Entrepreneurship in South Africa: To what extent do human capital and demographic characteristics influence the entrepreneurial motivation of South African entrepreneurs?’

Entrepreneurship can play a crucial role in overcoming development barriers, alleviating unemployment, and promoting general wellbeing. For decades, scholars have investigated the factors that influence entrepreneurial entry. It is only recently, though, that scholars have begun to centralise the concept of necessity- and opportunity-motivated entrepreneurial entry in this research field. Studies investigating factors that influence entrepreneurial motivation have shown mixed results and have thus far focused solely on low- and middle-income and developed countries. This study elaborates on the existing research by investigating the influence of both human capital and (same and other) demographic characteristics in South Africa, a middle-income, developing country. Based on comprehensive data from 171 South African entrepreneurs (Global Entrepreneurs Monitor, Adult Population Survey 2017), this quantitative analysis was embedded in a qualitative overview of the structural reality...Show moreEntrepreneurship can play a crucial role in overcoming development barriers, alleviating unemployment, and promoting general wellbeing. For decades, scholars have investigated the factors that influence entrepreneurial entry. It is only recently, though, that scholars have begun to centralise the concept of necessity- and opportunity-motivated entrepreneurial entry in this research field. Studies investigating factors that influence entrepreneurial motivation have shown mixed results and have thus far focused solely on low- and middle-income and developed countries. This study elaborates on the existing research by investigating the influence of both human capital and (same and other) demographic characteristics in South Africa, a middle-income, developing country. Based on comprehensive data from 171 South African entrepreneurs (Global Entrepreneurs Monitor, Adult Population Survey 2017), this quantitative analysis was embedded in a qualitative overview of the structural reality and historical context within which the challenge of entrepreneurship in South Africa sits. As predicted, human capital (educational level) showed to lead to a higher cognitive ability and in turn a greater ability to identify and recognise opportunities. Similarly, higher educational levels led to better social networks, which positively influences entrepreneurs to identify and exploit business opportunities. Additionally, as predicted, being younger and therefore, for example, attaching more value to autonomy, having fewer obligations, and experimenting (more) with making the optimal career choice, leads to being more open to a range of opportunities compared to older entrepreneurs, which increases the ability to be opportunity-motivated. These findings are useful for policymakers who desire to more effectively stimulate and promote entrepreneurship. Doing so enhances the entrepreneurial ecosystem, which in turn leads to economic development, growth, and to overcome development barriers.Show less

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Entrepreneurship in South Africa: To what extent do human capital and demographic characteristics influence the entrepreneurial motivation of South African entrepreneurs?’