The economic potential of small towns in the Eastern Cape Midlands

Small town economic decline has been experienced in many countries across the globe and can be explained through Geographical Economics, particularly the New Economic Geography, which suggests that agglomeration occurs as a natural outcome of high transportation and transactional costs. Yet despite...

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Main Author: Reynolds, Kian Andrew
Format: Others
Language:English
Published: Rhodes University 2009
Subjects:
Online Access:http://hdl.handle.net/10962/d1007492
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spelling ndltd-netd.ac.za-oai-union.ndltd.org-rhodes-vital-10572017-07-20T04:13:27ZThe economic potential of small towns in the Eastern Cape MidlandsReynolds, Kian AndrewSmall cities -- South Africa -- Eastern CapeEconomic geography -- South Africa -- Eastern CapeEconomic development -- South Africa -- Eastern CapeRural development -- South Africa -- Eastern CapeLocal government -- South Africa -- Eastern CapeAgriculture -- Economic aspects -- South Africa -- Eastern CapeSmall town economic decline has been experienced in many countries across the globe and can be explained through Geographical Economics, particularly the New Economic Geography, which suggests that agglomeration occurs as a natural outcome of high transportation and transactional costs. Yet despite the economic rationale behind their decline it is not an economic inevitability and there is evidence of towns in the United States, New Zealand and Canada that have reversed their economic fortunes. [n South Africa approximately 5 million people live in the 500 small towns and many more live in their rural hinterlands where povelty levels are extremely high within a national context. Within this context the thesis examines the current economic status and potential growth prospects of small towns in the Eastern Cape Midlands in South Africa in order to identify critical growth dri vers within small town economies. Five small towns were selected for the study via means of a purposive sample and were subjected to two regional modelling techniques, namely Shift-Share Analysis and Economic Base Theory to determine their current economic trends and past growth patterns, while a Social Accounting Matrix was utilised to identify important sectoral linkages, potential avenues for growth and evident leakages within small town economies. The sampled towns experienced negative economic growth trends between 1996 and 200 I, the primary loss in employment being accounted for by regional economic changes as opposed to national or industrial trends. The decline was more severely felt in primary/industrial sectors of the economy; evidence was found that manufacturing activities declined in all of the centres, despite the industry growing nationally. The Social Accounting Matrix highlighted strong links between the agricultural and services sectors within the national economy. Thus, considering that agriculture was identified as the primary economic driver within the region and the services sector the largest employer in all of the towns it is evident that the economic potential of the towns is to a certain extent linked to the success of agriculture in their hinterlands. Seven growth drivers, namely size, local economic development, existing markets, existing industries, infrastructure, municipal leadership and local entrepreneurs and were linked via means of a scoring framework to the sampled towns' economic potential. Whilst the results of actually determining a towns economic potential are not definitive the study does provide useful insights about the impact and potential role played by these drivers. Linked to this scoring framework and to Cook's (1971) hierarchy of places in the Eastern Cape Midlands four categories of towns were identified in the commercial falming areas and recommendations were made about appropriate developmental interventions at a municipal level, such as the need to retain local entrepreneurs and to invest in social amenities. Considering the evident need for development in rural areas the study provides critical insights into how to prioritise development strategies within small rural towns in commercial farming areas. In addition it would enable municipalities to critically reflect on their municipal Local Economic Development strategies and the relevance within the context of small towns.KMBT_363Adobe Acrobat 9.54 Paper Capture Plug-inRhodes UniversityFaculty of Commerce, Economics and Economic History20092013-07-15ThesisMastersMA192 leavespdfvital:1057http://hdl.handle.net/10962/d1007492EnglishReynolds, Kian Andrew
collection NDLTD
language English
format Others
sources NDLTD
topic Small cities -- South Africa -- Eastern Cape
Economic geography -- South Africa -- Eastern Cape
Economic development -- South Africa -- Eastern Cape
Rural development -- South Africa -- Eastern Cape
Local government -- South Africa -- Eastern Cape
Agriculture -- Economic aspects -- South Africa -- Eastern Cape
spellingShingle Small cities -- South Africa -- Eastern Cape
Economic geography -- South Africa -- Eastern Cape
Economic development -- South Africa -- Eastern Cape
Rural development -- South Africa -- Eastern Cape
Local government -- South Africa -- Eastern Cape
Agriculture -- Economic aspects -- South Africa -- Eastern Cape
Reynolds, Kian Andrew
The economic potential of small towns in the Eastern Cape Midlands
description Small town economic decline has been experienced in many countries across the globe and can be explained through Geographical Economics, particularly the New Economic Geography, which suggests that agglomeration occurs as a natural outcome of high transportation and transactional costs. Yet despite the economic rationale behind their decline it is not an economic inevitability and there is evidence of towns in the United States, New Zealand and Canada that have reversed their economic fortunes. [n South Africa approximately 5 million people live in the 500 small towns and many more live in their rural hinterlands where povelty levels are extremely high within a national context. Within this context the thesis examines the current economic status and potential growth prospects of small towns in the Eastern Cape Midlands in South Africa in order to identify critical growth dri vers within small town economies. Five small towns were selected for the study via means of a purposive sample and were subjected to two regional modelling techniques, namely Shift-Share Analysis and Economic Base Theory to determine their current economic trends and past growth patterns, while a Social Accounting Matrix was utilised to identify important sectoral linkages, potential avenues for growth and evident leakages within small town economies. The sampled towns experienced negative economic growth trends between 1996 and 200 I, the primary loss in employment being accounted for by regional economic changes as opposed to national or industrial trends. The decline was more severely felt in primary/industrial sectors of the economy; evidence was found that manufacturing activities declined in all of the centres, despite the industry growing nationally. The Social Accounting Matrix highlighted strong links between the agricultural and services sectors within the national economy. Thus, considering that agriculture was identified as the primary economic driver within the region and the services sector the largest employer in all of the towns it is evident that the economic potential of the towns is to a certain extent linked to the success of agriculture in their hinterlands. Seven growth drivers, namely size, local economic development, existing markets, existing industries, infrastructure, municipal leadership and local entrepreneurs and were linked via means of a scoring framework to the sampled towns' economic potential. Whilst the results of actually determining a towns economic potential are not definitive the study does provide useful insights about the impact and potential role played by these drivers. Linked to this scoring framework and to Cook's (1971) hierarchy of places in the Eastern Cape Midlands four categories of towns were identified in the commercial falming areas and recommendations were made about appropriate developmental interventions at a municipal level, such as the need to retain local entrepreneurs and to invest in social amenities. Considering the evident need for development in rural areas the study provides critical insights into how to prioritise development strategies within small rural towns in commercial farming areas. In addition it would enable municipalities to critically reflect on their municipal Local Economic Development strategies and the relevance within the context of small towns. === KMBT_363 === Adobe Acrobat 9.54 Paper Capture Plug-in
author Reynolds, Kian Andrew
author_facet Reynolds, Kian Andrew
author_sort Reynolds, Kian Andrew
title The economic potential of small towns in the Eastern Cape Midlands
title_short The economic potential of small towns in the Eastern Cape Midlands
title_full The economic potential of small towns in the Eastern Cape Midlands
title_fullStr The economic potential of small towns in the Eastern Cape Midlands
title_full_unstemmed The economic potential of small towns in the Eastern Cape Midlands
title_sort economic potential of small towns in the eastern cape midlands
publisher Rhodes University
publishDate 2009
url http://hdl.handle.net/10962/d1007492
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