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This comes after Human Settlements Minister Tokyo Sexwale said last week that finding ways of developing South Africa's SME sector was an important factor in sustainable solutions for the country's economy.
"Globally small and medium-sized enterprises are recognised as engines of economic growth and job creation. Our government has long recognised the role SMEs will have to play in driving job and economic growth - but the time has come to coordinate all its initiatives for maximum effectiveness," Shahied Daniels, the institute chief executive, said.
"Unemployment threatens our social fabric and SMEs offer our only hope of overcoming this challenge."
SMEs already play a significant role in the South African economy, according to Finance Minister Pravin Gordhan in an October speech to the South African Chamber of Commerce and Industry.
"About 70% of private employment is in companies with fewer than 50 workers," Gordhan said.
About nine million South Africans are employed by SMEs and the sector is said to contribute 60% of the national gross domestic product.
Most telling of all, SMEs are creating a disproportionate number of the new jobs - up to 80%, again according to Gordhan.
The government is putting money and resources behind SMEs via various initiatives but Daniels said these efforts are fragmented and are consequently failing to achieve the necessary momentum.
He argues that South Africa should be following the lead of other countries around the world by taking a much more strategic approach to small business.
"Australia has a minister of small business and Europe's small businesses are playing a major role in keeping its economy going during the financial crisis."
Similarly, Botswana, Zimbabwe and Malawi are putting various coordinated initiatives in place to grow their SME sectors, and Malaysia is planning to be a developed economy by 2020 on the back of globally competitive SMEs, Daniels added.
"We understand the challenges that SMEs face, which is why we are making this call to create an overarching SME policy environment and a powerful ministry or other senior capability for enabling SME growth - and through it, the growth of the economy as a whole," Daniels said.