Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)


Proposed Strategy for Micro-Enterprise Development A Case of Immigrants and Locals in Tembisa and Ivory Park

Author(s): Francinah L Phalatsi and Bulelwa Maphela

Spaza shops, which are ‘small convenience stores’, play an integral part in many township economies within low-income earning societies in South Africa. These micro-enterprises act as providers of basic groceries and home essentials to those societies. Recent studies and reports show that there has been a dwindling case of South African-owned spaza shops, while those operated and owned by foreign nationals are reportedly growing and increasing in volume in certain township areas. Trade practices such as ‘coopetition’ – the use of social networks and collaborating with competition – has been cited as the differentiating factor that gives foreign national spaza shop owners the competitive advantage. Aim: The purpose of this study was to explore how local government can assist South African-owned spaza shops to be sustainable and grow through the local economic development (LED) agenda. The aim, therefore, was to create a practical strategy for LED practitioners to enable competitiveness and promote the sustainability of South African spaza shops in the Tembisa and Ivory Park townships within the Ekurhuleni and City of Johannesburg municipalities. Methods: A concurrent mixed-method design was deemed appropriate, using both a survey questionnaire and semi-structured interviews to collect primary data. Through corroborating insight, lessons and results of trade practices and the notion of coopetition by foreign-owned spaza shops were explored. Results: Key findings showed that coopetition is a myth, and foreign nationals use social networks to their advantage in running sustainable spaza shops and dominating the market. Foreign national citizens indeed dominate the spaza shop market, yet this is not evident in local government’s plans, as proven recently by gaps identified during the COVID-19 relief plans. Lastly, socio-economic challenges such as unemployment and crime persist, with spaza shopsnot predominantly employing South Africans as literature would suggest. Conclusion: The paper concludes with a call for active and intentional engagement by local government and LED practitioners. A pragmatic participatory “bottom-up” approach is recommended through the efficient use of systems thinking, coupled with a two-pronged approach to policy that addresses having a regulatory approach for fair and standard business frameworks and relevant key stakeholder engagement.

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