Whitman School of Management at Syracuse University
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Abstract Details

The Informal Sector, Entrepreneurship, and Economic Development
Vol. Volume 2, Number 2 September/1997

Michael H Morris, Peter Jones and Deon Nel

Michael H Morris is Visiting Professor at the School of Business, Georgetown University, Washington, DC. Peter Jones is Research Associate and Deon Nel is Professor of Marketing at the Graduate School of Business, University of Cape Town, Cape Town, South Africa. An earlier version of this paper won the Journal of Developmental Entrepreneurship Best Paper award at the 1997 World Conference of the International Council for Small Business.

The role of entrepreneurship in economic development has been extensively studied in the richer Western (i.e., first world) countries, but it could be argued that entrepreneurship is even more vital in developing countries. The informal sector in developing countries not only makes a significant contribution towards gross domestic product, but is a major potential source of entrepreneurship. This study explores the emerging nature of the informal sector, and attempts to distinguish entrepreneurial from non-entrepreneurial business activity within the sector. Results are reported of a series of in-depth interviews with tavern owners within South African Black townships. Significant relationships are identified between measures of the entrepreneur's background, the operational sophistication of his/her enterprise, and company outlook.

Keywords: Informal economy, black pub owners, South Africa, entrepreneurship.