An assessment of the motivations, operations and competitiveness of local migrant informal sector entrepreneurs in Polokwane local municipality

Abstract

In recent years, South Africa has been experiencing slow economic growth. This has resulted in high unemployment levels, especially among the youth, who are the most economically active and therefore in need of occupations. Without jobs, the majority of the urban poor have resorted to taking part in the informal sector as part of their livelihood strategies. In addition to this environment of high unemployment and acute poverty levels, an increasing number of migrants who have been unable to find employment in the country have also gravitated to the informal sector to make a living. This has set up fierce competition between local and migrant entrepreneurs, which, in some cases has resulted in the outbreak of violence and the destruction of foreign-owned business. This destruction has been linked to accusations that migrant businesses have advantages over locals and that they engage in anti-competitive trading behaviours. It is against this background that this study assesses the motivations for doing business in the informal sector, the operations of the businesses, as well as the competitiveness of the businesses operated by local and migrant entrepreneurs. Polokwane CBD and Seshego Zone 2 in Polokwane Local Municipality were chosen as the study areas. To carry out this study, a quantitative research design was adopted. It involved the use of mapping and the administration of a standardised questionnaire for field data collection. Study results show that the motivation for starting a business contributed very much to the success or failure of the business. Local and migrant informal sector entrepreneurs were found to be operating differently: most migrant informal sector entrepreneurs were operating as a team and sharing business strategies, costs and advice while local entrepreneurs operated primarily as individuals, without much recourse to shared information or advice. In addition, migrant entrepreneurs were stocking their goods in bulk which enabled them to sell their products and services at lower prices as possible. Future research is needed within the informal sector entrepreneurship of local and migrant. entrepreneurs so that their contribution to the economic growth of the country could be clearly understood and measured. Key words: Informality; Entrepreneurship; Migrants; Informal Economy; Informal Business; Motivation