Policy Brief – January 2012 Author: A supply side intervention in support of local economic development (LED)

The role of local economic development (LED) represents policies to redress the economic marginalisation and dualism in the South African economy as a result of the legacy of apartheid in which economic activity was concentrated in certain areas at the expense of rural development, in particular in the former homelands. LED further aims to address various market failures which have contributed to high unemployment rates, low levels of income and wide spread poverty, including the often cited lack of entrepreneurial activity in South Africa, weak support mechanisms for small firms, lack of access to financial and business development services, as well as spatial marginalisation. The lack of economic development in many areas where marginalised individuals live means that large financial resources are spend on transport costs to not only buy goods but also to search for employment.

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