South African micro entrepreneurs and resources to overcome entry barriers

Abstract

Since the demise of Apartheid, much governmental effort has been put into the empowerment of historically disadvantaged micro entrepreneurs in South Africa. This has resulted in the Small Business Act of 1996 and the establishment of Ntsika, a government agency that is responsible for implementing empowerment polices directed at historically disadvantaged entrepreneurs. At the time, an ongoing restructuring of Ntsika takes place and SEDA is founded as the new implementing government organisation that is going to replace Ntsika and will be responsible for all policies that are to directed at entrepreneurs. While much research is being done on this subject, there is still ambiguity on the demand for support of micro entrepreneurs. This paper contributes to the understanding of the relation between micro enterprises, entry barriers, government support and resources from a resource based view. It builds on the concept of stretching resources (Hamel & Prahalad 1993). It defines a number of key resources that are needed to overcome entry barriers that are faced by micro entrepreneurs. Two case descriptions from the Cape Town Area provide a practical application of this framework. Adding to the understanding of micro enterprise start up, this paper also will clarify the specific need for support for micro entrepreneurs.