Economic Studies

The term “social fabric” embraces numerous complex and interrelated phenomena, including demographic and economic factors, behavioural issues (e.g. investment choices, political dynamics), social institutions (e.g. families), social organisations (e.g. municipalities and churches), and social networks, or relationships amongst people. The social fabric is underpinned by people’s beliefs and sentiments, including a sense of belonging and identification with a particular social unit.

This document, as well as the full CSIR report can be accessed at http://seasgd.csir.co.za/scientific-assessment-chapters/

Shale gas development (SGD) has the potential to yield highly significant economic opportunities, but also bears risks engendered by the extractive nature of SGD. In both respects it parallels other divisions of the mining sector.
Previous South African research into the macro-economic opportunities associated with SGD reveals little agreement on likely benefits, their extent, or the appropriate mechanisms for their measurement. Despite this ambiguity and uncertainty, certain aspects are clear. Highly positive impacts on the balance of payments can be expected from SGD irrespective of whether they come in the form of import substitution alone or combined import substitution and export growth. If the large scale production scenario (Big Gas) is assumed, gas revenue could be equivalent to between 8% and 16% of the current account deficit thereby making a potentially substantial contribution to deficit alleviation. This has the potential to precipitate exchange rate appreciation. It is not, however, possible at this stage to predict the likelihood of such an appreciation or whether it would have potentially damaging effects on other sectors1.

 

This document, as well as the full CSIR report can be accessed at http://seasgd.csir.co.za/scientific-assessment-chapters/

Economic decline and gentrification in a small town: the business sector in Aberdeen, Eastern CapeDoreen Atkinson  Development Southern Africa, Volume 26, Issue 2 pp. 271-288 | DOI: 10.1080/03768350902899595

 

Abstract

Small towns are a neglected topic of study but they are gaining importance in South Africa because of rapid urbanisation. This paper discusses a case study of business development and gentrification in Aberdeen, a small town in the Eastern Cape’s Karoo. Although there has been a long-term decline in Aberdeen’s economy, major changes are now taking place that call for more focused development policies. The findings of a 2006 business survey in Aberdeen are presented here and integrated with findings from the international literature on small town development. The paper shows that endogenous development of a small town’s economy by its business sector can lead to some local economic growth; however, it needs to be assisted by judicious government investment. Aberdeen’s economy will need a stronger level of municipal guidance to exploit its strengths and overcome its limitations.

 

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Doreen Atkinson and Mark Ingle  “A multi-dimensional analysis of local economic development in Graaff-Reinet, Eastern Cape”, Journal for New Generation Sciences, vol. 8 no. 1, 11-28.

 

Abstract

This article presents the results of a business survey conducted in the Great Karoo town of Graaff-Reinet. The survey solicited the views of business owners on a range of economic issues. The findings also draw on a number of in-depth Midlands-Karoo studies, carried out in the early 1970s, in order to add nuance to the prevailing understanding of the factors that influence local economic development (LED) in small towns. It is argued that LED is a multi-facetted phenomenon. It requires a holistic approach that recognises its inherent complexity, involving factors such as local leadership, diversification, the local skills base, in-migration, corporate investment, and entrepreneurship.

 

Can be accessed at the website of the Journal for New Generation Sciences, http://reference.sabinet.co.za/document/EJC83574

 


 

Etienne Nel, B Taylor, T Hill, D Atkinson “Changes in small towns in South Africa’s Karoo: Looking from the inside out”. Urban Forum, published online, 17 August 2011.

 

Abstract

This article seeks to situate the experience of demographic and economic change in South African small towns within a broader context. Drawing on international literature detailing demographic, economic and racial changes within small towns, the paper relates these trends to the Karoo region in South Africa. The research findings reveal that small towns in the Karoo are experiencing selective demographic and economic growth, which particularly favours the larger small towns. There is clear racial differentiation in the growth which is taking place and, contrary to predictions made in the 1970s, small towns in South Africa are not all experiencing absolute decline.

 

Can be accessed at: http://link.springer.com/article/10.1007/s12132-011-9131-z

 


 

Toerien DF and Seaman MT  Proportionality in enterprise development of South Afrian towns. SA Journal of Science 108: 1-10.(2012)

 

Abstract

Two concepts, (1) companies are ‘living’ entities and (2) ‘company ecology’, stimulated our hypothesis that towns are ‘enterprise ecosystems’. This hypothesis cannot be tested directly. However, if it is correct, application of clustering and ordination techniques used frequently in studies of natural ecosystems, should reveal clusters of towns that are statistically significantly different (p < 0.05). A dataset of 47 towns in the Karoo, South Africa served as study material and their enterprise assemblages were profiled through the use of a simple method based on the examination of telephone directories. Clustering and ordination techniques revealed six different clusters of towns at a correlation coefficient level of 0.65 and the clusters differed significantly (p < 0.05) in some respects. The agricultural products and services, the tourism and hospitality, and the trade sectors were particularly important in defining these clusters. We concluded that enterprise ecology is a valid concept and towns are ‘ecosystems’ that also cluster together in larger groupings. An array of potentially important techniques and approaches for the study of business development in towns now provide support to, and intriguing questions confront, academic and practical researchers of enterprise development in towns.

 

Accessed at: http://www.sajs.co.za/enterprise-ecology-towns-karoo-south-africa/toerien-daan-seaman-maitland

 


 

Toerien, DF (2014), Enterprise richness as an important characteristic of South African towns, South African Journal of Science, November/December.

 

Abstract

Towards the end of the 20th century there were almost 500 small towns of fewer than 50 000 persons in South Africa, accommodating about one tenth of the country’s population. Little was known or said in national debates about the future of these places. A decade later this situation had changed and many studies have been or are being undertaken on small towns. For instance, the South African Government recognised that to stem the continued migration from rural to urban areas, a different approach was needed to economic development in rural municipalities and a ‘Small Towns Regeneration Project’ was initiated. Concerns about a perceived decline of rural towns also stimulated a quest to develop or find methods and/or measures to monitor the well-being of towns. Elsewhere in the world, small and medium enterprise ‘observatories’ were established to study and report on all aspects of small and medium enterprises, an approach recently followed in South Africa. New ways are needed to improve our understanding of the enterprise dynamics of South African towns. In this contribution, we examine the potential utility of the enterprise richness (i.e. the number of enterprise types) of South African towns and show that enterprise richness has a strong and fully quantifiable relationship with the total number of enterprises in the towns. This contribution adds a new dimension to the capability to make predictions about the enterprise structures of South African towns.

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Toerien, DF (2012), Prince Albert: A fourth economic bubble or sustainable development? R Donaldson and L Marais (eds), Small Town Geographies in Africa:  Experiences from South Africa and Elsewhere, Nova Press, (2012).

 

 

(Author contact: dtoerien@gonet.co.za)

 


Toerien, DF and MT Seaman, MT (2012), Regional order in the enterprise structures of selected Eastern Cape Karoo towns, South African Geographical Journal, vol. 94, no. 2. (2012)

 

Abstract

Proportionality phenomena have earlier been observed in the enterprise structures of South African towns. A question remained whether small towns also exhibit such hidden order. Twelve towns of the Eastern Cape Karoo served as a case study to examine this. Towns’ enterprises were identified, enumerated and classified into different business sectors. Statistical analyses were used to examine six hypotheses regarding the question. Older towns enjoyed first-comer advantages in enterprise development, and this did not stem from the original nature of these towns. Small towns were not necessarily laggards in all business sectors or vice versa. They had lower enterprise diversities than large towns, irrespective of whether diversity was based on enterprise types or functional groups. Enterprise diversities could be predicted accurately for large and small towns. Multivariate clustering of towns on the basis of enterprise structures indicated that large and small towns were not the separate homogenous groups believed earlier. Regional proportionalities, i.e. fairly constant ratios between business sector enterprise numbers and total enterprise numbers in the towns, were used to construct a ‘regional enterprise structure’. This allowed assessment of the strengths and/or weaknesses in enterprise development of individual towns and the Karoo region of the Eastern Cape.

Can be accessed at: www.tandfonline.com.

 


Toerien, DF and Seaman, MT (2012), Proportionality in enterprise development of South African towns, South African Journal of Science, May/June.

 

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.

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