The township (informal) economy: an area level perspective. Summit on Informality and Inclusive Growth Fedesarrollo / DPRU ELLA Programme 4-5th October 2016 The township (informal) economy: an area level perspective. Andrew Charman Sustainable Livelihoods Foundation

A township (informal) economy is emerging. key messages …. A township (informal) economy is emerging. Entrepreneurship is embraced as a means of survival, employment and wealth accumulation. Fluidity between survival, induced and voluntary informality. Most people start in business on their own initiative. Micro-enterprises survive and grow (to a point). There is an entrepreneurship ‘problem: Amplification of businesses is hindered by recourse constraints, entrepreneurial outlook and structural impediments. Misguided policies (and regulation) hamper enterprise development and growth.

9 townships in 4 provinces. our research … Scope Outcomes 5 Years. 9 townships in 4 provinces. Delft South comparative analysis (2010 vs 2015). Map series for each site. Amalgamated Dataset. Academic papers and blogs. Infographics. Spatial studies into market dynamics. Infrastructure design concepts.

research approach…

micro-enterprises and their spatial distribution Financial exclusion (1ATM). No council markets. Transport central to economic inclusion.

different spatial logics…

land dynamics and challenges …

Participation in township economy growing. Large diversity. our findings… Size and Scope Core obstacles Participation in township economy growing. Large diversity. Spatial influences in enterprise distribution / activities. Food and drink sector top. Gaps in the market. Crime. Street trade restrictions. Land access / use rights constraints. Price competition. Police harassment. Licensing restrictions.

Delft South 2010 vs 2015

10,842 micro-enterprise activities. 9,956 micro-entrepreneurs. numbers 10,842 micro-enterprise activities. 9,956 micro-entrepreneurs. 36 per 1,000 people (IP = 55; DS = 21). Top 5 House shops (16%) Shebeens (14%) Spaza shops (11%) Street traders (7%) Take-aways (6%) / Hair care (6%) Food and Drink = 54%. Services = 34%. Micro-manufacturing = 2%.

Land rights, zoning and access for commercial use. policy priorities 1/ … Land rights, zoning and access for commercial use. High streets designated as special zones and provided with a business oriented infrastructure and facilities. Street layout is NB. Broad concessions for street trade and mobile trade. Regulatory barriers minimized to facilitate formalization (through a developmental approach). Specific targets include sectors with high growth potential and sizeable benefits from voluntary informality. spaza shops, shebeens / taverns, transport and service businesses.

Enhance business use of ICT through free data / wi-fi hotspots. policy priorities 2/… Influence the role and function of shopping malls / large retail developments: Mandatory restrictions to accommodate different sizes of businesses, including survivalists. Integrate social and community resources (sports facilities; libraries). Transport sector should be recognized as ‘gateway’ to small-business development: Upscale taxi sector to achieve BRT objectives. Formalise (and legitimize) informal taxi operators. Enhance business use of ICT through free data / wi-fi hotspots. Avoid unsustainable business approaches (such as incentives for cooperatives).

Thank you For further info: www.livelihoods.org.za