Entrepreneurial activity in the Third World informal sector: The view from Khayelitsha

Extensive attention has been given in recent years to the role of entrepreneurship in facilitating global economic development, with research indicating that much employment growth originates from the “entrepreneurial sector” of the economy. In many parts of the world, emphasis has also been placed on the so‐called “informal sector” (comprising all activities that fall outside the formal net of registered, taxed, licensed, statistically documented business enterprises) as a contributor to the economic welfare of society. Aims to explore further the nature of the informal sector, and specifically, to distinguish entrepreneurial from non‐entrepreneurial business activity within this sector. Describes the results of a series of in‐depth interviews with owners from a cross‐section of small businesses located in a black South African township. Identifies a sub‐group of firms that demonstrate relatively strong entrepreneurial orientations and distinguishes this group from the remainder of the sample. Draws implications for theory development, ongoing research, and public policy.