistic research paradigm; data were gleaned from South African SMME management through means of a questionnaire. Stemming from the results, it was found that although there is a dire need for the development of basic business skills in South African SMMEs. It can be argued that some basic business skills were more important to develop than others as only a few had a positive influence on the attainment of business objectives. Keywords: Basic business skills, Small, Medium & Micro Enterprises, South Africa, sustainability 1. Introduction In 1996 South African Small, Medium and Micro Enterprises (SMMEs) were first formally recognised by the South African government as drivers of the national economy (Bruwer, 2016). According to legislation 1 these business entities have the responsibility to attain three main socio-economic objectives. They pertain to the decreasing of national unemployment through job-creation, the diminishing of national poverty through wealth-dissemination, and the boosting of the national economy through adding value to the national Gross Domestic Product (GDP) (South Africa, 1996).Despite the fact that South African SMMEs make up approximately 90% of all business entities operating in the country (Mouloungui, 2012), while simultaneously contributing up to 57% to the national GDP (Naidoo & Urban, 2010;Thabethe, 2013), national unemployment 2 and national poverty 3 have not improved over the past two decades since the formal recognition of SMMEs by national government (Biyase, 2009;Cant &Wiid, 2013;Moloi, 2013).The foregoing is placed in perspective when taking into account that more than 50% of South Africans live in poverty; making ends meet on ±R25.00 per day / ±R779.00 per month (Cole, 2015;Grant, 2015). Additional evidence to support this view is provided through the statistics presented in Table 1. It is evident from Table 1that both unemployment and poverty are still major problems in South Africa. Particularly between 2000 and 2016 there was an increase of an estimated 3.3 million unemployed South Africans (an increase of 28.9%)while the Gini-index hovered between 0.60 and 0.69 over the same timeframe. Hence, taking into account the three socio-economic objectives which South African SMMEs are responsible to achieve, it is fair to assume that the sustainability 4 of these business entities is very weak. 1 In the context of this paper, the term “legislation” refers to the National Small Business Act No. 102 of 1996 and the National Small Business Amendment Act No. 26 of 2003. 2 South African unemployment is generally measured by the unemployment rate, as based on the narrow definition; referring to a percentage of a country’s estimated population who are unemployed and actively searching for employment opportunities (Ashipala, 2010;Fransman, 2014). 3 Poverty in South Africa is measured by the Gini-coefficient; a measurement which shows how equally wealth is disseminated in a country – 0 represents absolutely equal dissemination of wealth while 1 represents absolute unequal dissemination of wealth (Meyer, 2016). 4 Sustainability pertains to the attainment of relevant business objectives through the fulfilment of economic responsibilities, social responsibilities and/or environmental responsibilities, all with the intent to remain in operation