Drivers of the perceived differences between Somali and native entrepreneurs in South African townships

Using a triangulation of three research methods led by an exploratory intent, the investigation was lodged into the informal businesses conducted by the Somali and native South Africans in a local township; its pervading intention to seek out similarities or differences between both groups. The survey questionnaire, personal interview and focus group discussions were the preferred data collection tools. Unsurprisingly perhaps, the results suggest that there are more differences between both groups than there are similarities. While the areas of similarities included issues confronting all businesses in the township such as legislation and crime, the authors believe that the differences contribute to the perceived competitive advantage accorded Somalis, hence, the tension between both groups. On the one hand, the inter-group differences that worked in favor of Somalis included the fact that because of the factors influencing their displacement, their need to succeed was exaggerated from the onset: they prove to be younger, more motivated, harder working, co-operative and charge less – the combination gives them an undeniable competitive edge. On the other hand, the natives have the following factors in their favor: they pay less rental or none, are more educated, depict a higher level of business training, as well as prior business experience. Though the anecdoctal evidence does not guarantee an accurate prediction of who has the competitive advantage, it, nonetheless, supports the view that labor market discrimination and the fueled desire to survive gives immigrants the motivation to succeed in entrepreneurial ventures in the host country.

Keywords: immigrant entrepreneurs, informal trading, South African townships and xenophobia.
JEL Classification: M1