The enduring and spatial nature of the enterprise richness of South African towns

Abstract

Enterprise richness (measured by the number of enterprise types) showed a statistically significant log-log relationship (or power law) with the total number of enterprises in (1) towns in different regions of South Africa and (2) towns in the same region but seven decades apart. Entrepreneurial space in towns develops or disappears in a regular way as towns grow or regress, which is further proof of orderliness in the enterprise dynamics of South African towns. The power laws are very similar to one another, which was powerfully illustrated by the fact that one relationship extracted from seven-decade-old information could accurately predict the enterprise richness of modern towns in South Africa. The enterprise richness power law of towns in South Africa extends over space and time. Recent reviews of research on small towns and local economic development in South Africa have ignored the orderliness detected in their enterprise structures. Islands have provided laboratories for the study of natural evolution and the MacArthur–Wilson Species Equilibrium Model based on island biogeography was a main contributor to progress in ecology. Research on regional economic geography in South Africa should move beyond the merely descriptive/narrative to more quantified research. In considering the lack of employment and poverty in South Africa, the National Development Plan suggests that towns and rural areas are important cogs in efforts to overcome these problems. Development plans that are out of sync with the observed regularities are perhaps bound to fail.

Productive knowledge, poverty and the entrepreneurial challenges of South African towns

“…A range of regularities, which have been interpreted in terms of entrepreneurship, have been recorded in the enterprise dynamics of South African towns. [4][5][6][7][8][9][10][11][12][13][14][15][16] These include statistically significant linear regressions between the population and total enterprise numbers in South African towns 4-10 and can be stated as:…”

Power laws, demography and entrepreneurship in selected South African regions

“…Given the statistically significant relationships between population sizes and enterprise numbers frequently recorded for South African towns, [7][8][9][10][11][12][13][14][15][16][17][18][19] it is clear that town size (measured by the population number), the creation of jobs, and thus enterprise numbers and entrepreneurial decisions, have similar variance patterns. It is, therefore, also necessary to examine if the enterprise numbers of regions have Pareto rank-size distributions.…”

“…This result is not unexpected given the often-observed linear relationship between population sizes and enterprise numbers of South African towns. [7][8][9][10][11][12][13][14][15][16][17][18][19] If the rank-size population distribution of towns in a region is described by a power law, the enterprise number rank-size distribution of the region should exhibit the same pattern. The ratios observed for the enterprise distribution of the three regions indicate that lower-ranked towns in the three regions have from 50% to over 60% of the enterprises of the towns ranked just above them (Table 5).…”

“…[7][8][9][10][11][12][13][14][15][16][17][18][19] Previously, linear relationships between population and enterprise numbers and enduring power law relationships between total enterprise numbers and the enterprise richness (total number of enterprise types) of South African towns 15,19 were recorded. This study recorded log-log agglomeration patterns for the population and enterprise numbers of regional towns.…”

“…Considering the above warning 4 and the implications reported for municipalities 5 , it is necessary to investigate the possible presence of Pareto (Zipf-like) population and/or enterprise distributions in the towns of South African regions. The presence of linear regularities (proportionalities) in the form of statistically significant correlations between the demographic and entrepreneurial characteristics of South African towns [7][8][9][10][11][12][13][14][15][16][17][18][19] could signal the possible presence of Pareto rank-size distributions in regions.…”