These can be understood as “township companies” that are businesses run primarily by township entrepreneurs to meet the needs of town communities and therefore distinguished from those run by out-of-town entrepreneurs.
How big is the township economy?
An estimated 17% of total employment in South Africa is through informal or so-called “township economy.” In countries with high unemployment, the informal sector is a lifeline for countless families who lack formal employment.
The township economy plays an important role:
Employment Opportunities: The township economy can create jobs and reduce unemployment. By supporting local businesses and entrepreneurial activities, it creates employment opportunities for residents who may face barriers to employment in the mainstream sector. This alleviates poverty and contributes to the country's overall economic development. Regional Economic Development: The vibrant town's economy contributes to the overall economic development of the region or country. It stimulates economic activity, encourages investment and attracts resources to previously marginalized areas.
Entrepreneurship and Innovation: Townships are often the hub of creativity, innovation and entrepreneurial talent. By supporting and nurturing local entrepreneurs, the township economy encourages innovation and the development of new businesses. This creates role models that foster a culture of independence and resilience within the community and encourage others to pursue the entrepreneurial aspirations. Social cohesion and community empowerment: A strong town economy can promote social cohesion and empower communities. By providing access to economic opportunities and resources, it promotes a sense of belonging, pride and collective identity among town residents. This could strengthen community networks, increase social capital and improve social well-being. Decrease inequality: Townships are often characterized by substantial income and wealth disparities. A thriving township economy helps reduce inequality by providing opportunities for upward mobility and wealth creation among marginalized communities. This contributes to a more equitable society and reduces the gap between the various socioeconomic groups. Diversification and Resilience: A diverse township economy with a variety of industries and sectors can help create a more resilient local economy. Relying solely on a few industries and sectors makes communities vulnerable to economic shocks. By promoting diverse business and economic activity, the township economy can withstand external pressures and fluctuations in the broader economy.
In summary, the town's economy is important as it can address unemployment, stimulate economic growth, promote entrepreneurship, empower communities, reduce inequality, and contribute to the overall well-being and development of historically disadvantaged regions. According to STATS SA, informal companies usually do not directly contribute to finances through taxes, but provide livelihoods, employment and income to around 2.5 million workers (except agriculture).
The upcoming Township Economies Conference & Expo brings together township companies to explore new growth opportunities, including:
Learn about access to new markets and mainstream economic enterprise supplier development programs, explore business solutions that can be implemented to support business growth meetings with key stakeholders who can help your business develop Discover the latest financial services available to grow your business
The event will take place at the Emperor's Palace from June 20th to 21st, 2023, and more information can be found at www.townshipeconomies.co.za.
