No. 03: International Migration, Immigrant Entrepreneurs and South Africa’s Small Enterprise Economy

Since 1990 there has been a growing movement of foreign migrants and refugees to South Africa. The migrants have come primarily from South Africa’s traditional supply areas, including many Southern African Development Community (SADC) countries. An increasing number, however, are from elsewhere in Africa and further afield. South Africa’s new migration regime has generated considerable controversy within the country. The policy debate focuses on the implications of migration for the national labour market and for the development of new national immigration policy. The best-documented form of migration by temporary workers is from surrounding African countries in such sectors as mining and agriculture. Less well-known are the migrants and new immigrants who have established themselves in the informal and small enterprise economy. This report examines and analyses the role of new foreign migrants working in the small, medium and micro enterprise (SMME) sector of South Africa’s major city, Johannesburg, is of particular interest because it is the focal point for much of the current international migratory flow into South Africa. The study is based on a detailed survey of 70 immigrant entrepreneurs who have established small businesses in Johannesburg. These entrepreneurs operate their businesses in the inner-city of Johannesburg, an area which has experienced dramatic changes in its organisation, residential complexion and business make-up over the last decade. Large parts of the inner-city have, in fact, been taken over by foreign migrants. Foreign-owned SMMEs are now a particularly significant element of the changing economy and landscape of inner-city Johannesburg. Several general conclusions can be drawn about foreign migrant involvement in the SMME sector: The kinds of businesses established by immigrant entrepreneurs fall within a relatively narrow band of activities. Most SMMEs are in retail or service rather than production activities. In our sample, business activities included selling curios, retailing ethnic clothes and foods, motor-car repairs/panelbeating and hairdressing salons. Other activities included the operation of restaurants, nightclubs, cafés, a music shop, several import-export businesses and one traditional healer. Among the group of production SMMEs, many are clustered in the clothing sector. Activities include making traditional African clothes, wedding dresses, and general tailoring. Distinct clusters emerged in the kinds of businesses operated by migrants from particular countries. Malawian immigrants tend to be involved in clothes production or curio selling; Zimbabweans and Mozambicans in motor-car repair or curio selling; and West Africans in ethnic businesses related to clothes, food retailing and the operation of restaurants. Typically, these new immigrant businesses are run by single, young, male entrepreneurs who work long hours. On average the entrepreneurs work a 64-hour week. Employees work similar hours. The entrepreneurs often endure considerable hostility towards both themselves and their businesses as a result of xenophobic sentiment and actions. Despite a sometimes difficult local climate in which to operate, most immigrant entrepreneurs express optimism and look to the possibilities of expanding their existing business in South Africa. Despite Johannesburg’s tarnished popular image of crime and violence, the entrepreneurs interviewed preferred to run their businesses there. Proximity to home (for SADC citizens), strong market potential and networks of family and friends are all important reasons. Among these immigrants, Johannesburg enjoys a far more positive image than might be expected. The study allows us to distinguish two distinct groups of migrant-entrepreneurs, namely migrants from SADC countries and non-SADC migrants. The research points to a number of marked differences between SMMEs operated by SADC and non-SADC migrants. Many of the businesses operated by migrants are integrated into and supported by wider international (non-SADC migrants) and regional (SADC migrants) networks. Overall, some 65% of the sample operated like businesses in their countries of origin. Non- SADC entrepreneurs have wide international family and business connectivity including links to West Africa, Canada, the United States of America and Europe. Most SADC entrepreneurs acquired their start-up capital from previous jobs in South Africa. Most non-SADC entrepreneurs financed their businesses with funds brought in from outside South Africa. Businesses run by SADC immigrants are smaller and seemingly less well-capitalised than those of their non- SADC counterparts. Part of the diversity and strength of the non-SADC run businesses derives from their exploitation of income niches as “ethnic businesses” and of Francophone culture in general. Immigrant entrepreneurs from non-SADC countries are better educated than those from SADC countries and have wider horizons in their business development strategies. Some 50% of non-SADC entrepreneurs had some university-level education. Three had masters degrees and one was a qualified dentist. The majority of SADC entrepreneurs had a secondary school education. The entrepreneurs face a number of problems operating their businesses. Most frequently cited were (a) access to finance and credit including difficulties opening bank accounts; (b) problems associated with acquiring visas and permits and dealing with customs (with SADC migrants experiencing greater problems); (c) harassment by police and local officials; and (d) being targeted by criminals and gangs. The most important set of policy-relevant findings in this study relate to the role of foreign-owned SMMEs in job creation: The SMME’s in the study had created a total of 227 job opportunities (or 3,33 jobs per business). Non-SADC businesses created more jobs on average (4,06 per enterprise) than SADC businesses (2,65), but both groups clearly created employment. Within SADC enterprises, some 53% of employees are from the home country. The figure for non-SADC enterprises is much lower (at 27%). Non-SADC enterprises, particularly Francophone-owned, tend to employ non-home country migrants as well, but some 50% of employees are South Africans. Most entrepreneurs begin by employing relatives or fellow immigrants from the home country. After a period of consolidation and growth, they begin to employ more South Africans. These small immigrant-run businesses are thus clearly contributing directly towards local job creation in Johannesburg for South Africans. Once the business is well-established, the major beneficiaries in job creation are South Africans. In the long-term, given the continuing prosperity and growth of these enterprises, an ever-increasing proportion of South African workers will be absorbed into these small businesses. In combating the xenophobia that surrounds foreign-owned business, it is essential that national and local policy-makers appreciate and openly acknowledge the positive role - both existing and potential - of these businesses. In particular, this issue will be crucial in the context of future job creation and local economic development planning for Johannesburg. In fact, given the concentration of businesses and entrepreneurs’ residences in the inner-city areas of Johannesburg, city planners and policy-makers should not overlook the potential contribution of these SMMEs towards the economic and social regeneration of inner-city Johannesburg. The same could be true of other South African cities

Urban agriculture and urban poverty alleviation: South African debates

Growing international attention has focussed on the potential role of urban agriculture in poverty alleviation. The aim in this paper is to analyse the existing challenge of urban poverty in South Africa and examine the potential role of urban agriculture as a component of a pro-poor urban development strategy.Community/Rural/Urban Development, Food Security and Poverty,

The evolution of hotels in Johannesburg 1890-1948 : a case of historical urban tourism

Abstract: Urban tourism is attracting a growing international scholarship. The aim in this paper is to address the limited focus on historical aspects of urban tourism. Using a range of historical documentary sources this paper analyses the evolution of hotels in Johannesburg from the period of the establishment of the gold mining settlement to the period of the late 1940s. The methodology made use of primary historical data from a range of archival sources. The results reveal certain similar findings to those of other historical research on hotels, most notably the role of city’s top tier establishments as foci for the adoption of new technologies and of Johannesburg’s leading hotels as nodes of elite sociability. Nevertheless, in terms of interpretation, the most distinctive characteristic of the early hotel economy of Johannesburg was the subordination of the supply of accommodation services to the sale of liquor

Historical urban tourism : developmental challenges in Johannesburg 1920-1950

Abstract: Over the past decade there has been considerable growth and maturation of research concerning contemporary urban tourism. Tourism in major cities is not a new phenomenon rather it has existed from the earliest times of civilization following the birth of cities. The historical development of cities as tourist destinations has remained little investigated as urban tourism research is overwhelmingly ‘present-minded’. This paper addresses the neglect of historical studies in urban tourism. Using archival sources an investigation is undertaken of the early development of tourism in Johannesburg, South Africa’s largest city, which evolved from a gold mining camp established in 1886. The analysis focuses on the period from 1920 when the first tourism promotional activities were initiated to 1950 when national government enacted the Group Areas Act which began the radical reshaping of tourism in South Africa under the influence of apartheid legislation. In the formative years of urban tourism in Johannesburg between 1920 and 1950 two key overarching challenges are identified. These are the challenges of identifying and promoting the city’s tourism assets and of the building of a competitive infrastructure for tourism development, most notably in terms of the hotel accommodation sector

Historical Geographies of Coastal Tourism: Mossel Bay, South Africa c.1850-1988

During the past decade there has occurred a burst of international research and debate on coastal tourism as part of the ‘blue economy’ including a growth of geography-specific scholarship. Arguably, however, within the extant geographical literature there is an overwhelming ‘present-mindedness’ and limited historical perspectives. This paper addresses this neglected knowledge gap by using an historical approach and archival sources to undertake a locality-based study of the historical transitions which have shaped and reshaped one coastal settlement in South Africa. The Mossel Bay area is of considerable historical significance because of its long history of indigenous settlement before the first European contacts triggered by the arrival in 1488 of Bartholomew Diaz and crew who were in search for a trading sea route for Portugal to India. The nature of the colonial growth of tourism in Mossel Bay and the distinctive tourism economy of the town under apartheid is interrogated. This culminated in the scripting of the controversial 1988 Dias festival hosted to celebrate the opening of ‘apartheid’s last museum’ which occurred before Mossel Bay would experience a radical social transition following South Africa’s democratic elections. Overall, the evolutionary pathways and transitions in the historical geography of this coastal locality are the focus of discussion

Agritourism and local economic development in South Africa

The role of tourism for local economic development (LED) is a topic of critical importance for geographers. In the case of South Africa tourism is a priority sector for national economic development. The significance of research issues around tourism and LED is underlined by the ‘developmental’ mandate of local governments. Although tourism has received attention in a growing body of LED writings on South Africa issues around agritourism so far have been overlooked. Agritourism represents an evolving form of rural tourism which is targeted at mainly urban consumers. Against the background of a review of international scholarship on agritourism this article explores its potential implications for LED planning in South Africa. A national audit of agritourism is presented which shows its uneven geographical distribution. Agritourism is of special significance for small town economic development in South Africa’s intermediate tourism spaces. Policy suggestions are offered for strengthening agritourism as a driver for LED in South Africa

Emergent planning for South Africa’s blue economy : evidence from coastal and marine tourism

Abstract: Ocean-based industries are in focus in terms of expanding debates and planning around the blue economy. Against this backdrop the objective in this paper is to examine contemporary directions in South Africa concerning planning for the blue economy as a whole and more specifically for the sector of coastal and marine tourism. Using documentary analysis of official planning and strategic documents, South Africa’s blue economy strategy, which is titled ‘Operation Phakisa’, is unpacked and critiqued. Attention shifts to examine current directions and challenges of unfolding planning for the expanded development of coastal and marine tourism in South Africa. It is shown that uneven spatial development characterises the existing coastal tourism economy. Arguably, tourism planning is linked to Operation Phakisa which is being challenged for a number of shortcomings, most importantly for prioritising investment attraction and economic growth stimulation over issues about the conservation of maritime resources

How African is the African Journal of Hospitality Tourism and Leisure? An analysis of publishing trends for the period 2011-2018

Abstract: There is a subset of scholarship that relates to analysis of a particular discipline’s leading scholarly journals and their published articles. In the fields of tourism, hospitality and leisure is the appearance and rise of a body of international literature which examines variously the thematic contents, leading individual authors, institutions and citations of journals. In Africa only a limited literature exists about publishing in the field of tourism, hospitality and leisure. This paper offers an exploratory analysis of publishing and in particular of patterns of production and consumption of research articles in the African Journal of Hospitality, Tourism and Leisure. Major attention is given to the African contribution to and of the journal. It is disclosed that the journal has expanded greatly in terms of its published output since 2014. Further, it has established a critical research focus on the tourism, hospitality and leisure sectors in Africa. Although the largest share of contributions are generated from and about South Africa the journal has a reach and impact beyond that country as indexed by the range of other African countries represented in the journal. Arguably, in terms of the consumption of published articles and research in the journal it is disconcerting to reveal the relatively high proportion of articles published in the journal which seemingly fail to attract any citations in other scholarship in the field of tourism, hospitality and leisure

Non-principal surface waves in deformed incompressible materials

The Stroh formalism is applied to the analysis of infinitesimal surface wave propagation in a statically, finitely and homogeneously deformed isotropic half-space. The free surface is assumed to coincide with one of the principal planes of the primary strain, but a propagating surface wave is not restricted to a principal direction. A variant of Taziev’s technique [R.M. Taziev, Dispersion relation for acoustic waves in an anisotropic elastic half-space, Sov. Phys. Acoust. 35 (1989) 535–538] is used to obtain an explicit expression of the secular equation for the surface wave speed, which possesses no restrictions on the form of the strain energy function. Albeit powerful, this method does not produce a unique solution and additional checks are necessary. However, a class of materials is presented for which an exact secular equation for the surface wave speed can be formulated. This class includes the well-known Mooney–Rivlin model. The main results are illustrated with several numerical examples

Mg/Ca ratios in freshwater microbial carbonates: Thermodynamic, kinetic and vital effects

The ratio of magnesium to calcium (Mg/Ca) in carbonate minerals in an abiotic setting is conventionally assumed to be predominantly controlled by (Mg/Ca)solution and a temperature dependant partition coefficient. This temperature dependence suggests that both marine (e.g. foraminiferal calcite and corals) and freshwater (e.g. speleothems and surface freshwater deposits, “tufas”) carbonate deposits may be important archives of palaeotemperature data. However, there is considerable uncertainty in all these settings. In surface freshwater deposits this uncertainty is focussed on the influence of microbial biofilms. Biogenic or “vital” effects may arise from microbial metabolic activity and/or the presence of extracellular polymeric substances (EPS). This study addresses this key question for the first time, via a series of unique through-flow microcosm and agitated flask experiments where freshwater calcite was precipitated under controlled conditions. These experiments reveal there is no strong relationship between (Mg/Ca)calcite and temperature, so the assumption of thermodynamic fractionation is not viable. However, there is a pronounced influence on (Mg/Ca)calcite from precipitation rate, so that rapidly forming precipitates develop with very low magnesium content indicating kinetic control on fractionation. Calcite precipitation rate in these experiments (where the solution is only moderately supersaturated) is controlled by biofilm growth rate, but occurs even when light is excluded indicating that photosynthetic influences are not critical. Our results thus suggest the apparent kinetic fractionation arises from the electrochemical activity of EPS molecules, and are therefore likely to occur wherever these molecules occur, including stromatolites, soil and lake carbonates and (via colloidal EPS) speleothems