http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.99Change: 0.14
R/$ = 10.61Change: 0.11
Au 1282.74 $/ozChange: -1.43
Pt 1417.50 $/ozChange: -0.50
 
 
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|Systems|Africa|South Africa|Local Economic Systems|Manufacturing|Systems|Philip|Power
Africa|Systems|Africa||Systems|Power
africa-company|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 Economy News
Updated 6 hours ago Ebola is causing enormous damage to West African economies, draining budgetary resources and slashing economic growth by up to 4% as foreign businessmen leave and projects are cancelled, the African Development Bank president said. As transport companies suspend...
South Africa's economy avoided slipping into a recession in the second quarter, as solid growth in the agriculture and financial industries outweighed a hammering in the strike-hit mining sector, data showed on Tuesday. Africa's most developed economy is struggling...
Article contains comments
Trade and Industry Minister Dr Rob Davies
Trade and Industry Minister Dr Rob Davies has urged the public not to make use of so-called “runners”, who claimed that the only way to get a company registered at the Companies and Intellectual Property Commission (CIPC) was to pay them a fee. Responding to...
More
 
 
Latest News
Updated 5 hours ago Construction major Murray & Roberts (M&R) on Wednesday announced a 67% increase in diluted continuing headline earnings a share to 205c for the year ended June, up from the 123c achieved during the prior year. Diluted earnings a share amounted to 305c, up from 245c...
Updated 6 hours ago Ebola is causing enormous damage to West African economies, draining budgetary resources and slashing economic growth by up to 4% as foreign businessmen leave and projects are cancelled, the African Development Bank president said. As transport companies suspend...
Updated 6 hours ago Low-cost pan-African airline fastjet on Wednesday announced that it had established a company in Kenya, which had already submitted its Air Service Licence (ASL) application to the Kenyan Civil Aviation Authority (KCAA). Fastjet held 49% in the new company, fastjet...
More
 
 
Recent Research Reports
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...
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.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
MODDERFONTEIN NEW CITY Modderfontein New City will aim to exemplify an integrated city node and improve infrastructure utilisation through mixed-use spaces
The multibillion-rand development of the Zendai Modderfontein New City, east of Johannesburg, will aim to exemplify an integrated city node, says property group Zendai South Africa COO Wenhui Du. The development will focus on the Modderfontein Gautrain station to be...
The South African Civil Aviation Authority (CAA) hopes to have finalised regulations for the flying of Unmanned Air Vehicles (UAVs) – also designated Remotely Piloted Air Systems (RPAS) and popularly called drones – in the country’s civilian airspace by the end...
Various stakeholders have expressed optimism that the Small Business Development Ministry, created after the national elections in May, will add much needed impetus to enterprise development in South Africa, where a strengthening of the entrepreneurial culture is...
BOB SCHOLES To ensure that emissions plateau by 2020 and then decline until a net negative emission level is achieved by the end of the century, CO2 capture and storage in addition to major emission reduction efforts will be needed
Capturing and storing carbon dioxide (CO2) is the only way through which the world will achieve the lowest of the United Nations Framework Convention on Climate Change’s (UNFCCC) global warming predictions, called the representative concentration pathway (RCP) 2.6....
PARKS TAU Ongoing investigations had identified at least 30 large power users in Johannesburg as having defrauded the city
The City of Johannesburg has recovered R107-million following the arrest of 22 people allegedly involved in corruption, collusion, fraud and tampering with the city’s electricity systems, which had ultimately cost the city R200-million in lost revenue.
 
 
 
 
 
 
 
 
 
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