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RURAL ENTERPRISE DEVELOPMENT AS A MEANS TO POVERTY ALLEVIATION by D.C. BODLEY 2020 RURAL ENTERPRISE DEVELOPMENT AS A MEANS TO POVERTY ALLEVIATION by David Cyril Bodley Submitted in fulfilment of the requirement for the degree of PhD Business Management from the Faculty of Business and Economic Sciences at the Nelson Mandela University December 2020 Supervisor: Dr E.J. Zeelie Co-Supervisor: Prof H.R. Lloyd DECLARATION I, David Cyril Bodley (Student number: 215145720), hereby declare that the thesis for PhD Business Management is my own work and that it has not previously been submitted for assessment or completion of any postgraduate qualification to another University or for another qualification. David Cyril Bodley 16 November 2020 ACKNOWLEDGEMENTS I would like to thank my supervisor, Dr. E.J. Zeelie, for his guidance and constant support throughout my journey at the University. I am also appreciative of the wisdom imparted by my co-supervisor, Professor H.R. Lloyd. I would like to thank the people of Geluksburg for affording me the opportunity to conduct research in their community. In particular, I am grateful to Sifiso Mkhize for his immeasurable assistance with organising and co-ordinating learning circle sessions, focus groups and individual interviews. I would like to thank Leon Pienaar for his editorial advice in the compilation of the final dissertation. DEDICATION This dissertation is dedicated to my two children Bronwyn and Kimberleigh Bodley. Pursue what you are passionate about, then persist whilst seeking the best guidance you can. This formula will bring you success and reward. My hope is that this work inspires successful fulfilment of your own passions in life. Abstract South Africa’s disappointing economic performance over the last decade has resulted in a socio-economic crisis, with unemployment and inequality rates being of the highest rates anywhere in the world. Furthermore, unemployment is concentrated among the young, unskilled, and previously disadvantaged population posing a considerable threat to South Africa’s new democracy. Internationally, a method to absorb job seekers into the economy is to make small business the engine-room of economic growth and development. Consequently, the South African Government has identified in its National Development Plan the establishment of small businesses as a priority, including the development of small businesses in rural and marginalised communities. As rural communities in South Africa experience systemic problems such as the lack of infrastructure, financial capital, skills and potential markets, establishing enterprises in rural settings is often more complex than those more advanced parts of the economy elsewhere where fewer constraints exist. This makes the task of establishing and growing rural entities particularly challenging, suggesting bespoke policy and support is required. This study analyses the literature to gain an understanding of economic development theory and how this intersects with and informs small enterprise development policy. It then looks at South Africa’s strategy and policy framework pertaining to enterprise development. Specifically, the literature examines the role of rural enterprise development to establish whether this enables people to move out of poverty or further entraps people in poverty. The study collates data from a rural and marginalised community through observation and interview techniques. Firstly, multiple in-depth interviews were conducted with nineteen entrepreneurs in a rural community to collect data on business opportunities and explore the type of support entrepreneurs would require from government. Secondly, a focus group interview was conducted with entrepreneurs that had i experienced institutional support to understand how well current policy and programmes support rural enterprise development. The primary data was analysed in conjunction with the literature on economic theory and enterprise development using the technique of triangulation to avoid logic leaps and formation of false assumptions. The insights and findings from the analysis reinforced certain facts within the body of knowledge pertaining to enterprise development, but there were also some interesting new insights that emanate from the data. South Africa has been able to introduce a wide range of policy initiatives and has multiple programmes and strategies to support small enterprise development. It has achieved firm success and impetus as well as experiencing certain failures. The study clearly highlights both and makes recommendations to improve policy promoting rural enterprise development as a means to alleviate poverty. ii Table of contents Abstract .............................................................................................................. i Table of contents..................................................................................................... iii List of tables ............................................................................................................. v List of figures .......................................................................................................... vi Chapter 1 Introduction – Research Problem and Research Objectives ......... 1 1.1 Background of the Study ............................................................................... 1 1.2 The Research Problem .................................................................................. 5 1.3 Purpose of the Study ..................................................................................... 5 1.4 Research Objective ....................................................................................... 6 1.5 Scope of the Study ........................................................................................ 7 1.6 Contribution of the Study ............................................................................... 8 1.7 Definition of Terms ........................................................................................ 8 1.8 Synopsis of Chapters .................................................................................. 12 1.9 Summary ..................................................................................................... 13 Chapter 2 Literature Review on Economic Development in Post-Apartheid South Africa ..................................................................................... 14 2.1 Introduction .................................................................................................. 14 2.2 Ideas that have shaped Economic Development Strategy in South Africa .. 14 2.3 Breaking out of a Slow-growth Trap: The National Development Plan ........ 33 2.4 Implications for South Africa’s Contemporary Economic Development Policy ........................................................................................................... 40 2.5 Summary ..................................................................................................... 43 Chapter 3 Literature Review on Small Enterprise Development, Entrepreneurship and Economic Development ............................ 45 3.1 Introduction .................................................................................................. 45 3.2 Entrepreneurship and Economic Development ........................................... 45 3.3 Framework for Small Enterprise Development in South Africa .................... 57 3.4 Implications for Enterprise Development Policy ........................................... 72 3.5 Constraints to Enterprise Development in South Africa ............................... 75 3.6 Summary ..................................................................................................... 98 Chapter 4 Research Design and Methodology ............................................. 100 4.1 Introduction ................................................................................................ 100 4.2 Research Methodology .............................................................................. 100 4.3 Summary ................................................................................................... 120 Chapter 5 Research Findings ......................................................................... 121 5.1 Introduction ................................................................................................ 121 5.2 Findings from Documentation .................................................................... 121 5.3 Empirical Findings in the Setting ............................................................... 129 5.4 Arrangement of the Data ........................................................................... 144 5.5 Synopsis of initial analysis and some key insights from the setting ........... 159 5.6 Summary ................................................................................................... 160 iii Chapter 6 Analysis of Findings ...................................................................... 162 6.1 Introduction ................................................................................................ 162 6.2 Analysis using the Growth Diagnostics Taxonomy .................................... 162 6.3 Summary ................................................................................................... 180 Chapter 7 Conclusion and Recommendations ............................................. 182 7.1 Introduction ...............................................................................................

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