Title: Will Black economic empowerment catalyse South African growth?

Authors: Matthew Andrews

Addresses: Harvard Kennedy School, Harvard University, 116 Rubenstein, 79 JFK Street, Cambridge, Massachusetts, 02196, USA

Abstract: Racial segregation has been South Africa's primary and defining characteristic. Non-whites were disadvantaged because of structures that limited their economic and social opportunities, leaving few from this vast group in the formal economy. Black economic empowerment (BEE and its more recent broad-based version) is a policy intervention driven from the economic and industrial complex in government. Aimed directly at addressing the economy's skewed racial profile, BEE calls the private sector to restructure itself and create opportunities for previously disadvantaged individuals (PDIs). The policy requires change to intra and inter-firm relational patterns of capital and control, personnel selection, promotion and development, supplier selection, enterprise development and social engagement. Organisational theory argues that these kinds of intra and inter-firm relational structures and the networks they establish influence who participates in economies and how these people benefit. This argument supports the contention that BEE's focal changes are necessary to open the economy and adjust its racial composition. If the structures that have entrenched patterns of access to economic opportunities remain static they will not allow inclusion of previously excluded groups. The argument could also be used to view BEE as a potential South African growth catalyst.

Keywords: economic growth; Black Economic Empowerment; BEE; government programmes; South Africa; black people; racial segregation; apartheid; non-white people; structural disadvantage; disadvantaged people; economic opportunities; social opportunities; formal economy; policy interventions; economic complexes; industrial complexes; skewed profiles; racial profiles; private sector; restructuring; previously disadvantaged individuals; intra-firm relations; inter-firm relations; relational patterns; capital; control; personnel selection; promotion; economic development; supplier selection; enterprise development; social engagement; organisational theory; intra-firm structures; inter-firm structures; networks; focal changes; open economy; economic adjustments; racial composition; entrenched patterns; access patterns; economic inclusion; previously excluded groups; growth catalysts; small and medium-sized enterprises; SMEs; entrepreneurs; entrepreneurship; developing nations.

DOI: 10.1504/IJESB.2012.048651

International Journal of Entrepreneurship and Small Business, 2012 Vol.17 No.1, pp.57 - 117

Available online: 09 Aug 2012 *

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