Research done by WSU senior lecturer and researcher Dr Siyabonga Mxunyelwa has pointed to the impending demise of Small to Medium Tourism Enterprises (SMTEs) in Buffalo City Metro, largely due to the lack of skills development within the sector.
The paper, titled ‘Skills as a conundrum in Entrepreneurship Development of Small to Medium Tourism Enterprises (SMTEs) sector in East London, Buffalo City Metro, South Africa’, sought to gather knowledge about skills development and skills levels amongst managers of entrepreneurial ventures in the city.
Following his examination of the responses Mxunyelwa received from the subjects of the research, it became apparent that the sector was in dire need of development where skills and training were concerned.
“The lack of entrepreneurship development is a burden on the South African economy. The sector currently faces challenges in education, training and skills development which causes an impediment to entrepreneurship development. Given the size of this sector, skills development plays a critical role in transforming an enterprise and driving entrepreneurship,” said Mxunyelwa.
Independent Tour Operator, Velile Ndlumbini, owner of Imonti Tours echoed Mxunyelwa’s sentiments, adding that though there are funding avenues available, government red tape hindered entrepreneurs from accessing funds.
After the covid-19 pandemic, Ndlumbini had to sell his entire fleet and retrench most of his staff.
“We can create a lot of jobs for the Eastern Cape, but there is too much red tape when it comes to financial support. I work alone and employ people on a freelance basis. Getting funding could assist me to employ these guys on a full-time basis,” said Ndlumbini.
Universally, small businesses are identified as an important growth sector that contributes to local economies, providing employment for many locals who have no formal education and would otherwise not have opportunities in many mainstream sectors.
Although this is the case, Proudly South African reported in 2021 that only 37% of small businesses survive to their 4th year and by the 10- year mark, only 9% are still alive. A shocking 70-80% never make it to celebrate one year in business.
Mxunyelwa’s research pointed out that central to the failure of small businesses, particularly in the Tourism Sector, was a lack of financial and strategic management skills.
“It is recommended that the business owners and managers must invest in skills development initiatives to enable them to improve performance and create sustainable enterprises. Furthermore, it is recommended that government should provide an effective training support programme by fostering the performance and growth potential of the businesses. Thus, entrepreneurship development will be realized to help developing economies such as the BCMM,” said Mxunyelwa.
Mxunyelwa also asserted that WSU was strategically positioned to assist the private and public sector in pursuit 2030 National Development Plan strategic objectives of reducing unemployment, inequality, and poverty that engulfs the Eastern Cape.
This also ties together with institution’s own Vision 2030 Strategic goals, which include Relevant and impactful research and innovation, Transformative community engagement and partnerships.
“WSU as an African university is the only hope for the disenfranchised Eastern Cape Communities. The Faculty of Business Science can play an integral part in offering short courses to assist with entrepreneurial development of SMMEs in areas such as Business Management, Strategic Management, Basic Bookkeeping, Finance and Accounting, as well as Market Research,” he said.
By Yanga Ziwele
