Abstract
We investigated proportionalities in the enterprise structures of 125 South African towns through examining four hypotheses, (1) the magnitude of enterprise development in a town is a function of the population size of the town; (2) the size of an enterprise assemblage of a town is a function of the town’s age; (3) there are statistically significant relationships, and hence proportionalities, between the total number of enterprises in towns and some, if not all, of the enterprise numbers of different business sectors in towns; and (4) the implications of proportionalities have far-reaching implications for rural development and job creation. All hypotheses were accepted on the basis of statistically significant (p < 0.05) correlations, except for the second hypothesis – the age of a town does not determine the size of its enterprise assemblage. Analysis for the fourth hypothesis suggested that there are two broad entrepreneurial types in South African towns: ‘run-of-the-mill’ entrepreneurs and ‘special’ entrepreneurs, which give rise to different enterprise development dynamics. ‘Run-of-the-mill’ enterprises are dependent on, and limited by, local demand and if there is only a small demand, the entrepreneurial space is small. By comparison, ‘special’ enterprises have much larger markets because their products and/or services are exportable. We propose that the fostering of ‘special’ entrepreneurs is an imperative for local economic development in South African towns.
Highlights
The primary concept considered here – proportionality in enterprise development – was an aspect of the studies of South African towns during the 1960s and 1970s,1,2 but was later neglected. We have revisited it here because of new ideas about economic and regional development that have developed over the past three decades, which touch upon current South African economic development challenges and realities
To examine the third hypothesis, Pearson correlation coefficients and regression equations were calculated between the total number of enterprises per town and the number of sector enterprises per town for each of the 19 different business sectors selected (Table 2)
The exception is provided by Toerien and Seaman[9] who likened enterprise development in South African rural towns to islands rising above the sea and over time being colonised by all kinds of living organisms
Summary
The primary concept considered here – proportionality in enterprise development – was an aspect of the studies of South African towns during the 1960s and 1970s,1,2 but was later neglected. To examine the third hypothesis, Pearson correlation coefficients and regression equations were calculated between the total number of enterprises per town (independent variable) and the number of sector enterprises per town (dependent variables) for each of the 19 different business sectors selected (Table 2).
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