New knowledge needed to revitalise the township economy

4th December 2015 By: Sydney Majoko

About two weeks ago, I had to decide between accepting a rather pricey quote to fix a car door handle from a car dealership in town and searching for a less expensive option in the township. This column has highlighted the need for a database for township businesses, and this particular problem pointed to the urgent need for one.

While panel-beating businesses are common in most townships, one cannot guarantee their workmanship besides word-of-mouth recommendations. After unsuccessfully soliciting verbal quotations for the fixing of the car door handle, I decided to settle on the first quote, but a fellow customer suggested that I try a locksmith not far from the panel beater’s premises. The only reason I went to the locksmith was that the panel beaters had suggested that the entire door panel be removed to fix the door handle. I was not convinced that that was necessary.

I arrived at the locksmith’s just 15 minutes before closing time. After one look at the car door handle that needed to be fixed, the locksmith said he would have it fixed in five minutes. And he did. There was no need to remove door panels. A part of the locking mechanism of the door handle could be removed and the offending object removed without much effort. After ten minutes, I was leaving the business and had saved myself up to 70% of what the dealership in town had quoted me.

This exercise could easily be used to decide against the hit-and-miss nature of dealing with technically inclined businesses in the township economy, but it can be equally used to argue the case for proper documentation of all township businesses that can competently do jobs that require specific knowledge. This might sound like a thankless task, but the high levels of unemployment in the townships require this kind of painstaking support for township businesses. Research is needed to ensure that all efforts to uplift businesses in the townships are focused on achieving the same goals.

While most businesses in the formal economy are located in a demarcated business district, very few of those exist in the township economy. Township entrepreneurs tend to set up business where they perceive the need to be, but, more importantly, where they find space to operate their business. While it is logical for the auto locksmith to be located in the same vicinity as the panel-beating business, spatial considerations in the townships meant that I had to drive a considerable distance to find the locksmith that did a perfect job. His location is not what would be considered a prime location.

All efforts to streamline township businesses will have to take historic considerations into account. Most importantly, though, revitalisation strategies will need to be free of any formulaic approaches to assisting businesses and deal with what is on the ground.

Charman and Petersen, in their paper, entitled ‘Informal microenterprises township context and spatial analysis of business dynamics’, highlight the need for research based solely on the township dynamics to be the only research used in any attempts to streamline the township economy.

“. . . While much research has been done on the informal sector over the past decades, there are still many knowledge gaps relating to the ways in which to support the informal sector and township economies in order to stimulate employment and income growth,” they argue.

It is very tempting to use the one-size-fits-all model when it comes to dealing with businesses in the townships, because, after all, a business is a business. But this would be counterproductive in the case of the township economy.

Charman and Petersen, in the paper quoted above, further demonstrate the inappropriateness of the traditional approach to understanding economic dynamics in the township. They conclude that “policy efforts to support informal enterprises in townships should fully take into account the way that various demand, supply and other factors determine the locational choices of entrepreneurs”.

Great effort must be taken now to grow the knowledge base when it comes to the township economy, so that efforts to fight unemployment can continue to bear fruit.