Black Entrepreneurshipand

Informal Housing

South Africa

Laws Inhibiting Black Entrepreneurship

Colonial Era : Serfdom? Apartheid : Separation State monopolies

Cultural Factors Inhibiting Black Entrepreneurship

Traditional/Rural sanctions against wealth accumulation

Considered “legitimate target” of theft and violence

Police raids and intimidation For black graduates, civil service is a safer

choice

Seven Categories of Black Entrepreneurship

Listed Companies : “Black Chips” Heavy ownership by unions Formed Preemptively by white companies Spinoffs of less profitable operations Joint venture by industry to create a

competitor

Seven Categories of Black Entrepreneurship

Potential Listed companies Often politically connected Often Joint Ventures with foreign

companies

Seven Categories of Black Entrepreneurship

Portfolio Investment Trusts Also heavily union funded Buy companies as well as stocks

Seven Categories of Black Entrepreneurship

Black Women Investors Same as PITs, but funds raised from

women Possible rural focus : agriculture, tourism

Seven Categories of Black Entrepreneurship

Medium, Small, and Micro Enterprises 200 or fewer employees Most formed during apartheid, to provide

services to black townships Sectors: taxi, retail, construction, garment

manufacture Only 20% are growing businesses

Seven Categories of Black Entrepreneurship

Informal Sector Often food-related Low barriers to entry Immigrant competitors

Seven Categories of Black Entrepreneurship

“Political Entrepreneurs” Often a partnership with foreign investors Partner brings no business experience Qualifications : prison time Sectors : franchising, technical contractors Some supported by USAID

Top Down vs Bottom Up Top Down : replace white managers,

owners, directors on a “quota” basis Problem : corruption Problem : whites still needed for technical

functions 1994 example : 14,000 accountants

(65 black accountants)

Top Down vs Bottom Up Bottom Up : government support for the

informal sector Problem : hyper-competitive environment Problem : insufficient education to manage

a larger enterprise

Top Down vs Bottom Up Editorial “Expand the pie” What will it take to attract foreign

employers? How can a small or medium enterprise

increase its employment?

EducationQuantity vs. Quality

South Africa Malaysia

No Education 29% 27%

Some Primary 11% 16%

Full Primary 19% 21%

Some Secondary 26% 20%

Full Secondary 14% 14%

Degree 1.6% 1.3%

Adult Literacy 46% 74%

Cato ManorHistory

1930s partitioned by Mr. Cato, who sold lots to Indians

After WW2, Indians sublet to black tenants 1949 violence between tenants and Indians 1950s / early 60s bulldozed, zoned for

white development

Cato ManorHistory

Development halted by CMRA, an organization of former Indian owners

Unoccupied until late 1980s, when squatters moved in

1990s influx : close to city center 1990s influx : ANC stronghold safe from

Inkatha - ANC violence

Pictures from Cato Manor

Pictures from Cato Manor

Cato Manor Development Association

Concentrated building efforts on unoccupied land

Mistrusted in squatter settlements due to corruption

CMDA would lose jobs if project complete Embezzlement, selling lot numbers,

nepotism

The Taxi Wars Taxis initially reluctant to service area Profitable route due to short runs Taxi service taken over by 15-20 former

ANC guerillas Extortion of residents for “protection” Driven out by former taxi outfit and locals All community structures destroyed

Habitat for Humanity Houses in Cato Manor

Suspicious Charactersin Cato Manor

“In Situ” Upgrading of Informal Settlements

Applying a Brazilian model to Cape Town Both: cities are largely formal with

peripheral informal settlements Both: technical professionals available for

GIS implementation Brazil: informal settlements built of more

permanent materials

Bureaucracy Black and white councils (transition period) City, metropolitan, and provincial

governments Duplicate political and administrative

positions Delays of 18 months to 4 years Reluctance to adopt the “In Situ” concept

Rural Zulu Housing

Rural Sotho Housing

Rural Government Housing

Urban Informal Settlement

GIS Allows rapid updates in dynamic situations Design access network for foot traffic Visual demonstration for those in flood area Existence of a “formal” plan reduces

resistance by neighbors Lot number on a plan gives feeling of

security to residents

Flooding in Cape Town?