Black entrepreneurship: a case study on entrepreneurial activities and ambitions in a South African township

• Published in: Journal of enterprising communities. Vol. 8; no. 3; pp. 162 - 179
• Main Authors: Preisendörfer, Peter, Bitz, Ansgar, Bezuidenhout, Frans J.
• Format: Journal Article
• Language: English
• Published: Bradford Journal of Enterprising Communities: People and Places in the Global Economy 01-01-2014; Emerald Group Publishing Limited
• Subjects: Apartheid; Developing countries; Economic development; Economic growth; Economic indicators; Employment; Entrepreneurs; Entrepreneurship; GDP; Gross Domestic Product; LDCs; Participation; Population; Self employment; Social capital; Startups; Variables; South Africa
• ISSN: 1750-6204; 1750-6204; 1750-6212
• DOI: 10.1108/JEC-02-2012-0020

Purpose
It is often assumed that the black population of South Africa (mostly living in townships) has a low participation rate in entrepreneurial activities and a low level of entrepreneurial ambitions. Based on an empirical case study of a single township, the article investigates the current self-employment rate as well as entrepreneurial intentions of the township’s population. Besides the level of entrepreneurship, personal and socioeconomic factors affecting participation in entrepreneurship are explored.
Design/methodology/approach
The article uses a face-to-face survey of about 350 adult residents of the township under investigation.
Findings
Contrary to the common assumption, entrepreneurial activity, which also includes all kinds of informal business ventures, cannot be qualified as low in the township under investigation. The same holds true for entrepreneurial ambitions, that is, people’s intentions to start their own business in the near future. The factors influencing the probability of self-employment are similar to what we know from many other studies in the field of entrepreneurship. Socio-demographic attributes (gender, age), human capital factors (schooling, health), and social network resources (membership of organizations, self-employed friends) are significant predictors of entrepreneurial activity. It proves to be difficult, however, to explain who in fact articulates entrepreneurial ambitions.
Practical implications
The findings show that the basic prerequisites for expanding black entrepreneurship in South Africa are in place. Politically, it seems appropriate to initiate more public support programs for black entrepreneurship since such programs can help to translate entrepreneurial ambitions into action. However, to stay realistic, the contribution of entrepreneurship to overcome the structural problems of deprivation and poverty of the black population of South Africa should not be overestimated.
Originality/value
The article is based on a careful survey in a township using a random sample. Given the rare access to a disadvantaged township community, the result that there is no evidence of a “lack of entrepreneurial impetus” deserves scientific and political attention.