Academic journal article The Qualitative Report

Street Vending and Competitive Advantage: Towards Building a Theoretical Framework

Academic journal article The Qualitative Report

Street Vending and Competitive Advantage: Towards Building a Theoretical Framework

Article excerpt

Street vending or hawking is whereby people sell in or along the streets. Street vending or hawking plays an important role in the distribution process of most economies. This form of business organization is not new, especially in developing countries like Ghana. In Ghana, street vending or hawking is prevalent both in rural and urban communities, as it is a common phenomenon on the streets, roads highways, etc. In recent years, however, the practice has become more prevalent in urban communities, owing to the surge in unemployment. Every year, secondary and tertiary institutions churn out a number of graduates; meanwhile, only few of them get formal employment. For example, 174461 completed secondary schools in 2012 (Ministry of Education Ghana, 2013) whilst 6131 and 4126 graduated from universities and polytechnics respectively in 2000 (Boateng & Ofori-Sarpong, 2002). According to the Ghana Statistical Service (2014), the unemployment rate among the age group 15-24 was 10.9 % in Ghana and the overall unemployment rate from age 15 and above was 5.2% in 2013. The rate of unemployment in 2013 for people with secondary, post-secondary diploma and university education (bachelor degree holders) was 11.7%, 9.1% and 5.9% respectively. Some of these graduates together with others who might have some kind of education, formal or informal or with no education at all, end up in the informal economy by setting up their own microenterprises. According to Kusakabe (2010) and Tambunan (2009), it is usually the poor who find themselves in the informal sector as a survival or coping strategy in an attempt to make ends meet. The rural-urban drift and the global economic meltdown are also contributory factors to people's decision to go into street vending. The practice is aggravated by the weak welfare systems and the neglect of developing rural areas, (UNICEF, 2004).

Small and medium enterprises (SMEs) include all firms--formal or informal--that their legal status notwithstanding have up to 250 employees. Globally, it is estimated that there are 450 to 510 million SMEs (ILO, 2015). The role played by SMEs of which street hawkers are a part cannot be over-emphasized. SMEs contributed about 85% of total employment growth worldwide between 2002-2010 (de Kok et al., 2011). Also, SMEs' share of permanent and full time employment in 99 countries is about 67% (Demirguc-Kunt & Maksimovic, 2011). In Ghana, SMEs dominate and account for about 92% of all businesses and contribute about 70% to the nation's Gross Domestic Product (GDP) (Abor & Quartey, 2010). Again, it is estimated that nine in ten rural and urban workers have informal jobs in Ghana. De Soto (1989) submits that the informal sector grows because traders try to avoid the cost of formality, which may be represented in strict rules and regulation, taxes, and time and effort involved in complying with formal state procedures. In addition, goods and services are made available to buyers, thereby saving them time used for searching for items or going to the main shops. The informal sector can also serve as a part-time business for people in formal employment. It is also a source of revenue for metropolitan assembly or the local councils, as vendors, for instance, pay daily tolls (taxes).

Street vending has its attendant problems, one major problem being fierce competition from retailers or people with permanent shops or premises. Street vendors normally work under harsh conditions. For instance, they do not have permanent structures and are therefore subject to the vagaries of the weather, (Mitullah, 2003). According to Mitullah (ibid), city authorities persistently harass street vendors. They are always asked to leave the area where they are operating or are relocated to areas where they feel do not promote brisk business. In most cases, they work under insanitary conditions. They are also exposed to overcrowding in the streets, making them susceptible to theft. …

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