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Enterprises (SMTEs) of the Eastern Cape (EC) province of South
Africa (SA): An empirical study
D. Vallabh & O. Mhlanga
Walter Sisulu University, East London, South Africa
ABSTRACT: Small businesses contribute prominently to the economy through creating more employ-
ment opportunities and generating higher production through entrepreneurship education and training.
The study is focusing on Eastern Cape Province (EC), economically the poorest province in South Africa.
The study identifies the barriers to education and training in small to medium tourism enterprises. Fur-
ther, the study investigates the level of education and training in the sector. Quantitative research was
deemed appropriate for the study, whereby systematic random sampling was employed to select a sample
of 332 respondent organizations. The largest proportion of managers (37.4%) had obtained a national
diploma as the highest education qualification and only 10.2 percent held a postgraduate qualification.
Less than 30 percent of managers had training or experience in Human Resource Management, Strategic
Management and Project Management. It is recommended that information technology, computer train-
ing and internet access be a priority in the school curricula.
Keywords
: Economy, education and training, information and technology, small medium tourism
enterprises
1
INTRODUCTION AND LITERATURE
REVIEW
SMEs are the first step towards development in
economies towards industrialization. Thurik and
Wennekers (2004), however, estimated that the
SME contribution to employment generation was
39% in South Africa.
The application of education and training by
SMTEs can help them overcome the management
issues that often confront these small businesses.
Skelton (2013) has demonstrated that integrating
education and training into the business proc-
ess and operating in the tourism and hospitality
industry can offer SMTEs many advantages in
operational, tactical and strategic management.
Despite this acknowledged importance and SME
contribution to economic growth, SMEs across
the globe and in South Africa in particular, are
still faced with numerous challenges that inhibit
entrepreneurial growth. Consequently, a number
of key constraints limit the effectiveness of the
tourism and hospitality industry from playing a
more meaningful role in the national economy. The
major constraints include:
The South African (SA) tourism and hospitality
industry is one of the country's leading economic
growth sectors, not only because of its contri-
bution to the gross domestic product, but also
because of its creation of sustainable jobs, particu-
larly, in the small business sector of the country
(Vallabh, 2014). The majority of these new jobs
are expected with the small, micro and medium
enterprises (SMMEs), across the broader SA travel
and tourism economy (Rogerson, 2005; Thomas,
2004). Hence, greater consideration should be
given to SMTEs to help them be innovative, adopt
systems that will allow them to explore their poten-
tial. It is therefore argued that in order to achieve
this, SMTEs need to maintain and understand the
importance of education and training initiatives.
There is consensus among policy makers, econ-
omists and business experts that small and medium
enterprises (SMEs) are drivers of economic growth.
A healthy SME sector contributes prominently to
the economy through creating more employment
opportunities, generating higher production vol-
umes, increasing exports and introducing innova-
tion and entrepreneurship skills (Tassiopoulos,
2011). According to Nguyen and Waring (2013),
•
the inadequate funding of resources by
government;
•
limited involvement by the private sector;
•
the limited integration of local communities and
previously neglected groups into tourism;
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