http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.20Change: 0.00
R/$ = 11.59Change: -0.03
Au 1196.01 $/ozChange: -0.91
Pt 1198.50 $/ozChange: 1.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Sep 21, 2012

Structural inequality constraining prospective microenterprise sector

Back
Kate Philip discusses how structural inequality has marginalised the entry of microenterprises into the informal sector. Camerawork and editing: Darlene Creamer.
Africa|Environment|Systems|Africa|South Africa|Local Economic Systems|Manufacturing|Systems|Philip|Power
Africa|Environment|Systems|Africa||Manufacturing|Systems|Power
africa-company|environment|systems-company|africa|south-africa|local-economic-systems|manufacturing|systems|philip|power
© Reuse this



Enduring structural inequality, a remnant of the apartheid State, has continued to present the most marginalised of South African society with a major barrier to entry into the micro- enterprise and informal sectors.

Since 1994, structural inequality in local economic systems has not only endured in the South African context but has also been reproduced in newer, more complex ways, says adviser in The Presidency Kate Philip.

“Explanations for South Africa’s underdeveloped microenterprise sector in the face of rampant unemployment have typically focused on the lack of requisite skills and entrepreneurship, the historical exclu- sion of black people, access to credit, issues around ease of market entry and regulation barriers. While these issues are relevant, more attention should be paid to the impact of structural inequality on economic opportunity on the margin,” she asserts.

Philip advocates that three legacies dictate the deeply structural nature of local inequality.

Firstly, the highly concentrated structure of the core economy, with high levels of monopoly, capital intensity and increasing levels of vertical integration, has created what some refer to as two economies – the formal and informal economies.

Secondly, the critical legacy of spatial inequality, which has created ‘apartheid cities’, brings with it considerable economic costs, which are borne disproportionately by the poor.

“The third key legacy is the significant inequality of all human developmental indicators across socioeconomic divides,” says Philip.

These dimensions negatively reinforce each other and have ultimately resulted in the current economic marginalisation.

Capital-intensive industries, a feature of the South African economy, exclude small enterprise participation and are a focus of corrective economic policy mechanisms – such as the introduction of competition policy, the reduction of prospective tariffs, and the formulation of sector strategies – in the core economy.

Moreover, Philip emphasises that it is difficult for smaller enterprises to compete with the manufacturing and distribution power of large-scale producers.

“Branded goods and purchases from branded stores are often the choice of poor people because brands provide a level of quality assurance,” she points out.

Small-scale producers have to compete with price, quality and brand recognition, which is not always possible.

In addition, engaging in formal business- to-business transactions and formal value chains requires a certain degree of business sophistication, which is lacking quite often in the microenterprise environment.

“Any strategy that relies on poor people self-employing their way out of poverty won’t succeed because of the structure of the economy. The bar is simply too high,” Philip warns.

Edited by: Martin Zhuwakinyu
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Video News
More
 
 
Latest News
China appears to have been routinely underestimating output from its sprawling steel sector, with official figures for last year alone 40-million tonnes below a key industry estimate - an amount equivalent to Germany's entire annual production. Beijing has vowed to...
Lumwana, Zambia
Canada’s Barrick Gold Corp will suspend operations at its Lumwana copper mine, in Zambia’s Northwestern province, after the country enacted legislation that raised the royalty rate on openpit mining operations from 6% to 20%. TSX- and NYSE-listed Barrick, the world’s...
The Labour Court in Johannesburg has set aside the 2011-2014 metal sector wage agreement, the National Employers' Association of SA (Neasa) said on Thursday. The 2011-2014 wage deal was the result of an agreement between the Steel and Engineering Industries...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
TO BE PHASED INTO SERVICE The first MeerKAT dish, with another 63 to come
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
MATT BARKER Wireless networks should enable users to engage and must provide relevant information to them based on their activity and location
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks