How high-growth entities’ knowledge of small, medium and micro-enterprise policy framework impacts business performance

Abstract

Orientation: Global policy attention has shifted from start-up companies to high-growth entities (HGEs), as these entities can innovate and scale up within a short timeframe.

Research purpose: This study aims to evaluate how knowledge of HGEs and use of the South African (SA) small, medium and micro-enterprise (SMME) policy framework impacts their business performance.

Motivation for the study: This study aims to understand if HGEs’ knowledge and use of the SA SMME policy framework fits practical and theoretical expectations according to the theory of planned behaviour and political entrepreneurship theory. This is an understudied area of research.

Research design, approach and method: The study collected data from 120 HGEs using quantitative survey, cross-sectional study methods. The data was analysed using descriptive and inferential statistics, this included univariate analysis of variance, Spearman correlation coefficient and Wald logistics regression analysis.

Main findings: The study found weak and insufficient relations between HGEs’ knowledge and perception of the current SMME policy framework and the kind of support that HGEs require. Contrary to theoretical expectation, there is a negative correlation between HGEs’ use of government support and turnover growth. More positively, HGEs’ perception of the SMME policy is that when properly executed it will lead to positive impact for SMMEs and society.

Practical/managerial implications: South Africa’s SMME policy should institute meritocratic development policies focused on separated stages of business growth as opposed to only a small-business policy currently.

Contribution/value-add: A separate and specific entrepreneurial policy being implemented for HGEs will make a difference to HGEs’ business performance and contribute to job creation and other social-economic benefits.