Browsing by Author "Davidson, Abigayle"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Entrepreneurship in South Africa's townships: ecosystem challenges and recommendations for the path forward
    (Aspen Network of Development Entrepreneurs (ANDE), 2024-02) Kim, SangEun; Davidson, Abigayle
    South African politicians frequently refer to entrepreneurship as a potential solution to the economy’s significant unemployment problem.1 For instance, Lebogang Maile, a Member of South Africa’s Executive Council for Economic Development, shared his projection that entrepreneurship will generate 90% of all newly created jobs in the South African economy by 2030.2 The South African government provides various support to bolster small business activity, including business development support (BDS) services and funding, with the country’s Small Enterprise Development Agency (SEDA) serving as the focal point for these endeavours. In reality, many entrepreneurs need to come from townships. Out of the country’s population of 60 million, 22 million South Africans live in townships and informal settlements, accounting for 38% of the country’s working age citizens.3 Moreover, while the country’s unemployment rate remains at a staggering rate of over 30%,4 the unemployment rate in townships (60%) poses an even greater challenge to the economy.5 Numerous reports address challenges faced by South African entrepreneurs.6 A smaller set of literature focuses specifically on entrepreneurial activity in the townships. ANDE’s 2021 South Africa Township Economy Entrepreneurial Ecosystem Snapshot and the associated report contribute to this literature, illuminating some of the primary challenges and opportunities facing entrepreneurs in townships.7 This narrower investigation of the unique characteristics of entrepreneurship in the townships illuminates that while the nature of the challenges confronted by township entrepreneurs may share many similarities to those in the rest of the country, they are more pronounced and, therefore, require their own investigation. What distinguishes this report from extant studies, including the ANDE’s 2021 report, is that this report features the voices of entrepreneurs and entrepreneur support organisations (ESO) to vividly portray township entrepreneurs’ challenges through in-depth interviews. This report also aims to elucidate the factors that contributed to the success of exemplary township entrepreneurs despite existing challenges and other strategies that ESOs can employ to guide more entrepreneurs to emulate these success stories. The subsequent sections are organised as follows. The next section describes key concepts and research methodology, highlighting the definition of township businesses and interviews utilised throughout this report. Subsequently, this report scrutinises challenges faced by township entrepreneurs based on the interviews and then explores success factors that have enabled township entrepreneurs to lead profitable and sustainable businesses. Lastly, the report concludes with recommendations for different stakeholders in the township entrepreneurial ecosystem, including entrepreneurs, investors, BDS providers, and the government.