Research Article: 2018 Vol: 21 Issue: 1S
Bongani Thulani Gamede, University of Zululand
Chinaza Uleanya, University of Zululand
This study explored the effects of entrepreneurship in remedying unemployment in rural communities, using South Africa as a case study. Qualitative method was adopted for data collection. Hence, semi-structured interviews were conducted for 12 final year students from four faculties in a selected rural based university in South Africa. The findings of the study show that the curriculum of the university, lack of work integrated learning approach, shortage of infrastructures, policies of the government and university, orientation of the students towards entrepreneurship among others are factors hindering the growth of entrepreneurship within the institution and host community. Recommendations are therefore made that entrepreneurship should be introduced as a core module, partnership between the university and organizations within the community should be formed to promote work integrated learning, while policies of the government and university that can enhance entrepreneurship from undergraduate level should be made and implemented.
Entrepreneurship, Unemployment, Career, Business Creation, Rural Communities, South Africa.
Entrepreneurship is a tool for people pursuing careers in business creation and other related fields (Hisrich & Cabrera, 2012; Galvão, Ferreira & Marques, 2018). According to Toma, Grigore & Marinescu (2014) entrepreneurship as a discipline, generally considers how, why and when, opportunities are recognised, created and put to use. Thus, entrepreneurship is commonly considered as the ‘discovery and exploitation of opportunities’ (Shane & Ventakaraman, 2000). In recent times, entrepreneurship and innovation seem to be the direction followed by different developed nations. For instance, the 2017 report of Global Entrepreneurship Index shows that the first ten well-performing nations in terms of entrepreneurship are developed nations (The Entrepreneurship and Development Institute, 2018). This gives a clue to the influence of entrepreneurship among other factors on the economic development and standard of developed nations across continents of the world. This is ascertained based on the works of Seelos & Mair (2005) as well as Light & Bhachu (2017) who state that entrepreneurship makes both societies in which it is practiced and the entrepreneurs better. This process is described as productive entrepreneurship. However, when entrepreneurship makes entrepreneurs better and leaves the society in a worse state, it is described as unproductive and destructive entrepreneurship. Suffice to state that entrepreneurship can be ‘productive’ or ‘destructive’. By extension, the form of entrepreneurship commonly practiced in developed nations of the world will be regarded as productive since it has contributed to enhancing the standard of the economy, whereas, the form of entrepreneurship practiced in many developing nations of the world may be considered as unproductive or destructive, because, it has left some societies worse off, yet enriching many entrepreneurs. On the other hand, rural environments are expected to be developed through various activities and policies made and implemented by the government. According to Sehoole & Nkomo (2007), policies made and implemented by the government can help promote development in rural environments, thereby ensuring equity in the forms of development experienced in an entire nation. They further opine that the government most times establish institutions of learning such as: Formal schools, universities, industries, organizations, among others in strategic rural locations when there is need to develop such rural environment. It is expected that by so doing, many individuals within and around such rural communities are empowered.
According to Statistics South Africa (2017), the unemployment rate in South Africa is approximately 28%. Suffice to state that unemployment rate in South Africa in recent times seems to rank one of the highest across the African continent or Sub-Sahara countries, whereas, the Gross Domestic Product (GDP) of the nation is higher than many other countries within the continent. This implies that the form of entrepreneurship experienced in a country as this may be described as being unproductive to the people. Thus, the reason for this study which aims at exploring the causes of poor or unproductive entrepreneurship knowledge among undergraduates in rural based universities. The study also explores various ways by which entrepreneurship can be used to reduce or eradicate unemployment in the local environment and nation at large.
Entrepreneurship and Job Creation in Rural South Africa
The focus of development in many developing nations of the world is urban centres (Knoll, 2017). He further states that the focus on urbanization accounts for one of the reasons why urban centres experience continuous overcrowding which leads to overpopulation. This increases the cost of living and rate of crime in such areas. A report released from the office of the Secretary-General’s Envoy on Youth (2014), entrepreneurship in South Africa is the solution to youth unemployment. In other words, unemployment may persistently prevail in South Africa, if entrepreneurship is not explored. However, many strive to survive and remain in such areas. Entrepreneurship is however hindered by several factors (Murioz, Pablo, Pena and Salinero, 2016). Some of these factors are as explained below:
Factors that can favour or hinder entrepreneurship and entrepreneurship education in South Africa
Several factors can promote or hinder the success of entrepreneurship in South Africa. Among these factors are:
Lack of Infrastructures and technological facilities. According to Murioz, Pablo, Pena & Salinero (2016), infrastructures and technological facilities are needed in modern entrepreneurial practices. Thus, countries where state of the art infrastructures which can enhance certain entrepreneurial activities are lagging may be unable to promote entrepreneurship. Meanwhile, Kritikos (2014) states that entrepreneurship creates new technologies, hence the need arises for the entrepreneurs to be given the platforms and due support to access various forms of such technologies as may be demanded. Suffice to state that entrepreneurship may not easily thrive in a given society without the support of the government providing certain specific amenities to ensure adequate productivity by entrepreneurs. However, Crumpton (2012) and Drucker (2015) state the need for innovation and improvisation. These are expected to assist entrepreneurs in overcoming challenges that may emanate based on the failure of the government to provide certain necessary basic amenities that will promote the smooth running of their business.
Government Policies are crucial and important in determining the existence and survival of entrepreneurial business (Folster, 2000 and Kritikos, 2014). This implies that an establishment may be unable to stand the test of time if the policies of the government are unfavourable. Hence, the government, besides providing the necessary facilities that can enhance productivity of entrepreneurs, is expected to encourage entrepreneurs through various policies that can ensure the viability of their business. Suffice to state that entrepreneurs can survive in business or collapse due to government policies. Thus, knowing the importance and level of productivity that can be realised within a society based on the activities of entrepreneurs, it is paramount that the government reviews its policies to be inviting and promote entrepreneurship (Mahadea & Pillay, 2008).
Shortage of skills and experienced manpower is considered a limiting factor to entrepreneurship in South Africa (Ntuli & Allopi, 2014). Skills are needed for economic growth to be ensured. However, in the context of South Africa, certain skills seem to be lacking. This has hindered the level of productivity that ought to have been experienced by the nation. Moreover, rural communities are usually encompassed with many unskilled individuals due to migration of labour and skilled manpower to urban centres. Thus, Dani and Shah (2016) express the need for trainings to be given to individuals in rural communities. These trainings are expected to empower the individuals and make them useful to both themselves and the society. This is assumed to help in the reduction of crime rates within such environments (Mahadea & Pillay, 2008).
The form of orientation given to individuals regarding entrepreneurship influence their decisions and thoughts (Leibowitz & Bozalek, 2014). Thus, students or individuals who are well oriented on the activities, importance and benefits of productive entrepreneurial activities to both individuals and society are likely to get involved in such activities and profit themselves and society. However, the reverse will be the case when the wrong orientation is given to individuals or when the orientation given is inadequate.
Lack of motivation hinders the creation and sustainability of entrepreneurship (Estay, Durrieu & Akhter, 2013). They further opine that entrepreneurs who are motivated to uphold their entrepreneurial activities profit more. In other words, productive entrepreneurship is a product of motivation amidst challenges. The motivation may be intrinsic or extrinsic (Waxler, 2006). Government policies, infrastructures, collaboration with other organizations, profit, among others can constitute extrinsic motivation for entrepreneurs, while personal satisfaction even without huge profit, personal accomplishment, achievement of set goals, may constitute intrinsic motivation. Thus, policies made for university students and several other factors can be used to motivate students towards becoming productive entrepreneurs (Caurkubule & Rubanovskis, 2014).
Non-existence of or poor mentorship programme can contribute to the failure of entrepreneurship (INSECTA, 2014). The report by Insurance Sector Education and Training Authority (INSECTA, 2014) suggests that while the government supports and encourages entrepreneurship, it is expedient that it promotes mentee-mentor activities in various entrepreneurial sectors. This will help boost entrepreneurial activities in different parts and sectors of the society, while ensuring sustainability. Thus, employers are expected to be encouraged to make great funding available for internships in order to draw in graduates with potentials for entrepreneurial activities.
School and university factors is considered one of the contributing factors which is liable of promoting or hindering entrepreneurship in a society (Connor, 2014). According to Leddy & Gazette (2013) as well as Sundheim (2013), the school has major roles to play towards ensuring that students are inspired and motivated to become productive entrepreneurs and undertake entrepreneurial activities. Thus, entrepreneurship may likely thrive in rural communities when schools and universities in such communities ensure that students get involved in entrepreneurial activities within such environments and are motivated to continuously perform such activities with the aim of proffering solutions to existing challenges and demands in such communities. Suffice to state that institutions of learning in rural based communities are expected to conduct activities which will promote productive entrepreneurial activities, thereby ensuring sustainable development in such environments and for the individuals involved.
Rural Universities in South Africa
Rural universities in South Africa are various institutions of higher learning which are deliberately established in undeveloped local communities and are saddled with the responsibility of striving to develop such communities. This is expected to be done through enriching their research capabilities and outputs; expanding their intellectual, social and entrepreneurial resources; and establishing durable collaborative relationships with other institutions towards the enhancement of development (Sehoole & Nkomo, 2007 and Uleanya & Gamede, 2017). However, while many other activities seem to be undertaken by rural universities in South Africa, entrepreneurship seems to be overlooked (Knoll, 2017). For instance, research outputs are credited and well recognized through the annual turn-out of graduates, presentations in conferences, seminars among other activities. However, entrepreneurship activities are least advertised or showcased across rural based institutions. This suggests that entrepreneurship is not well recognized in such environments.
Additionally, according to Dani & Shah (2016), rural universities are intentionally established in the selected developing locations in order to ensure that they proffer solutions to existing challenges in such communities and enhance sustainable developments in such areas. In other words, rural universities are institutions of higher learning that are strategically positioned at less advantageous local communities with the aim of bringing sustainable development to such area through empowerment, support and collaboration with different education stakeholders. Thus, rural universities are established to cater for the peculiar needs of the people within the community while taking into cognizance the peculiar nature of the students (Bookin-Weiner, 2015). One way by which the needs of the local community members are expected to be provided is through the enhancement of productive entrepreneurship in such areas. However, the reverse seems to be the case in rural areas in South Africa, as major focus remains on developing the urban environments while the rural communities are least considered. Hall & WoErMann (2014) describe this as act of inequality and social injustice in the society.
Entrepreneurship is desired to help promote development in different environments in given societies and nations. Meanwhile, the government in a bid of enacting and promoting development within rural environments establish institutions of learning such as high schools and universities. Huge amount of money seems to be budgeted and expended on rural education which is expected to be productive to the host community, citizens, the government among other education stakeholders, by first catering for the peculiar needs of the rural environments in which they are situated and possibly nation at large. However, some established rural institutions of learning which are expected to proffer solutions to the peculiar needs and demands of their host communities tend to focus on various researches which most times have findings which are not implemented in the society. On the contrary, entrepreneurship which is a basic tool that can promote development whilst reducing unemployment and poverty in the community has been explored and practiced in many developed nations, but seems to be ignored in many developing communities and nations. Moreover, in developed societies where entrepreneurship is well practiced, it is believed to be useful to both individuals and the society at large. Hence, the reason for this study which aims at exploring reasons why entrepreneurship is hindered in a selected rural environment in South Africa. Also, possible ways of ensuring productive entrepreneurial activities are explored using a selected rural based university in South Africa.
The research questions guiding this study are:
1. What are the factors hindering the promotion of entrepreneurship in the selected rural community in South Africa?
2. Can entrepreneurship reduce or eradicate unemployment cum poverty in the selected rural community in South Africa?
Qualitative method was used for data collection in this study. This was due to the nature of the study which sought to collect in-depth information on the factors hindering the promotion of entrepreneurship and eradication of unemployment cum poverty in a selected rural community in South Africa. Creswell (2014) and Kumar (2014) view qualitative research method as being appropriate for obtaining in-depth information though not from a representative sample and may therefore not be suitable for generalization to a population. The population of this study consists of 12 purposively selected final year undergraduate university students in a selected rural based university in South Africa. The students were selected based on their experiences on campus and expectation that they ought to have gone for industrial training prior to their final year. Moreover, South Africa was adopted for this study because the standard of their higher education is well recognized in the ranking of universities in the African continent (World University Ranking, 2017). Also, the rate of unemployment in the country is high compared to many other African countries, while its Gross Domestic Product (GDP) is higher than many other African nations. Purposive sampling technique was used in selecting 12 participants from across all 4 faculties in a selected South African rural based institution.
Instrument and Analysis
The study aimed at investigating the factors hindering the establishment and promotion of entrepreneurship in rural communities in South Africa. Semi-structured interviews were conducted for the 12 randomly selected students who participated in the study. The collected data was thereafter, coded and thematically analysed.
The findings of the study are presented below based on each research question.
Research question 1: What are the factors hindering the promotion of entrepreneurship in rural communities in South Africa?
Hindrances to Entrepreneurship in Rural Communities in South Africa
The factors hindering the establishment, growth and development in rural communities in South Africa with respect to the selected rural community. The responses of the respondents on the hindering factors are presented below:
Theme 1: Lack of infrastructures: Majority of the respondents state that lack of infrastructures within the institution hinders the establishment and growth of entrepreneurship in the community. Some of the responses of respondents are as stated below (‘R’ is used to mean Respondent):
R7: Entrepreneurship is really good and I believe that it will help our community, but I feel that our institution must first position itself by providing infrastructures which will promote such programme.
R1: There are no infrastructures that can enhance entrepreneurship education in our institution. I don’t think entrepreneurship education can work, let alone promote entrepreneurship within the community.
R8: Entrepreneurship is quite poor in our community because of the lack of infrastructures. For instance, we can’t compare the available infrastructures in urban cities to those obtainable in rural communities.
R10: There will be need to first consider the existing infrastructures before venturing into entrepreneurship education which will be useful for promoting development in our community.
R3: Once, infrastructures can be put in place and entrepreneurship education or programmes are introduced into this institution, our community will be a better place.
The expressions above suggest that lack of infrastructures is a contributing factor hindering entrepreneurship in the selected rural community. Also, while the respondents are pleased to have entrepreneurship in their community, they will like it to be included first as a programme of study or module in the university. However, lack of infrastructures seems to be a major challenge hindering such.
Theme 2: Institution and government policies: The responses of respondents suggest that policies seem to contribute to the lack of entrepreneurial growth in the selected rural community. This includes both university and government policies. Some of the responses of the respondents on this theme are presented below:
R4: Policies of the government are important and can affect the establishment or growth of entrepreneurship in any community, let alone a rural community like ours.
R6: If the government choose to promote entrepreneurship, then they must make policies that will encourage people (even foreigners) to become entrepreneurs.
R12: The University must learn from the policies favouring universities of developed countries where entrepreneurship is successful. This will help us make and implement policies that will promote entrepreneurship.
R5: I don’t think that there is an entrepreneurship policy in this university. I feel that the government should make schools (universities) to have such policies so that entrepreneurship can be promoted and this can help our community.
The responses above suggest that policies affect entrepreneurship in the community. The university seems not to have policies on entrepreneurship; hence, the government should intervene.
Theme 3: Poor orientation on entrepreneurship: The study shows that majority of the students are not oriented on the need for entrepreneurship, rather they are made to believe in the idea of striving to get a job after graduation and are taught to prepare for such. Some of the responses of the respondents on orientations given to them on entrepreneurship are presented below:
R3: I have never heard any of my lecturers mention issues on entrepreneurship.
R1: We are made to believe that we are being prepared for a world of work in any established firm.
R9: I know that majority of us lack entrepreneurship skills because we are not taught and nobody says anything.
R10: I feel that there is high rate of unemployment in our community because nobody gives students, even those who may be interested in entrepreneurship any form of orientation.
R2: From the first day that we get into the institution, every orientation is aimed at making us succeed academically. This is good, but I strongly believe that there is need for us to be given orientation on entrepreneurship. This will really help us.
R5: As for me, I sell muffins sometimes, though nobody told or taught me about entrepreneurship.
R7: Most of our lecturers do not even mention such, let alone encourage us, only very few of them talk to us about such.
This finding of the study shows that majority of the students lack orientation on entrepreneurship and how they can become one. This suggests reasons why entrepreneurship may continue to suffer in the community.
Theme 4: University curriculum: Findings from respondents suggest that the curriculum of the university contributes to the failure of entrepreneurship in the community. Some of the responses of respondents are presented below:
R1: I doubt if anything like entrepreneurship exists in the curriculum of the university.
R11: If entrepreneurship was to be included in the curriculum of the university, its effect would have been seen or felt one way or the other.
R12: The curriculum is the engine house of the university, I believe that entrepreneurship is not included in the curriculum of the school (university), otherwise, we would have known and been offering some entrepreneurial modules.
R4: I think that we would have been better if we were made to do some sorts of entrepreneurship programmes or modules. Guess, some of us would have been good entrepreneurs.
The responses show that the curriculum of the institution lacks entrepreneurship programmes or modules and that has imparted on the students.
Theme 5: Socio-economic background of students and family beliefs: The study suggests that one hindering factor of entrepreneurship in the selected rural community is the socio-economic background of students. Below are some of the responses:
R5: My parents are expecting me to graduate, get a job and begin to help the family.
R10: Nobody in my family is even thinking towards that direction, because there is no money and they feel that the best way to make money is by working in any firm.
R12: My family believes that once a person graduates, he/she needs to work and make money. They don’t consider being an entrepreneur as an option.
R8: …even if I was thinking about being an entrepreneur, I can’t because of the need for money and belief system in my family that after graduation from university, the only way money can be made is by working in any established firm.
R7: I wish that my family can give me some time to do business as an entrepreneur. Unfortunately, that won’t be possible. I only hope and pray to get a good job after my graduation.
This finding shows that the socio-economic background of students affects their chances of being entrepreneurs, though they may choose such.
Theme 6: Lack of quality collaboration: Collaboration with established firms is expected to be one of the major factors that can promote entrepreneurship in rural communities. However, the study suggests that there is little or no collaboration between the university and organizations that can aid entrepreneurship. Some of the responses of respondents are as presented below:
R3: I have not seen and don’t know of any collaboration that exists between the school (university) and any company that can help entrepreneurship.
R9: I know that collaborations between our university and companies can help us and our communities, but I don’t think anything like that exists. I have only heard of research collaborations, not entrepreneurship.
R11: Well, maybe because we don’t run entrepreneurship programmes that are why we don’t hear or know of collaboration on entrepreneurship.
This finding suggests that there is no collaboration between the university and established firms within the community. Suffice to state that lack of such collaboration affects the establishment of entrepreneurship in such community.
Research question 2: Can entrepreneurship reduce or eradicate poverty in rural communities in South Africa?
Theme 7: Entrepreneurship combats unemployment and poverty: The responses of respondents to the second research question which is explained under theme 7: ‘Entrepreneurship Combats Unemployment and Poverty’ shows that majority of the students agree that entrepreneurship can help reduce the rate of poverty in their local community. Some of the responses are as presented below:
R2: Entrepreneurship will make everyone to be automatically busy and useful to him. This will lead to personal wealth creation.
R7: Entrepreneurship can help people to get their daily bread. This will make them responsive to the needs of their families.
R4: As a nation, if we must consider development and ensure that unemployment becomes a thing of the past, we must think towards entrepreneurship.
R6: There are few jobs available for us as graduates. In fact, many of us don’t know what will become of us when we finally graduate, but I feel if we are taught, encouraged and empowered to become entrepreneurs, the story will be different and better.
R10: We really need entrepreneurs. The moment people become entrepreneurs, they will be able to generate little resources every day and that will help them take care of some of their needs and most importantly food issues.
R12: Once unemployment rate is reduced, poverty is automatically reduced. So I believe that entrepreneurship can contribute to the reduction of poverty in our society.
R11: Entrepreneurship will reduce crime rate and that will help to promote peace in the community. There is nothing better than peace in the society.
R3: Developed nations practicing different types of economy have been able to identify the importance of entrepreneurship and it is really working for them. For instance, there are only few well-known entrepreneurs who are actually South Africans living in the country. This gives an insight to the way entrepreneurship is embraced in the country.
This finding suggests that entrepreneurship can contribute to the reduction of poverty in the community in various ways. Thus, one way of reducing poverty and promoting peace in rural communities is through entrepreneurship.
The findings of the study show that lack of infrastructures, policies of the institution and government, orientation given to students, curriculum of the university, socio-economic background of students and family beliefs, lack of collaboration between the university and organizations, among others are the factors contributing to the lack of entrepreneurial growth in the selected rural community in South Africa.
The findings of the study on infrastructures contributing to poor entrepreneurship in the community coincides with the work of Murioz, Pablo, Pena & Salinero (2016) who opine that infrastructures are highly needed for entrepreneurship to thrive in any community. Suffice to state that poor infrastructures in the institution of learning and community contribute to lack of entrepreneurship growth in the selected rural community.
Finding of the study also suggests that policies of the institution and government contribute to poor entrepreneurial activities in the selected community. This corroborates the works of Folster (2000) and Kritikos (2014) who opine that policies are important factors that can ensure the survival and growth of entrepreneurship in any society. The finding of the study also agrees with the work of Leibowitz & Bozalek (2014) who state that the orientation given to students go a long way to determine their level of awareness and decisions made in life.
Additionally, the study shows that the curriculum of the university contributes to the challenges of entrepreneurship in the selected rural community. This concurs with the work of Grisham-Brown & Hemmeter (2017) who opine that the curriculum of an institution moulds or mars the abilities of students and affects their decisions over various issues in life. Meanwhile, the findings on students socio-economic background and family beliefs corroborates the work of Okioga (2013) who avers that the socio-economic background of students influence the abilities to learn, belief system and decisions in life.
The findings on lack of collaboration between the university and organizations being a contributing factor hindering entrepreneurship in the selected rural community coincides with the work of Connor (2014) which emphasises the need for mentor-ship in building entrepreneurs. This mentor-ship can be viewed as being adequately relevant when institutions of learning are able to partner with experts who can help students through mentee-mentor relationship.
Additionally, the finding of the study shows that majority of the students agree that entrepreneurship can help to reduce unemployment and poverty. This finding supports the work submission from the Office of the Secretary-General’s Envoy on Youth (2014) which states that entrepreneurship is a lasting solution to unemployment issues in societies, rural communities inclusive.
The study explored the need for entrepreneurship to be adopted as a tool to solving the challenges of unemployment in rural communities in the selected rural community in South Africa. Consequently, factors hindering entrepreneurship in the selected rural community in South Africa were investigated. Moreover, this can be adopted for other communities with similar contexts. The study shows that rural universities are established with a major aim of promoting development within the host community, while entrepreneurship is a useful tool that can drive sustainable development in any society. However, the selected rural university seems to overlook the role of entrepreneurship as a tool for proffering solution to unemployment which is one of the main challenges confronting South African rural societies. To this end, the following recommendations are made:
Partnership between the rural based university and private or government owned organisations (NGOs inclusive) within the community that can promote productive entrepreneurship in such local environments should be encouraged, as well as creation of awareness and importance of entrepreneurship to members of the public. This will enable members of such societies to become motivated to get involved in entrepreneurial activities.
The curriculum of students should be made to include and promote entrepreneurial activities. This will help enlighten the students and make them get involved without much effort from external forces. It will also help make them know how to get involved in productive entrepreneurship that will benefit them and the society at large.
Loans should be given to students upon completion of their programmes that are entrepreneurial oriented. This will help motivate the students towards becoming productive entrepreneurs.
Short term courses on entrepreneurship education should be organised by universities in rural communities. This will help enlighten local community members who may be interested in becoming entrepreneurs.
The curriculum of all university students should be made to include at least a core module which revolves around entrepreneurship. This will help to introduce all university students to basic knowledge on entrepreneurship: Its importance and how it can be introduced by an individual or group of individuals.
Students studying commerce oriented or related courses should be made to establish an entrepreneurial firm in the rural community or its suburb where the institution is located before they can be made to graduate. This will help make such students to become entrepreneurs before they graduate from the university. Such students after graduation can become employers of labour. This will help to contribute to the challenges of unemployment in such communities.
Specific days should be set aside to celebrate entrepreneurs and entrepreneurship within the community. This will help to create awareness among local community members, sensitize them on how they can be involved and support entrepreneurship.
The present study focused on factors hindering entrepreneurship development in a selected rural community in South Africa. Hence, since only one rural based university was selected for the study, it is suggested that similar study be conducted in different rural communities in other countries or within South Africa as well using two or more rural institutions of learning or comparing rural and urban based universities. Also, qualitative method was adopted for this study, thus, quantitative or mixed methods can be adopted when conducting similar studies.