197,592 research outputs found

    Small business incubators: An emerging phenomenon in South Africa’s SMME economy

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    In South Africa much policy attention is focused on the potential of the small, medium and micro-enterprise (SMME) economy for job creation. Nevertheless, despite government support for the SMME economy, high mortality rates are experienced by start-up enterprises. In common with international experience South Africa has adopted business incubation as a strategic tool for assisting the survival as well as building the competitiveness of SMMEs. This article analyses the state of business incubation in South Africa drawing attention to marked differences between the groups of public sector business incubators as opposed to those business incubators which have been initiated by the private sector

    South Africa Case Study: The Double Crisis – Mass Migration From Zimbabwe And Xenophobic Violence in South Africa

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    The protracted economic and political crisis in Zimbabwe led directly to a major increase in mixed migration flows to South Africa. Migrants were drawn from every sector of society, all education and skill levels, equal numbers of both sexes, and all ages (including unaccompanied child migration). Many migrants claimed asylum in South Africa which gave them the right to work while they waited for a refugee hearing. Many others were arrested and deported back to Zimbabwe. Migrants who were unable to find employment in the formal economy turned to employment and self-employment in the informal economy. These migrant entrepreneurs used personal savings to establish small and micro enterprises in many urban areas. The businesses focused on retail trading, manufacturing and services and contributed to the South African economy in various ways, including providing employment for South Africans. Nationwide xenophobic violence in 2008 targeted all migrants, irrespective of origin and legal status. From 2008 onwards, violent attacks on migrant-owned informal businesses began to escalate. This culminated in a second round of nationwide xenophobic violence in early 2015 when migrant-owned businesses were targeted by mobs. Migrants send essential remittances to family in Zimbabwe and return migration is not a viable or long-term response until Zimbabwe’s economic crisis is resolved. As a result, informal migrant entrepreneurs have adapted to hostile business conditions by adopting a range of strategies to avoid and protect themselves and their businesses from xenophobia. Against this backdrop, this report first discusses the nature of the crisis in Zimbabwe and its connections with large-scale out-migration, particularly to South Africa. The South African response to crisis-driven migration is reviewed showing how the government shifted from a predominantly coercive and control-oriented policy towards a more realistic assessment of the need to accommodate migrants through an immigration amnesty and the right to work in the formal and informal sector. One of the major challenges facing migrants and all stakeholders in South Africa is xenophobic violence. Nationwide attacks on migrants and refugees in 2008 and 2015 have been interspersed with ongoing lower-level episodes of violence. These attacks have increasingly targeted migrants and refugees, including many Zimbabweans, seeking to make a living in the country’s urban informal economy. The research for this report focused on the business activities and responses to xenophobic violence of Zimbabweans in the informal economy. Amongst the key findings were the following: • Between 20-30% of Zimbabwean migrants in South African cities are involved in the informal economy and the importance of informal sector employment to Zimbabweans has increased over time. • Zimbabweans operating enterprises in the informal economy are predominantly young (50- 75% under the age of 35) and male (60-70%). • Nearly two-thirds of the migrant entrepreneurs arrived in South Africa in the peak years of the Zimbabwean crisis between 2000 and 2010 (42%). Another 32% migrated after 2010. Less than 2% migrated to South Africa before the end of apartheid. • Economic hardship, unemployment and political persecution are the main push drivers of migration to South Africa. Pull drivers include the assistance of relatives already in South Africa and the prospect of employment. • The majority of the Zimbabwean migrant enterprises are in the retail, trade and wholesale sector, followed by services and manufacturing. Around three-quarters of the migrants relied on their personal savings to start their businesses and many worked in the formal economy first. • Business expansion has occurred despite the prime obligation of the entrepreneurs to support family still in Zimbabwe. Instead of reinvesting all of the business profits into further expansion, a portion is therefore diverted into remittance channels. Over one-third remit funds at least once per month and only 12% never send remittances. • A significant number of the entrepreneurs had been victims of or knew other who had been victims of crime such as looting and robbery, xenophobic abuse and police misconduct abuse. The report then presents the results of in-depth interviews with Zimbabwean business-owners who had experienced xenophobic violence in 2008 and 2015 or at other times. The narratives of the migrants provide insights into the unpredictable nature of the violence, their vulnerability to attack, the loss of business goods and property during mob violence and the need to restart from scratch, and the various strategies that they adopt to reduce risk. These strategies include operating in safer areas (not feasible for all), avoiding areas where corrupt police tend to operate, paying for protection and flight when xenophobic violence erupts. Return to Zimbabwe is not considered a viable option because of the economic conditions there. The interviews also provide insights into the migrants’ perceptions of government and stakeholder responses to the xenophobic violence. Almost without exception, the migrants felt that neither government (the Zimbabwean or South African) had done anything to protect or assist them during and after the violence. This perception of inaction also extended to international and non-governmental organisations. The migrants were particularly harsh in their comments about the police who were widely seen as either conniving in the violence or uninterested in protecting migrants. The perceptions of the migrants that nothing is done may simply be a function of who was interviewed and does not necessarily reflect the actual reality. The report therefore evaluates the response of the South African government to the ongoing crisis of xenophobia and concludes that some actions – such as sending in the army – are taken during episodes of nationwide violence but that ongoing daily and weekly attacks are generally ignored. There is a strong official line that these attacks are not motivated by xenophobia and. Indeed, that xenophobia does not even exist. This is clearly contradicted by the migrants who view the attacks as motivated by xenophobia. A second element of the official response is that the migrants are partially to blame for what happens to them as their business success builds resentment amongst South Africans. Government has yet to acknowledge that migrant-owned informal enterprises make a valuable contribution to the economy of the country, including through job creation for South Africans. The primary response to the violence of 2015 was the launching of a military-style Operation Fiela which was justified as a crime-fighting initiative but appears to have targeted migrant enterprises. The final sections of the report examine the responses and programmes of various non-governmental and international organisations to the crisis of xenophobia. During large-scale xenophobic violence there is considerable mobilisation of anti-xenophobia civil society organisations to offer protection and protest. Their effectiveness and impact tends to dissipate when the violence is more scattered and random. The South African Human Rights Commission (SAHRC) has played a major role in the past in holding government to account and articulating extensive recommendations for remedial action, most of which have not been taken up and many of which are still highly relevant. International organisations have tended to target integration and education programming at the community level but there has only been one systematic evaluation (of the UNHCR’s response) which was highly critical of the organisation. These organisations and other governments are considerably hamstrung by xenophobia denialism at the highest level because it means that government will avoid the kinds of partnership that are urgently needed to address this endemic crisis

    Divided Diasporas: Southern Africans in Canada

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    The protracted economic and political crisis in Zimbabwe led directly to a major increase in mixed migration flows to South Africa. Migrants were drawn from every sector of society, all education and skill levels, equal numbers of both sexes, and all ages (including unaccompanied child migration). Many migrants claimed asylum in South Africa which gave them the right to work while they waited for a refugee hearing. Many others were arrested and deported back to Zimbabwe. Migrants who were unable to find employment in the formal economy turned to employment and self-employment in the informal economy. These migrant entrepreneurs used personal savings to establish small and micro enterprises in many urban areas. The businesses focused on retail trading, manufacturing and services and contributed to the South African economy in various ways, including providing employment for South Africans. Nationwide xenophobic violence in 2008 targeted all migrants, irrespective of origin and legal status. From 2008 onwards, violent attacks on migrant-owned informal businesses began to escalate. This culminated in a second round of nationwide xenophobic violence in early 2015 when migrant-owned businesses were targeted by mobs. Migrants send essential remittances to family in Zimbabwe and return migration is not a viable or long-term response until Zimbabwe’s economic crisis is resolved. As a result, informal migrant entrepreneurs have adapted to hostile business conditions by adopting a range of strategies to avoid and protect themselves and their businesses from xenophobia. Against this backdrop, this report first discusses the nature of the crisis in Zimbabwe and its connections with large-scale out-migration, particularly to South Africa. The South African response to crisis-driven migration is reviewed showing how the government shifted from a predominantly coercive and control-oriented policy towards a more realistic assessment of the need to accommodate migrants through an immigration amnesty and the right to work in the formal and informal sector. One of the major challenges facing migrants and all stakeholders in South Africa is xenophobic violence. Nationwide attacks on migrants and refugees in 2008 and 2015 have been interspersed with ongoing lower-level episodes of violence. These attacks have increasingly targeted migrants and refugees, including many Zimbabweans, seeking to make a living in the country’s urban informal economy. The research for this report focused on the business activities and responses to xenophobic violence of Zimbabweans in the informal economy. Amongst the key findings were the following: Between 20-30% of Zimbabwean migrants in South African cities are involved in the informal economy and the importance of informal sector employment to Zimbabweans has increased over time. Zimbabweans operating enterprises in the informal economy are predominantly young (50- 75% under the age of 35) and male (60-70%). Nearly two-thirds of the migrant entrepreneurs arrived in South Africa in the peak years of the Zimbabwean crisis between 2000 and 2010 (42%). Another 32% migrated after 2010. Less than 2% migrated to South Africa before the end of apartheid. Economic hardship, unemployment and political persecution are the main push drivers of migration to South Africa. Pull drivers include the assistance of relatives already in South Africa and the prospect of employment. The majority of the Zimbabwean migrant enterprises are in the retail, trade and wholesale sector, followed by services and manufacturing. Around three-quarters of the migrants relied on their personal savings to start their businesses and many worked in the formal economy first. Business expansion has occurred despite the prime obligation of the entrepreneurs to support family still in Zimbabwe. Instead of reinvesting all of the business profits into further expansion, a portion is therefore diverted into remittance channels. Over one-third remit funds at least once per month and only 12% never send remittances. A significant number of the entrepreneurs had been victims of or knew other who had been victims of crime such as looting and robbery, xenophobic abuse and police misconduct abuse. The report then presents the results of in-depth interviews with Zimbabwean business-owners who had experienced xenophobic violence in 2008 and 2015 or at other times. The narratives of the migrants provide insights into the unpredictable nature of the violence, their vulnerability to attack, the loss of business goods and property during mob violence and the need to restart from scratch, and the various strategies that they adopt to reduce risk. These strategies include operating in safer areas (not feasible for all), avoiding areas where corrupt police tend to operate, paying for protection and flight when xenophobic violence erupts. Return to Zimbabwe is not considered a viable option because of the economic conditions there. The interviews also provide insights into the migrants’ perceptions of government and stakeholder responses to the xenophobic violence. Almost without exception, the migrants felt that neither government (the Zimbabwean or South African) had done anything to protect or assist them during and after the violence. This perception of inaction also extended to international and non-governmental organisations. The migrants were particularly harsh in their comments about the police who were widely seen as either conniving in the violence or uninterested in protecting migrants. The perceptions of the migrants that nothing is done may simply be a function of who was interviewed and does not necessarily reflect the actual reality. The report therefore evaluates the response of the South African government to the ongoing crisis of xenophobia and concludes that some actions – such as sending in the army – are taken during episodes of nationwide violence but that ongoing daily and weekly attacks are generally ignored. There is a strong official line that these attacks are not motivated by xenophobia and. Indeed, that xenophobia does not even exist. This is clearly contradicted by the migrants who view the attacks as motivated by xenophobia. A second element of the official response is that the migrants are partially to blame for what happens to them as their business success builds resentment amongst South Africans. Government has yet to acknowledge that migrant-owned informal enterprises make a valuable contribution to the economy of the country, including through job creation for South Africans. The primary response to the violence of 2015 was the launching of a military-style Operation Fiela which was justified as a crime-fighting initiative but appears to have targeted migrant enterprises. The final sections of the report examine the responses and programmes of various non-governmental and international organisations to the crisis of xenophobia. During large-scale xenophobic violence there is considerable mobilisation of anti-xenophobia civil society organisations to offer protection and protest. Their effectiveness and impact tends to dissipate when the violence is more scattered and random. The South African Human Rights Commission (SAHRC) has played a major role in the past in holding government to account and articulating extensive recommendations for remedial action, most of which have not been taken up and many of which are still highly relevant. International organisations have tended to target integration and education programming at the community level but there has only been one systematic evaluation (of the UNHCR’s response) which was highly critical of the organisation. These organisations and other governments are considerably hamstrung by xenophobia denialism at the highest level because it means that government will avoid the kinds of partnership that are urgently needed to address this endemic crisis

    Women Entrepreneurship in South Africa: Understanding the role of Competencies in Business Success

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    Background and aim: Environmental factors alone cannot determine the success of small, medium and micro-sized enterprises (SMMEs) and female entrepreneurs; there is a need to closely examine the internal factors that also contribute to business success. This is necessary because, despite the considerable government support and support of bodies interested in promoting gender equality in all areas (business included), 20% of female-owned businesses still fail annually. Consequently, even though, according to a report from the Department of Trade and Industry in South Africa, millions of Rands have been allocated to support female-owned SMMEs by way of government funding, training, grants and consultative support services, the failure rates of these female-owned businesses remain high. The main reason for this can be that over-dependence on these incentives often weakens rather than strengthens female entrepreneurs’ ability to manage their businesses and reduces their competitiveness by laying emphasis on external, contextual factors rather than internal, competence variables for success. Researchers in the past have suggested that focusing on the internal factors, especially the ‘people issues’ facing the entrepreneurs (in this case female entrepreneurs), may give the business a better chance of success. Design/methodology/approach: A ‘mixed-method’ approach, conducted in two parts, was adopted for this study and appropriate tools and techniques were used to collect and analyse the data drawn from a sample of female entrepreneurs in South Africa. The study applies culturally instantiated facets of the debate on gender entrepreneurship as part of a detailed and empirically sophisticated consideration of the status of female entrepreneurship within South Africa. The qualitative aspect utilised semi-structured interviews and focus group discussions. The quantitative aspect utilised survey questionnaires developed from the findings of the qualitative study. Results: All participants agreed that entrepreneurial competencies are vital for business success. The study also makes a clear distinction between the traits approach and competencies approach in understanding business success. Arguably, the competency variable is viewed and appreciated differently by female entrepreneurs in South Africa. The findings also showed some cultural variations in the application of entrepreneurial competencies among the four dominant racial groups in South Africa. Conclusion: This study offers a comprehensive analysis of the competency variable in understanding the factors that influence business success in the context of South African female entrepreneurs. It provides a basis for an agenda for focus on training and development of the entrepreneurial competencies of female entrepreneurs in South Africa

    No. 77: Living with Xenophobia: Zimbabwean Informal Enterprise in South Africa

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    South Africa’s crisis of xenophobia is defined by the discrimination and intolerance to which migrants are exposed on a daily basis. A major target of the country’s extreme xenophobia – defined as a heightened form of xenophobia in which hostility and opposition to those perceived as outsiders and foreigners is expressed through violent acts – is the businesses run by migrants and refugees in the informal sector. Attitudinal surveys clearly show that South Africans differentiate migrants by national origin and that Zimbabweans are amongst the most disliked. Zimbabweans are certainly not the only small-business owners to have become victims of extreme xenophobia. However, few studies to date have specifically examined the impact of xenophobic violence on Zimbabweans who are trying to make a living in the South African informal sector. This report is based on two sources of data: (a) in 2015, SAMP’s Growing Informal Cities (GIC) Project surveyed over 1,000 randomly selected migrant-owned informal sector enterprises in Cape Town and Johannesburg. The data on 304 Zimbabwean-owned enterprises included in the survey sample has been extracted for analysis; and (b) in 2016, 50 in-depth interviews were conducted with Zimbabwean informal business owners in Cape Town, Johannesburg and Polokwane who had been affected by xenophobic violence. The demographic profile of the Zimbabwean migrant entrepreneurs in the GIC survey included the following: As many as 60% of Zimbabwean entrepreneurs in Cape Town and 65% in Johannesburg are male. This was a marked contrast to informal cross-border trade between Zimbabwe and South Africa, which is dominated by female Zimbabweans. The number of migrant entrepreneurs who arrived in South Africa peaked between 2005 and 2010 at the height of the economic crisis in Zimbabwe and has since fallen. As many as 88% of the migrants in Cape Town arrived in the city after 2005 (compared to 52% of those in Johannesburg). Only 5% of the survey respondents had experience working in the Zimbabwean informal economy before migrating to South Africa. Those with prior experience had generally been involved in informal cross-border trading and were therefore familiar with South Africa. Relatively few of the Zimbabwean entrepreneurs did not have documents permitting them to be in the country and/or to work legally. Just over one-third of the migrants in the survey had asylum-seeker (Section 22) permits but only 5% had refugee status (Section 24 permits). Around one-quarter had work permits and 10% had visitor’s permits. Only 15% did not have permits to reside and/or work in South Africa. The majority of the surveyed Zimbabwean enterprises were in the retail, trade and wholesale sector, followed by services and manufacturing. Most migrants did not start an informal business immediately on arrival in South Africa but first raised start-up capital through regular and casual employment. Against this backdrop, the report focuses on the findings from the in-depth interviews with Zimbabwean entrepreneurs. First, we review their experience of xenophobia and xenophobic violence. Most of the respondents recounted incidents of violence that had personally affected them. These accounts revealed a number of common features: To migrants, much of the violence occurs without warning and appears spontaneous. However, this is rarely the case as many attacks are preceded by community meetings from which migrants are excluded. They, therefore, have little ability or time to take evasive action. The perpetrators of xenophobic violence are often from the same community and are even personally known to their victims. The fact that migrant entrepreneurs provide goods, including food, at competitive prices and offer credit to consumers is clearly insufficient to protect them when violence erupts. In many areas, community leaders are ineffective in dealing with the violence and, in some cases, they actively foment hostility and instigate attacks. The looting of stock on the premises is a constant feature of the attacks. However, robbery per se is not the prime motive for the attacks. Virtually all agreed that the purpose of the attacks was not simply to steal certain desirable goods but to destroy their business premises and operations so that they could not continue to operate and would go back to Zimbabwe. South African business owners in the same vicinity are left alone during crowd violence. Attacks often involved vicious physical assaults against the person, accompanied by insulting xenophobic language. Many accounts describe how anti-government service delivery protests quickly disintegrate into mob violence and looting of shops owned by migrants. The looting is never indiscriminate and targets only migrants. Migrants feel that they are scapegoats for government failure to deliver services. There was some evidence of “violent entrepreneurship” involving attacks orchestrated by South African competitors. Xenophobic violence is gender-indiscrimate with male and female migrants recounting equally harrowing stories. The respondents differed on whether Zimbabweans were particular targets. Most said that all foreign-owned businesses were targeted. A number commented that the type of business made a difference, with food and grocery shops being especially vulnerable. The pervasive view amongst South African politicians is that xenophobia does not exist in the country. However, the term “xenophobia:” was used by all the rewspondents to describe the harassment and physical abuse that they experience and some even referred to the widespread violence in 2008 and 2015 as “the xenophobia.” The language and practices of xenophobia cow the victims into silence and a sense of helplessness. The interviews provide important insights into how migrant entrepreneurs respond to the threat and reality of xenophobic violence. Trying to “fit in “ and integrate by learning local languages, dress codes and cultural practices is one way to try to pre-empt attacks. However, these strategies are no guarantee of protection when mob violence breaks out. Some suggested that there was safety in numbers and that conducting business in areas where there were many other migrant businesses reduced the risks of being attacked. The downside of operating in safer spaces is that business competition is extremely fierce. Most are aware that a great deal of the xenophobic violence is confined to low-income areas, particularly informal settlements. While it is possible for some to avoid doing business in these areas, and to operate in areas of the city where attacks are less frequent, this is not feasible for all. Many Zimbabwean migrants to South Africa do not have the financial means to afford accommodation outside informal settlements and do not have the resources to run a business elsewhere. Several respondents noted that the unpredictability of the attacks made it difficult to plan in advance. Some said that they made sure that they did not keep all of their stock at the place of business, storing some at home or in rented containers. All tried to minimize the amount of cash they kept on the premises. Various reactive strategies were mentioned, including temporarily ceasing business operations, staying indoors at home, and moving in with friends or relatives in other parts of the city. None of the respondents said that xenophobic attacks would put them permanently out of business. On the contrary, most said that they would simply raise the capital and start again. The logical implication of this is that xenophobic violence fails in its two main aims: to drive migrant entrepreneurs out of business and to drive them out of the country. Many respondents made reference to the fact that the crisis in Zimbabwe meant that there was nothing for them to return to, even if they wanted to return

    The Role of Local Economic Development on Small, Medium and Micro Enterprises

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    This article aims at exploring the role of Local Economic Development (LED) in reshapingthe economy of South Africa through the promotion of Small, Medium and Micro Enterprises (SMMEs)in local government. This paper is built on the post 1994 South African government concept ofgrassroots initiatives and community participation. With local government being viewed as a sphere ofgovernment, this meant that it is allocated a range of roles and responsibilities with respect to economicand social development. Therefore, the objective of the paper is to examine how the LED hascontributed to reshape the grass root economy of South Africa. The research design used in this articlewas a mixed method approach. In the qualitative method, data were collected by means of an extensivereview of government and public documents, academic books and articles. In terms of the quantitativemethod, SMME entrepreneurs in the Mbombela Local Municipality of the Mpumalanga Province,South Africa (SA) completed self-administered questionnaires. The findings point to the fact that SouthAfrica needs to make the SMMEs environment conducive and favourable for business purposes. LEDdoes contribute positively towards the growth of the economy of South Africa

    CSi in South Africa: Examining CSI Strategy, Practice, and Attitudes with a Focus on Social Enterprise and Blended Value

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    The project aimed to: Identify attitudes and practices among leading CSI officers in South Africa surrounding CSI objectives, CSI strategy, and major philanthropy models, particularly social enterprise and blended valueAssess the market for Heart's Blended Value Proposition Funds among CSI officer

    No. 79: Rendering South Africa Undesirable: A Critique of Refugee and Informal Sector Policy

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    To understand the policy environment within which refugees establish and operate their enterprises in South Africa’s informal sector, this report brings together two streams of policy analysis. The first concerns the changing refugee policies and the erosion of the progressive approach that characterized the immediate post-apartheid period. The second concerns the informal sector policy, which oscillates between tolerance and attempted destruction at national and municipal levels. While there have been longstanding tensions between foreign and South African informal sector operators, an overtly anti-foreign migrant sentiment has increasingly been expressed in official policy and practice. This report describes the strategies being used to turn South Africa into an undesirable destination for refugees, including the setting up of additional procedural, administrative and logistical hurdles; the undercutting of court judgments affirming the right of asylum-seekers and refugees to employment and self-employment; ensuring that protection is always temporary by making it extremely difficult for refugees to progress to permanent residence and eventual citizenship; and restricting opportunities to pursue a livelihood in the informal sector. The authors conclude that the protection of refugee rights is likely to continue to depend on a cohort of non-governmental organizations prioritizing migrant livelihood rights and being willing and able to pursue time-consuming and costly litigation on their behalf
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