Volume II - The Northern Cape Provincial Spatial Development ...

Probably the most prominent requirement for urban change and development is the capacity
for management and leadership by means of productivity, new strategies, new technologies
and capital investment. The quality of the human resource base and associated behaviour
patterns and leadership are important factors that can influence the growth energy of a town.
Individuals, entrepreneurs, companies and government institutions have the ability to stifle or
stimulate the growth of a settlement through their decisions. The three imperatives of
sustainable development (economic viability, social equity and ecological integrity) are
equally relevant in this regard. The strong link between the development of small towns, the
environment and the types of agricultural development and land tenure structures should also
be incorporated.
The most fundamental growth regulator of a town is its economic base. The basic driving
force behind a town’s growth is provided by its economic activities, which generate job
opportunities, capital investment and infrastructure. (Hoyt, 1939; Smith, 1965; Carter, 1981;
Hartshorne, 1980; Cheshire, 1990; Markusen & Gwiasda, 1994; Badcock, 2002; and Pacione,
2001).
The diversity of economic activities (mixture of industrial, service and business composition),
represented in a town usually holds the key to how well the urban economy performs. The
functional classification of towns offers a very useful analytical instrument that can help to
explain why settlements with a certain economic profile perform well or poor. (Cheshire
1990; Markusen & Gwiasda 1994). From a conceptual perspective it is important to refer back
to the export base theory, which states that job opportunities will increase most rapidly in
those towns that can extend their comparative advantage by the production of goods and
services for which there is the greatest demand on the world and national market. The extent
to which an enterprise or economic activity can render a service and make sales outside of the
town can be regarded as a measure of its contribution or importance to the growth of the
settlement. Such activities bring new capital into circulation in the town by attracting it from
outside – the so-called primary, propulsive, external or basic activities. Other activities are
geared more towards meeting the needs of the local inhabitants and thus simply keep capital
that is already in the town in circulation. This means that the existing situation is maintained
without new growth – the so-called secondary, service, internal or non-basic activities. If the
basic activities of a city expand, a chain reaction (multiplier effect) takes place, which also
increases non-basic activities and thus leads to growth in the town. The basic/non-basic ratio
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