The Potentiality of South African SMMEs Contractors Globalizing within the SADC Construction Market

Abstract

The African continent stands on the verge of developmental take-off, most especially the Southern African Development Community (SADC) region being one of the emerging economies. The 15 years SADC strategic plan for implementation of infrastructure and construction development is believed to stimulate economic, social and technological advancement; and increase the competitiveness and sustainability amongst the Small, Medium and Micro Enterprises (SMME) and large contractors within the region and globe. The major problem is that most of the SMME contractors within South Africa, which have the potential to grow into large construction companies and, to further internationalise their businesses lacks the global readiness. Thus, the global thrusts have generated the concepts of globalizing business strategy and operations, as one of the drivers of competitiveness of many countries and organisations. The purpose of this study is to evaluate the potential of the South African construction SMME /contractor's capability for globalizing within and beyond the SADC construction market. This study was conducted among the construction SMME contractors in Port Elizabeth, the Eastern Cape Province of South Africa. The qualitative research method was adopted an in-depth interviewing technique with 34 contractors (civil engineering and general building contractors) within the cidb grade 4 to 6 contractors. These SMMEs are being perceived to have the potential capacity to become large-scale construction organisations shortly. Findings revealed that only two SMME contractors are operating internationally while other contracting firms are currently sustainable and competitive in the domestic market, and however, few are planning to go global. The study also revealed that most of the SMME contractors are reluctant to amplify their potential capabilities, and needed the readiness to develop international business strategies that would enable them to penetrate and participate in the SADC region and global construction market. The study recommends that the SA construction contractors both SMME and large contractors should strive earnestly to harness their potential capacity towards globalizing their businesses, strategies and operations frameworks that would foster their global competitiveness.