Every country or nation in the world uses what we call an economic system. With economic systems, countries are able to respond to three central economic questions. What to produce? How to produce? For whom to produce? However, each of the four economic systems is different from the other, which results in economic systems with their own characteristics. The main characteristics of economic systems are the ownership of resources or factors of production and also the level of role played by the government. These are important things to consider when analyzing economic systems because they are the driving force behind every system. Scarcity is the reason why countries must answer the three central economic questions, since factors of production are limited in every economy. The systems not only provide answers to the three questions, but also have their own consequences that arise from each of them in their use on the economy. We may have advantages and disadvantages or pros and cons. Their use also has a different impact on the economy. We will begin by analyzing the traditional economic system, one of the four systems that will be discussed. TRADITIONAL ECONOMIC SYSTEM The traditional system is easier to understand and very surprising, one wonders why we had it as an economic system. The system uses the application of old methods from generation to generation. This means that the same production and distribution of goods remains the same from generation to generation. This argument is supported by Mohr and Fourie (2008:26): the traditional system is mainly about traditions, customs and beliefs. Countries that use this type of system are often rural and farm-based. Is that some under… half of paper… financially supported by the government to start their own business. Small, medium and micro enterprises (SMMEs) have increasingly taken on a role in South Africa's economy and development. SMEs are said to be responsible for the large percentage of job creation in South Africa. If the South African government could invest more money in SMEs, this would not only decrease unemployment but also the economy would grow. Everyone will benefit because as SMEs start to grow into large businesses, they will pay large sums of taxes because of the profits they will make. This will allow the government to obtain more revenue to provide necessary public goods and services and also to build new infrastructure. South Africa has great potential – it is up to government and business to take our economy where it can go.