Transformation in South African Tourism: A Geographical Perspective on the Eastern Cape

In the international scholarship about tourism small firms the most distinguishing feature of South Africa relates to transformation debates. This article represents a contribution to the vibrant literature around small tourism firms and change in the global South by analysing the geographies of transformation in one South African province, the Eastern Cape. An historical approach is applied to understand the spatial patterns of transformation as mapped in patterns of ownership of Black small-scale accommodation enterprises. The historical approach shows that different regulatory regimes regarding Black entrepreneurs and their involvement in South African tourism have existed at different times and especially under the influence of apartheid legislation and following democratic change. The formative period of Eastern Cape tourism during the first half of the 20th century witnessed the establishment of a tourism economy dominated by White entrepreneurs and most especially in the coastal areas. The apartheid period, however, allowed a small window of opportunity for Black entrepreneurs to establish tourism businesses in the former ‘reserves’ which would become the Homelands. It is shown that the former Homelands areas are currently the most advanced transformation spaces. This finding reinforces the view that whilst with the end of apartheid the Homelands formally ceased to exist their legacy remains inscribed on the character and geographical patterns of tourism small firm development in South Africa.

Black and White: Access to Capital Among Minority-Owned Start-ups

We used confidential and restricted-access data from the Kauffman Firm Survey and matched administrative data on credit scores to explore racial disparities in access to capital for new business ventures. The novel results on racial inequality in start-up financing indicate that Black-owned start-ups start smaller and stay smaller over the entire first eight years of their existence. Black start-ups face more difficulty in raising external capital, especially external debt. We find that disparities in creditworthiness constrain Black entrepreneurs, but perceptions of treatment by banks also hold them back. Black entrepreneurs apply for loans less often than White entrepreneurs largely because they expect to be denied credit, even when they have a good credit history and in settings where strong local banks favor new business development. This paper was accepted by David Simchi-Levi, finance.

PUSH-PULL THEORY IN BLACK AND WHITE: EXAMINING RACIAL DIFFERENCES IN FIRM STARTUPS BEFORE AND AFTER THE GREAT RECESSION

Although Blacks in the United States suffered disproportionately high unemployment, housing and wealth losses during the Great Recession, little is known about the recession’s impact on Black entrepreneurship. This study uses data from the Panel Study of Income Dynamics (PSID) to estimate the difference in probability of starting a business before and after the recession for Black and White households. While the likelihood of starting a business declined for Whites after the Great Recession there were no statistically significant changes in the rate of firm startups among Blacks. Evidence supports the prosperity pull hypothesis for White but not Black entrepreneurs.

Entrepreneurship and the Racial Wealth Gap: The Impact of Entrepreneurial Success or Failure on the Wealth Mobility of Black and White Families

Research has repeatedly argued that increasing the rate at which Black people start businesses could reduce the racial wealth gap between Black and white families, but increasing the rate of Black entrepreneurship may actually exacerbate the racial wealth gap, due to the economic cost associated with business closure. Using longitudinal data from the Panel Study of Income Dynamics (PSID), we find that, as past work suggests, Black-owned businesses are less likely to remain open 4 years later, compared to white-owned businesses, and that, due to this disparity, Black business owners are more likely to experience downward economic mobility and less likely to experience upward mobility, compared to their white counterparts. These results suggest that improving the rate at which Black entrepreneurs succeed, rather than increasing the rate at which Black people become entrepreneurs, should be the target of efforts to leverage business ownership to reduce the racial wealth gap.

Strategies for Visualizing Cultural Capital

This chapter examines the ways in which the portrait was utilized as a tool for social change as it presented the accumulation of knowledge, skills, and consciousness of Chicago’s black entrepreneurs and became a distinctive form of cultural capital. Positioning themselves as models for emulation, Robert S. Abbott, Jesse Binga, and Anthony Overton generated public campaigns that visualized the dignity, style, and progressiveness essential to the conceptualization of the New Negro. They worked to establish an ethic of representation that countered the unconscionable effacement of civil rights. By patronizing African American artists and publishing their portraits in Chicago’s burgeoning black press, they lent their likenesses toward the formation of a modern collective black identity.

Minority entrepreneurship

The body of literature around minority entrepreneurship has been well established over the past few decades. Research however in the context of the hospitality industry on this topic has been lacking. Therefore a goal of this study was to examine the minority entrepreneur experience in the hospitality industry in order to fill this gap in the literature. Specifically, the purpose of the study was to examine black entrepreneurs. Participants discussed their personal definition of entrepreneurship, the challenges they faced while growing the business, and how they believe race impacted their success as a business owner. Responses were analyzed and future directions identified.