The Enterprise Observatory of South Africa conducts cutting edge enterprise research by exploring and analysing the relationship between enterprises and localities (space). No locality is from an enterprise perspective a clean slate waiting to be written upon and there are strong regularities that determine entrepreneurial space.
In cities and towns, enterprises occur in patterns with strong systemic characteristics. Similar to the patterns and orbits of regularity in space, our work reveals statistical significant regularities in the enterprise world.
By assembling, analysing and interpreting enterprise data, we observed regularities that are in most instances so strong that they have predictive potential. These can be used to:
- Identify entrepreneurial space and opportunities by sector in localities;
- Assess the causes and development of regional and local disparities and to inform regional policy and regional development measures;
- Assess how business and investment friendly localities are;
- Understand firm dynamics (e.g. enterprise churn) per locality.
EOSA’s findings are in line with those of Robert Axtell who described a power law regulating firm size, Philip Ball (author of Critical Mass) and Geoffrey West (author of Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies). Our work is relevant for:
- enterprise policy formulation,
- program design,
- enterprise financing and risk analysis,
- assisting entrepreneurs in determining locational choice, and
- regional and local development planning.
What is an enterprise?
EOSA’s definition of a formal enterprise is:
a business entity willing to be seen by either the Tax or Local Authority and therefore making its existence known apart from signage on the building or structure from where it operates by listing in directories, websites and smartphone apps