Thesis (MTech (Tourism Management))--Cape Peninsula University of Technology, 2011. / The revenue generated by tourism can be directed to the social and cultural well being of communities. This aspect is considered as an important social dimension of sustainable tourism. Management should develop a prescient, well-founded, and creative view of future opportunities that will spur pre-emptive competence-building, provide focus into their efforts, ensure consistency in investment programmes, and serve as a guide for decisions concerning strategic alliances and acquisitions. It is necessary to acknowledge the impact of tourism on the socio-economic development of communities. The creation of employment, transfer of skills, contribution to venue infrastructure, local arts and cultural development, as well as the process of product ownership to show their willingness to do so, may add to a great deal of community pride. Over a period of time, the ABSA Klein Karoo Nasionale Kunstefees (KKNK) has developed into a major arts festival in South Africa. Since its inception in 1994, and with an initial investment of R750 000.00, the festival turn-over grew to an estimated R65 million in 2006. As the festival operates as a Section 21 Company (an organisation not for gain), funding depends entirely on grants, donations, contributions and corporate sponsorships. Arts festivals can be grouped within the current corporate and social funding framework of ABSA Bank. Despite the type and rate of growth, local communities and consumers have reached different stages in the adoption of the festival.

Business incubators, as recognised in their contemporary form, have a history dating back to the 1970s in the United Kingdom and the USA. South Africa is no stranger to this concept of business incubation either: Since the 1980s the Small Business Development Corporation (SBDC) operated business “hives” as clusters of small enterprises. Business incubators are support facilities that empower and stimulate small-entrepreneurial businesses – from the financially vulnerable start-up period, until the time that the fledgling company is ready to operate more autonomously. Business incubators provide, as part of their services, affordable space, financial-management services, sound business advice and other development services. Incubation stimulates the development of small-entrepreneurial businesses and, to this end, helps stimulate the economy. Thus, for South Africa to invest in the development of small growing businesses, is to invest directly in its larger economy and to address its own development challenges like employment-creation, income-generation and the alleviation of poverty. It is in this context that this study discusses the development challenges of one of the rural areas in South Africa, Oudtshoorn, and aims to provide a viable strategy of business incubation for this area, in anticipation that in future lessons can be drawn from this and applied to other rural areas. Oudtshoorn is a town in the Klein Karoo, in the Western Cape Province of South Africa. The strongest sectors in Oudtshoorn’s economy are agriculture and tourism. These two sectors should provide the basis for an empowering business incubator to strengthen and enhance smaller businesses in the town. The study focuses on the development challenges of South Africa and, in particular, a rural town such as Oudtshoorn, the importance of investing in small entrepreneurial businesses so as to strengthen the country’s economy. the nature an significance of a business-incubation strategy for the Oudtshoorn area. Background literature on South Africa’s development challenges was collated as well as information gathered on small-business support and incubation in particular. Literature was retrieved from local institutions as well as national and international sources. Case studies of incubators in South Africa and in other countries were included to enhance the understanding of the importance of business incubation. In addition, the researcher’s close networks with the Oudtshoorn municipality, the local Red Door office and the different role-players in the small-business support sphere allowed for an in-depth assessment of support for such an incubation project and the critical obstacles it may encounter en route.