Concentrated ownership and control in many industrial sectors, as well as skewed support structures in favour of big business, were hindering enterprise development in South Africa, Trade and Industry deputy director-general Sipho Zikode stated Wednesday.

He said small and medium-sized enterprises (SMEs) found it difficult to access local and global markets, as a small group controlled the value chain and various other structures within different industrial sectors.

Zikode indicated that South Africa lagged behind in terms of enterprise development, despite faring well compared with its peers on many other fronts, especially in terms of infrastructure and support structures.

“South Africa has good financial and support programmes in place for its entrepreneurs, but SMEs still face challenges in accessing these support measures, owing to disjointed and untargeted service delivery,” he said at the 2012 Enterprise Development Conference, hosted by Anglo American in partnership with the Department of Trade and Industry.

Zikode said poor communication between national and provincial spheres of government often contributed to uncoordinated efforts.

In addition to red tape and poor access to input materials, growth in the SME sector was being hampered by low levels of entrepreneurship in the informal sector, resulting in little being done in the way of achieving global competitiveness.

“Growth in this sector is determined by entrepreneurs in trade and services subsectors, but these entrepreneurs are in business for reasons of survival rather than for exploiting business opportunities.”

He added that South Africa was falling behind its competitors in terms of its entrepreneurship score, making it difficult for informal enterprises to compete with foreign-owned companies.

“We have to solve these problems, because they are hinder the progress and development of SMEs,” Zikode urged.

Recent statistics show that developing economies are fuelled by their SME sectors, which contribute 95% of their gross domestic product and about 70% of employment.