…building the economy one job at a time

Judi Sandrock

Case Study – The role of Micro and Small Businesses in economic growth and job creation

(2007 to 2013)

…building the economy one job at a time

Benchmarking undertaken amongst high growth economies

Japanese economy: From 1950 to 2005, 83% of the growth of economy came from “Mom and Pop” businesses

– Prof. Ryo Kambayashi, Institute of Economic Research, Hitotsubashi University

…building the economy one job at a time

Small Business Contributions Since 2007 Brazil – 16 million SMEs contribute 20% of Brazil’s GDP, employ 60 million people or 56% of the workforce Russia – firms with less than 200 employees contributed 76% of job creation India - 26 million SMEs contribute 8% of India’s GDP, employ 90% of the workforce China - 60% of GDP and 75% new jobs South Africa – 2,4 million SMEs contribute 31% of SA’s GDP, employ 56% of the workforce US – 56% of GDP growth and 71% new jobs

…building the economy one job at a time

0  

10  

20  

30  

40  

50  

60  

70  

80  

90  

100  

Brazil   Russia   India   China   South  Africa  

USA  

GDP  

New  Jobs  

No  data  

%  

…building the economy one job at a time

Brazil   Russia   India   China   SA   US  

GDP  ($  Trillion)    2,362      2,504      4,784      8,260      0,579      15,660    

Percent  of  BRICS  GDP   13%   14%   26%   45%   3%   85%  

Growth  Rate  Economy   1,30%   3,40%   6,50%   7,80%   2,60%   2,20%  

GDP  Per  Capita    $12  000      $17  700    $3  900    $9  100    $11  300      $49  800    

…building the economy one job at a time

Brazil   Russia   India   China   SA   US  

Agriculture   5,40%   3,90%   17%   10,10%   2,40%   1,20%  

Industry   27,40%   36%   18%   45,30%   32,10%   19,10%  

Services   67,20%   60,10%   65%   44,60%   64,90%   79,70%  

…building the economy one job at a time

5%  

27%  

67%  

Brazil  

4%  

36%  60%  

Russia  

17%  

18%  65%  

India  

10%  

45%  45%  

China  2%  

32%  

65%  

SA  

Agriculture  Industry    Services  

…building the economy one job at a time

Brazil   Russia   India   China   SA   US  

Unemployment   6,20%   5,70%   9,90%   6,40%   22,70%   8,20%  

PopulaRon  below  poverty  line   21,40%   12,70%   29,80%   13,40%   31,30%   15,10%  

Gini  Index    51,90      41,70      36,80      47,40      63,10      45,00    

InflaRon  rate   5,50%   5,10%   9,20%   2,60%   5,20%   2%  

…building the economy one job at a time

Brazil   Russia   India   China   SA   US  

Export  1   China   Nether-­‐lands   UAE   US   China   Canada  

Export  2   US   China   US   Hong  Kong   US   Mexico  

Export  3   ArgenTna   Italy   China   Japan   Japan   China  

Import  1   US   China   China   Japan   China   China  

Import  2   China   Germany   UAE   South  Korea   Germany   Canada  

Import  3   ArgenTna   Ukraine   Switzerland   US   US   Mexico  

…building the economy one job at a time

Brazil   Russia   India   China   SA   UK  

PopulaRon      201  m    142  m    1  220  m    1  349  m    50  m    316  m  

PopulaRon    (0  to  24  yrs)   41%   27,50%   47%   33%   49%   33,70%  

Urban  populaRon   87%   73%   30%   47%   62%   82%  

Youth  Unemployment   17,80%   15,50%   10,20%   6,40%   49,80%   21,00%  

Internet  PenetraRon   44%   43%   N/A   53%   17%   78%  

…building the economy one job at a time

Some Suggestions - Way Forward

•  Link small businesses across BRICS to open up trade opportunties

•  Facilitate sharing of knowledge across BRICS specific to small businesses

•  Exchange programme for small business owners to operate for 6 to 12 months on other BRICS countries to understand the markets and build relationships

…building the economy one job at a time

References

“How South Africa can boost support to small businesses: Lessons from Brazil and India” - Stephen Timm, Mike Herrington www.tips.org.za

„Job Creation and Job Destruction in the Russian Economy“ Alessandro Acquisti and Hartmut Lehman www.tcd.ie

CIA Factbook www.ciafactbook.com