Post-apartheid South Africa is characterized by considerable spatial and social inequality and high levels of poverty and unemployment, particularly among historically disadvantaged groups. Since 1994, there has been much attention given to fostering local economic development (LED) to promote empowerment, job creation, economic growth and community development, with a primary focus on broad-based Black Economic Empowerment. However, LED initiatives have achieved mixed success, with many projects foundering after optimism in their early stages. Focusing on South Africa's Western Cape Province, with its species-rich Cape Floristic Region, this paper examines LED experience in relation to the concept of the ‘biodiversity economy’, which has received considerable attention recently among South African environmental bodies. The paper focuses specifically on operationalizing the biodiversity economy concept through the implementation of a ‘sustainable wild flower harvesting code of practice’ on the Agulhas Plain, where local communities, supported by transnational companies, are harvesting and marketing wild flowers to retailers in South Africa and the UK. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.