Entrepreneurship 101: Outsourcing shack building in Africa

I trust that you have had a good holiday. Mine started with an interesting reminder of the entrepreneurial knack of some South Africans. Near Rustenburg, a city not far from Johannesburg, I drove past a man who was selling a selection of ready-made shacks.

On display was the front wall of a tin dwelling, complete with wooden front door and two small windows. Several of these were stacked next to what I assume were options for sides. Some of the big corrugated iron sheets had gaps big enough to allow a window to fit into, while others were simply big pieces of iron stapled to wooden frames.

What made it interesting was that this business venture was in a way out-sourcing the function of building a house in order to enable people who would otherwise have to build a possibly sub-standard shack time to work. And analysts say specialisation of labour can’t happen in the informal economy.

Another area of interest is that this man was finally opening up the construction industry to the so-called “poor”. Where the South African government’s attempts to build low-cost housing to provide free homes to the poor had failed, this man stepped in. Perhaps government subsidising big construction houses to build sub-standard low-cost housing isn’t the answer and should invest in this man instead.