Enterprise richness as an important characteristic of South African towns

Abstract

Towards the end of the 20th century there were almost 500 small towns of fewer than 50 000 persons in South Africa, accommodating about one tenth of the country’s population. Little was known or said in national debates about the future of these places. A decade later this situation had changed and many studies have been or are being undertaken on small towns. For instance, the South African Government recognised that to stem the continued migration from rural to urban areas, a different approach was needed to economic development in rural municipalities and a ‘Small Towns Regeneration Project’ was initiated. Concerns about a perceived decline of rural towns also stimulated a quest to develop or find methods and/or measures to monitor the well-being of towns. Elsewhere in the world, small and medium enterprise ‘observatories’ were established to study and report on all aspects of small and medium enterprises, an approach recently followed in South Africa. New ways are needed to improve our understanding of the enterprise dynamics of South African towns. In this contribution, we examine the potential utility of the enterprise richness (i.e. the number of enterprise types) of South African towns and show that enterprise richness has a strong and fully quantifiable relationship with the total number of enterprises in the towns. This contribution adds a new dimension to the capability to make predictions about the enterprise structures of South African towns.