Sustainable job creation through public procurement: a case study of the KwaZulu-Natal construction industry SMEs.
Abstract
This is a case study seeking to determine why South African Small and Medium Enterprises
(SMEs) in the construction industry fail to create sustainable jobs in spite of their participation in
the Preferential Procurement Policy Framework Act (PPPFA). Based on the latest figures released
by Statistics South Africa, unemployment has become a consistently serious problem in South
Africa. The background of the study highlights the efforts of the South African Government of
Democracy immediately after the assumption of power in 1994. The Government’s efforts in
sustainability through job creation accentuated the need for SME development via their
participation in the PPPFA.
The study adopts a mixed method case study design of qualitative and quantitative research
methods. Both quantitative and qualitative data were collected at the same time, analysed
separately and the results merged in the summary and discussions of the study findings. The area
of the study is the Province of Kwa-Zulu Natal with all the construction industry SMEs
participating in the PPPFA. The database of SMEs participating in the PPPFA was obtained from
the Kwa-Zulu Natal Provincial Department of Transport. For data collection, a questionnaire
containing closed ended questions developed on a Likert scale, and, open-ended questions was
designed. A response rate was 98.6% from a sample of 420 SMEs. The quantitative data were
analysed through the SPSS and qualitative data through the N-Vivo software programme. Findings
of the study revealed that although the PPPFA is contributing positively to the socioeconomic
development of the country to a certain extent, the job creation goal seems very feeble. The strong
contributory factors to this failure are the incoherencies that exist between the PPPFA process
management and performance management feedback to the policymakers resulting in poor PPPFA
strategic plan improvements. The study therefore recommends job creation must form integral part
of the policy. Secondly, Consistent performance management of the PPPFA processes must be fed
back to the policymakers in order to address both SMEs challenges and the character flaw of the
PPPFA. Resultant will be a clearly defined goals of the PPPFA in capacitating SMEs for job
creation.