The Second Economy of South Africa
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The unstable and weak state of many economies worldwide over the last few years has prompted a lot of people to think about replacing current economic models with something else.
This is not really a new phenomenon, though. For several decades now, possibly even as far as a century back depending on the specifics you include, there have been calls from certain quarters for the introduction of new or modified economic models in many societies.
Proposed alternatives include the Three-Dimensional Economy, Common Good Economy, Participatory Economy, Social and Solidarity Economy, Behavioural Economy, Doughnut Economics, Circular Economy Model, Armington General Equilibrium Model, Swedish Model, and many others.
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However, as good as it sounds on the surface to abandon traditional, established economies and completely replace them with alternative models this is either completely impractical (often because the proposed alternative is fine in academic theory but near impossible to actually implement), or the transition will take so long that the benefits will be limited or not felt at all.
A good short-term solution is to implement a model that keeps the conventional economy going, but also provides an alternative system that runs alongside it.
In South Africa, we have the opportunity to do exactly this by exploring and benefiting from an unconventional concept called the Second Economy.
A good short-term solution is to implement a model that keeps the conventional economy going, but also provides an alternative system that runs alongside it.
In South Africa, we have the opportunity to do exactly this by exploring and benefiting from an unconventional concept called the Second Economy.
What is the Second Economy?
The second economy of South Africa is a vibrant space where consumers and vendors can trade freely and create value in the process. Because this trading environment utilises the Supply on Transact principle, not just supply and demand, simply transacting creates value that stays within the system, causing both consumers and vendors to benefit.
How Does the Second Economy Work
- Consumers and vendors (businesses) join the Aetas Transact trading platform by downloading an Android app and creating an e-wallet account.
- Vendors list products and services for sale on the platform.
- Customers purchase these items, either by visiting the business or by ordering online if the vendor offers this option.
- Customers immediately receive 100% of their spend at participating businesses back, paid into their e-wallet in SIΣGMA (Σ), a virtual currency created to facilitate trading on the platform.
- The more customers spend via the platform, the more value they create for themselves – The Supply on Transact principle in action.
- The customer can use the earned SIΣGMA to buy more goods or services from the vendor (effectively getting everything they buy at half price) or keep it in their e-wallet to spend later at the same or another vendor.
Benefits of the Second Economy
- It operates alongside the conventional economy but is not bound by traditional, restrictive ways of doing things.
- It can create employment as participating businesses grow.
- It encourages entrepreneurship, e.g., setting up a business geared towards making use of the supply on transact principle – or reconfiguring an existing business to better take advantage of second economy practices
- It can have a knock-on effect on the conventional economy as some of the extra value created spills over. The money consumers save by transacting in the second economy can be spent in the conventional economy, and businesses convert money earned in SIΣGMA (Σ) in the second economy to Rand and spend it in the conventional economy.
In the Second Economy, driven by the Supply on Transact principle and facilitated by the Aetas Transact platform, a closed-loop system is created. The consumer’s buying power increases the more they transact and this value flows directly back into the system. This stimulates demand, and the supply of goods and services expands to meet the increased demand.
As more people in South Africa enter the “Second Economy” it will gain traction and become an important driver of growth and prosperity for participating businesses.
CLICK HERE to find out more about how Aetas Transact works, or HERE to go to our website and sign up as a vendor.
See Also:
Aetas Transact: What it is, How it works, and the impact it can have on Your SME Business
A Business Recovery Plan with a Difference for Your SME
Supply on Demand, Supply on Transact, and a new way of Stimulating Economic Growth
The Second Economy of South Africa
Aetas Transact: What it is, How it works, and the impact it can have on Your SME Business
A Business Recovery Plan with a Difference for Your SME
Supply on Demand, Supply on Transact, and a new way of Stimulating Economic Growth
The Second Economy of South Africa
