Immigrant entrepreneurship in South African informal sector shops
Date
2015-05-21
Authors
Mabolloane, Lebusa Maurel
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
High unemployment is often highlighted as the one of most significant
impediments to poverty reduction in South Africa. One of the major reasons for
the high unemployment levels is the disproportional dependence of labour
market entrants on formal sector occupations. The South African formal sector
is unable to accommodate the rising number of job seekers in the country and
this has led to the establishment of small informal businesses. Since 2005 there
has been an emergence of immigrant entrepreneurs that have become major
competitors in the South African informal sector, specifically the spaza shop
market.
The purpose of this research was to determine the reasons behind immigrant
entrepreneurs’ entry into the spaza shop market, and to analyse the use of
social and human capital in migrant-owned spaza shops.
The research was completed by conducting a cross-sectional ethnographic
study. Semi-structured interviews where held with immigrant spaza shop
owners from two South African townships. In addition, the researcher immersed
himself in the spaza shop environment by spending several hours observing
each respondents and partaking in the daily activities of the spaza shops.
The results of the study showed that there were various reasons why foreign
nationals opted for entrepreneurship in the spaza shop market. These included
push factors such as limited job opportunities in the mainstream job market,
citizenship requirements and lack of qualifications. Three major pull factors
were recognised as responsible for drawing migrant entrepreneurs into the
spaza shop trade. These factors are: lack of government regulation in the
informal sector, low start-up capital requirements and existing family
involvement in the spaza shop market.
The study also supports the human and social capital theories. Immigrant
entrepreneurs in the South African spaza shop market relied more on social
capital than they did on human capital.
Description
Keywords
Small business ;Informal sector (Economics) ;Immigrants -- Economic conditions;Entrepreneurship -- South Africa.