Abstract
Localisation strengthens local economies through self-sufficiency, resilience, and community cohesion, by reducing reliance on non-local markets and by promoting local job creation. Due to the informal nature of many businesses and the subsequent lack of complete data, quantifying localisation within South Africa's township economy is challenging. To identify and evaluate the prevalent elements of localisation within the township economy context, this technical research project develops and applies a quantitative framework to measure the extent of localisation. To adequately measure localisation, it is essential to determine which variables best represent localisation. For this reason, the study begins by identifying appropriate variables and employing principal component analysis (PCA) to select the variables that best represent localisation using the 2013 wave of the Surveys for Employers and Self-Employed series dataset for Thokoza township. The study analysed variance (ANOVA) to determine variability in employment between the different sectors of the Thokoza township which allowed the researcher to identify employment-dense sectors. This identification is beneficial for local communities because it allows local governments to focus resources and policy efforts on supporting and expanding sectors that are less employment-dense. The study found that Thokoza is a moderately localised area, suggesting that the township has little local economic integration and self-sufficiency making it reliant on non-local markets and resources for development. The study also finds that there is no variability in employment between sectors. In light of these findings, the study suggests implementing programmes that assist in expanding local businesses across different sectors, improving local skills development, and creating local supply chains to improve localisation. Improved localisation will lead to enhanced township economic resilience, reduced environmental damage, and stronger community ties through the support of local businesses and production.