Exploring migrant micro-entrepreneurs’ use of social capital to create opportunity in South Africa’s informal market: A qualitative approach

Abstract

Background: Migrants operating micro-enterprises in rural communities of South Africa is a common phenomenon. These entrepreneurs live in communities they serve, and their enterprises are embedded in the ‘social fabric’ of these communities. Because economic and social value is entrenched in these symbiotic relationships, it fosters the belief that these micro-enterprises hold significant job creation potential. Social capital provides an excellent base to explore this topic in more detail.

Aim: The aim of this study was to explore why migrant micro-entrepreneurs operate enterprises in uncertain environments and how social capital contributes to migrant micro-entrepreneurial opportunity creation when contextualised in poverty.

Setting: The investigation focused on rural communities in two large regions of South Africa, Mahikeng and QwaQwa. Both regions are characterised by a large central hub with several rural villages scattered around it.

Methods: A qualitative research design helped to understand the process of opportunity creation. Entrepreneurs were selected through purposeful sampling to generate the data. Trustworthiness in the data was established by heightening transparency in the research process.

Results: Four themes emerged: life experience, social connections, opportunities and business engagement. Life experience provided insights into why these entrepreneurs operated enterprises in uncertain environments, and the themes collectively showed how these entrepreneurs use social relationships to access resources to create opportunity.

Conclusion: A visual framework and key contributions about how migrant micro-entrepreneurs gain access to resources, how opportunity contextualised in poverty was socially determined and the importance of entrepreneurial engagement provided academic and practical relevance in the field of entrepreneurship.