How SMEs in South Africa can contribute to economic growth, recovery and developmentEmpirical studies show that small and medium-sized enterprises (SMEs) play an incredibly vital role in all economies, but especially in those of developing countries such as South Africa as they are a primary source of employment, innovation and the creation of new products. There is nothing small about SMEs as a whole, which contribute around 50%, employing 60% of the workforce and 22-50% of the country's gross domestic product (GDP). It could be argued that SMEs are a big driver of the South African economy. and play an important role in transforming South Africa from a third world country to a first world country. (Kim 2011:1). While it is clear from the above statistics that SMEs are central to South Africa's economic development, very little is known about them in terms of how they are defined, how they operate, why they are important, challenges they face and what they are doing the government to support them. What are small and medium enterprises (SMEs), well, that depends on the country you come from, as the definition differs from one country to another. The reason for the lack of consensus is that the measures used to define size differ depending on the industry in question, so in other words what might be small for one industry may not necessarily be small for another industry. (Mahembe 2011:24).Table 1EU USA ASIA GHANA RUSSIA INDIA CHINA EGPT RSA Employer Words PMI PMI PMI PMI PMI PMI PMI PMI PMI PMIMicro < 10 0 < 5 < 5 0 0 0 1-4 < 20Small < 50 < 100 5-50 6-29 15-100 0 1-300 5-14 50-99Medium < 250 <500 51-150 30-99 101-250 0 301-2000 15-49 100-200TurnoverMicro $3 million 0 RM250,000 $10 thousand 0 Small $13 million 0 ...... middle of paper ...... Southern Africa. The UCT Center for Innovation and Entrepreneurship. Available online: http://www.gsb.uct.ac.za/files/GEM2011Report.pdf [Accessed 12 February 2014].The Financial Services and Regulation Policy Committee Working Group. 2001. Report on SME access to finance in South Africa: a review of supply-side regulation. South Africa. Blueprint Strategy & Policy (Pty) Ltd. 2005. Promoting small and medium-sized enterprises in the South African chemicals sector. NEDLAC.SBP Chemicals Summit (Business Environment Specialists). SBP SME Growth Index Main Report. 2013. Easier, harder for small businesses in South Africa. Saxonwold. Johannesburg.Siko-Shosha, S. 2014, 28 January. Linda Olagunju on a mission to enlighten Africa. Young entrepreneurs. Available online: http://www.ybl.co.za/linda-olagunju-on-a-mission-to-light-up-africa/ [Accessed 12 February 2014].