Constraints facing SMEs in the pursuit of job creation : the case of the Cape Metropolis clothing industry

Abstract

The objective of the study was to determine the constraints that SMEs face in the Cape Metropolis Clothing Industry and what owners and managers within the Clothing Industry believe is required to revitalise the industry. SMEs, particularly within the Clothing Industry in the Cape Metropolis, have a vital role to play, in stimulating economic activity, poverty alleviation and raising living standards, which has been widely recognised in most countries. The high level of failure in this regard can be attributed to various reasons, among these being a lack of financial support, training, bottle necks and red tape. In order to obtain information about SMEs in the clothing industry of SMEs within the Cape Metropolis, a mixed method approach was used, both explorative and descriptive and quantitative in nature. A self-developed questionnaire was used to answer multiple choice, dichotomous type, self-assessment type and measure based questions which deal with the state of the clothing industry in the Western Cape, as well as face to face interviews by using the questionnaire as a template. Generally, the findings reveal numerous constraints, the clothing industry in the Cape Metropolis faces, including government assistance, lack of financing, a skilled workforce and cheap imports and buying power of retailers. The opinions of owners and managers in the industry are essential for government and policy makers. Issues that are highlighted include restrictive labour laws, local sourcing and changing customer behaviour and greater demand for their products. Owners and managers should adopt various strategies to remain competitive and to ensure that they remain profitable. Government support and purpose directed policies and programmes are essential for the sector’s survival. The recommendations could lead to better government interventions, and rigorous import controls. This study recommends better coordination between government agencies, interventions, and for owners and managers within the clothing industry as well as retailers and local consumers to revitalise the clothing industry in the Western Cape. However, innovation is essential for the clothing industry to be able to respond effectively to the changing environment which is triggered by globalisation forces. The industry faces a number of challenges. These were considered in the study and recommendations were made to provide guidelines to both government and the industry in order to improve business operations and increase employment.