Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2020 Vol: 26 Issue: 3

Students Entrepreneurial Intentions at A University of Technology in Gauteng Province, South Africa

Letsoalo, ME, University of Limpopo

Rankhumis, EM, Tshwane University of Technology

Abstract

Interest in entrepreneurship has developed tremendously over the years and this study was aimed at evaluating students’ perspectives of entrepreneurial intentions at the Tshwane University of Technology. The sample for this study comprised of 279 (153 [54.84%] first year and 126 [45.16%] no first year) students. The data collected was analysed through Stata version 15. Rank-sum test results indicated that students who were in the first year and those who were not in the first year had significantly different perceptions of entrepreneurial intentions. While students brought their own experiences into the university lecture rooms; the time spent at university deepened their perspective of entrepreneurship. It emerged that students’ exposure to entrepreneurship education had a positive effect on their entrepreneurial intentions. It is further found that as the students move further into the next level of study, positivity on entrepreneurship education is enhanced. It is recommended that the entrepreneurship education should incorporate activities that are real-life based and require problem-solving capabilities. It is further recommended to link course content of the entrepreneurship with entrepreneurial ecosystem. Finally, business feasibility should be considered as a missing component in the entrepreneurship course content and this could provide a sense of prospects of the envisaged business venture.

Keywords

Unemployment Rates, Entrepreneurial Intentions, Job Creation, Innovation, Self-Efficacy.

Introduction

Official unemployment rates are on the rise in many developing countries that include South Africa (Statistics South Africa, 2019). The country has a very high unemployment rate, low economic growth and a dismal Total Entrepreneurial Activity (TEA)-these are real challenges and threats to the national economy; hence both the government and private businesses are attempting to address these challenges (Chimucheka, 2014).

Within the context of rising unemployment rates in a skill constrained economy, rising graduate unemployment is another worrisome factor. Among the cited reasons, emanating from the youth unemployment is the shortage of relevant skills that are in demand (Letsoalo & Rankhumise, 2020). Relevant skills can be taught to aspiring entrepreneurs at schools and tertiary institutions of learning that include universities. As noted in Ogundola (2016), “Entrepreneurship education (EE) is a lifelong learning process, starting as early as elementary school and progressing through all levels of education, including university education experiences that will enable them to develop the insight needed to discover and create entrepreneurial opportunities and the expertise to successfully start and manage their businesses”. There is an attempt to make South Africa’s students and learners aware of EE from primary schools to universities. Learners are introduced to the concept of EE or the components of EE through the learning area called Economic and Management Sciences (EMS) at the primary school level. As elective subjects, learners may choose to register for a combination of Economics, Business Studies and Accounting at secondary school level. EE can thus be seen as a vehicle that can be used to deliver entrepreneurial knowledge, skills and abilities to the students to assist them in their future endeavours of becoming entrepreneurs (Othman & Othman, 2017). Scholars agree that entrepreneurship can be taught and learned through entrepreneurship education (Luiz & Mariotti, 2011; Nicolaides, 2011; Fatoki & Oni, 2014; Nchu, et al., 2015; Shange, 2019; Letsoalo & Rankhumise, 2020).

Entrepreneurship education intends to capacitate prospective and nascent entrepreneurs with knowledge and necessary skills to meet the need to accelerate economic development through generating new ideas and converting those ideas into viable and profitable ventures (Turker & Sonmez Selçuk, 2009). It focuses on the development of skills or attributes that enable the realisation of opportunity. It can be seen as “Opportunity recognition, marshalling of resources in the presence of risk, and building a business venture” (Kourilsky, 1995) and as “a collection of formalised teachings that informs, trains, and educates anyone interested in business creation, or small business development” (Ogundola, 2016). It, therefore, is critical for the universities to embrace EE in different programmes. By so doing, the students’ knowledge and skills would broaden their knowledge and insights and subsequently, self-efficacy is enhanced (Jwara & Hoque, 2018).

Since both private and public sectors are unable to absorb the number of job seekers in South Africa, attention has been on entrepreneurship and new start-ups to contribute to economic growth and creating job prospects for the unemployed (Fatoki & Oni, 2014; Letsoalo & Rankhumise, 2020). As early as 2001, Davies (2001) has noted that South Africa’s capacity to absorb a new labour force into the formal sector has fallen from about 62% to less than 4% in the past four decades. Co and Mitchell (2006) are of the view that active intervention in the form of entrepreneurship education is necessary if people, especially the youth are to escape the challenges that will come with unemployment. Rankhumise and Letsoalo (2019) argue that there is undoubtedly growing recognition of the pivotal role small and medium enterprises (SMEs) play in economic development and this is characterised by job creation as well as economic growth prospects. Furthermore, SMEs have the capabilities of addressing socio-economic challenges through the creation of job prospects for the society. Accordingly, they are regarded as the seabed for the development of large companies and are the lifeblood of commerce and industry at large (Wadesango & Mhaka, 2017). Arguably, as SMEs are well known for their contribution towards economic growth, job creation and social progression of society (Abdullahi & Sulaiman, 2015) entrepreneurship education becomes a critical factor that could stimulate start-ups, which will address the unemployment rates. Studies were conducted in this area. For example, Lekoko et al. (2012) examined the effectiveness of entrepreneurship aimed at raising students’ awareness of self-employment as a career option and creating an enterprising culture amongst them. EE is regarded as a solution that encourages students to pursue entrepreneurship as a career choice (Othman & Othman, 2017). Therefore, the purpose of this study was to examine the extent to which EE influenced the EI of students at the Tshwane University of Technology.

Entrepreneurial Intentions

Entrepreneurial intentions intend to undertake the successful entrepreneurs and affect individual behaviour (Ajzen, 1991; Odor et al., 2019). In social psychology literature, intentions have proved to be a strong predictor of planned individual behaviours, especially when that the behaviour is rare, difficult to observe, or involves unpredictable time lags (Krueger Jr, N.F et al., 2000); entrepreneurship is a typical example of such planned and intentional behaviour Krueger Jr & Brazeal, 1994). For example, starting a business is an intentional act. On a similar note, Linàn et al. (2010) reported that the behaviour would best be predicted by the entrepreneurial intentions. Entrepreneurship is a buzz word which is frequently used by many people and this has become a priority in the research agenda in many fronts since the concept was established in the early 1770s (Mokaya, et al., 2012; Letsoalo & Rankhumise, 2020).

Scholars in the area of entrepreneurship have provided many definitions for this concept by identifying what they believe makes entrepreneurship distinct from other forms of economics and management thought and behaviour. Among others, Fatoki and Oni (2014); Mokaya, et al. (2012) noted that the definition of entrepreneurship has been inconsistent due to its diverse nature. These authors argue that the definitions focused on a broad range of activities; for instance, the creation of organisations, the carrying out of new combinations, the exploration of new opportunities, the bearing of uncertainty and the bringing together of factors of production. Mokaya et al. (2012) define entrepreneurship as “The individual motivation and willingness to take risk, create and sustain a growth-oriented and profit-making enterprise”. Kiggundy (2002) defines it as “Willingness and ability of an individual to seek out investment opportunities and be able to establish and run an enterprise successfully based on identified opportunities”. Notably, it is about transforming ideas into commercial opportunities (Mudau & Kruger, 2014; Webb, Ireland, & Ketchen Jr, 2014). Bygrave and Hofer (1991) are of the view that the entrepreneurial process "Involves all the functions, activities, and action associated with the perceiving of opportunities and the creation of organisations to pursue them". Similarly, Williams (2011) and Onu (2013) defined entrepreneurship as a process whereby an individual intends to use their capabilities, efforts, intellect and resources to create their business ventures.

EE is fundamental for the development of entrepreneurial skills, attitudes and behaviours that form the basis for the economic growth of a country (Lekoko, et al., 2012). At tertiary institutions of learning such as universities; EE can have a positive influence on attitudes towards entrepreneurship, and in turn promote entrepreneurship as a useful and respectable career prospect for graduates (Galloway & Brown, 2002; Lekoko, et al., 2012). Therefore, entrepreneurship may be regarded as an important catalyst and useful technique to create jobs and job opportunities; and encourage self-employment among the youth (Mudau & Kruger, 2014). It follows that entrepreneurial activities are not only the incubators of technological innovation; they provide employment opportunity and increase competitiveness (Zahra, 1999). EE is critical vehicle of encouraging and stimulating entrepreneurship because it (i) creates a sense of independence and self-confidence to individuals, (ii) enables the recognition of alternative career options, (iii) broadens the individuals’ horizons by enabling them to better perceive opportunities and (iv) provide knowledge and skills needed by individuals to use in developing business opportunities (Doğan, 2015)

Entrepreneurs, those that would create new start-ups and initiate or improved ways of doing things that result in a positive effect on the economy (Davis, 2002; Letsoalo & Rankhumise, 2020), are pioneers of free enterprises that build businesses using innovation and creativity (Hewitt & Van der Bank, 2011). Innovation is the one business action that directly relates to economic growth (Soriano & Huarng, 2013). One of the ingredients to a successful business is the ability of the business owners or managers to develop new ideas that keep operations, products and services fresh. Associated with the improvement or creating something new; it is the evolution of convenience, efficiency and effectiveness (Brooks, 2013). The author further highlighted that nearly half of executives feel their businesses have become more risk-averse when considering new ideas. Many companies take a low-risk approach to innovation because they lack a prudent, disciplined approach for innovation - this can jeopardise results (ibid). Therefore, innovation can act as a catalyst that can make one’s business grow and can help one to adapt in the marketplace (Sok, O’Cass, & Sok, 2013). The capacity to innovate has the potential to assist firms or businesses in the process of developing superior products to meet their customers’ changing needs and demands (Rosenbusch, et al., 2011) which is a requirement to succeed in the marketplace (Rosenbusch, et al., 2011; Sok, et al., 2013). Furthermore, firms must also possess superior marketing capability to bring their products to the marketplace faster and serve the customers better than their competitors (O’Dwyer, et al., 2009; Sok, et al., 2013). Rosenbusch et al. (2011) reported that innovation-performance relationship is context-dependent. Factors such as the age of the firm, the type of innovation, and the cultural context affect the effect of innovation on business performance to a large extent (ibid).

Entrepreneurial intention (EI) is defined as “The intention to start a new business” (Krueger Jr & Brazeal, 1994; de Janasz, et al., 2007; Letsoalo & Rankhumise, 2020). EIs are described by the Global Entrepreneurship Monitor (GEM) as the “Percentage of 18 to 64-year-old population (individuals involved in any stage of entrepreneurial activity excluded) who intend to start a business within three years” (Herrington, et al., 2017). Furthermore, a study conducted by Oinas-Kukkonen (2013) found that there is a sign of element of intention on behavioural outcomes, for instance, attention, belief and expectation. Notably, it can be stated that intention is such an important factor for any type of behaviour to occur. Krueger and Brazeal (1994) commented that “Before there can be entrepreneurship, there must be the potential for entrepreneurship”. Webb et al. (2014) indicated that entrepreneurs often break the rules and redefine existing frameworks of understanding. Further, entrepreneurs deviate from existing product offerings and depart from societal norms and beliefs. Such departures are a means to create value in society and to bring forth ideas previously unimagined, but at times, entrepreneurs operate outside of society’s laws and regulations when doing so (Webb, Tihanyi, Ireland, & Sirmon, 2009). For brevity-entrepreneurs are innovators. In their investigation of the effect of EE on EI among college students, Mahendra, et al. (2017) revealed that EI is indirectly affected by EE, meaning that students’ entrepreneurial motivation and attitude are two important mediating variables.

Theoretical Framework

The theory of planned behaviour (TPB) depicts that an individual’s tendency to demonstrate a behaviour is affected by the individual’s interest in showing behaviour and the ability to make decisions (Anjum, et al., 2019). Various studies revealed that TPB is the most dominant and popular conceptual framework for the study of human action, more especially an individual’s intentions to engage in different activities (Ajzen, 2001). Ajzen (1991) explains that the central construct associated with the TPB is the individual’s intention to perform a behaviour, for instance, the intention of becoming an entrepreneur upon completion of the EE course.

Studies have found the theory of reasoned action and its extension, TPB (Ajzen, 1991), to be very useful in predicting a wide range of behaviour (Sheppard, et al., 1988; Madden, et al., 1992). The theory of reasoned action is based on the proposition that an individual’s behaviour is determined by the individual’s behavioural intention to perform that behaviour, which provides the most accurate prediction of behaviour (Chang, 1998). Therefore, this study is underpinned by the TPB, summarised in Figure 1 (Ajzen, 1985). The theory was intended to explain all behaviours over which people can exert self-control. The key component to this model is behavioural intent; behavioural intentions are influenced by the attitude about the likelihood that the behaviour will have the expected outcome and the subjective evaluation of the risks and benefits of that outcome.

Figure 1 Conceptual framework

The TPB has been used successfully to predict and explain a wide range of health behaviours and intentions including smoking, drinking, health services utilisation, breastfeeding, and substance use, among others (Wambach, 1997; Sanne & Wiese, 2018). The TPB states that behavioural achievement depends on both motivation (intention) and ability (behavioural control). This study considered TPB to provide a useful framework to analyse how entrepreneurship education programme at Tshwane University of Technology might have influenced students’ entrepreneurial intentions. The theory distinguishes between three types of beliefs; which are behavioural, normative, and control. It is comprised of six constructs; viz, attitudes, behavioural intention, socials norms, subjective norms, perceived behavioural control and perceived power, that collectively represent a person’s actual control over the behaviour. Figure 1 attempts to make this explanation more explicit.

The objective of this study was to examine the extent to which EE influenced the EI of students at the Tshwane University of Technology. To achieve this objective; the researchers formulated the (null) hypothesis that students in the two study arms, first-year students (FYS) and those who were not in first year (NFYS) had similar intentions. This hypothesis was tested against the alternative that the students in the two arms had differing intentions.

Ethical Requiremntsand Test for Internal Consistency

Ethical clearance was granted by the Tshwane University of Technology Research Ethics committee (Clearance number: Ref#2018=04=005=Rankhumise EM et al). The purpose and the rights of the participants were explained to participants, priori, data collection. Participation in the study was voluntary; and anonymity and confidentiality of participants were assured to participants (Cohen, et al., 2013).

When items are used to form a scale or latent construct, they need to have internal consistency. The items should all measure the same construct. Therefore, they should be highly correlated with one another. Accordingly, a useful coefficient for assessing internal consistency is Cronbach's alpha (Bland & Altman, 1997). Therefore, Cronbach’s alpha, with a 0.7 cut-off point (Lance, Butts, & Michels, 2006), was used to test for internal consistency. The instrument subtheme of interest was entrepreneurial intention (EI).

Material and Methods

This cross-sectional quantitative study (Creswell & Creswell, 2017) followed the ex-post-facto design (Struwig & Stead, 2001; Cohen, Manion, & Morrison, 2013). The study used secondary data that was collected using a structured questionnaire. Data management was carried out using a combination of Epi-Info Version 7 and Stata Release 15 (StataCorp, 2017). A visual-analogue-scaled item were used to measure students’ EI (Struwig & Stead, 2001). The items used a scale of 0 (strongly disagree) to 10 (strongly agree) to indicate the opinion of the participant. Data analysis was performed using Stata Release 15. The Shapiro-Wilk test was used to test for normality of the data (Villasenor Alva & Estrada, 2009; Ghasemi & Zahediasl, 2012).

Descriptive statistics were presented as frequencies and percentages for categorical variables, and as percentiles and interquartile ranges for measured observations. The Wilcoxon-Mann-Whitney test (Bergmann, et al., 2000; Hart, 2001), which is a non-parametric analogue to the independent samples t-test, was used whether the observations of the samples FYS and NFYS were drawn from the same or identical (Fagerland & Sandvik, 2009; Hart, 2001; De Winter & Dodou, 2010). In other words, The Wilcoxon-Mann-Whitney test was used to compare the perceptions of the study arms. The findings were declared significant if the observed p-value was less than 0.05.

Results and Interpretations

Test for Internal Consistency and Test for Normality

Internal consistency (reliability) is a measure of how well the items on a test measure the same construct or idea (Letsoalo & Rankhumise, 2020); that is, it is a method of reliability in which one judges how well the items on a test that are proposed to measure the same construct produce similar results. The EI construct consisted of six items, as presented in Table 1. The EI’s items had Cronbach’s α of 0.9119 which indicated that all items were reliably testing underlying latent construct. Table 1 details the results.

Table 1 Test for Internal Consistency
Item Obs Sign Item-test
correlation
Item-test
correlation
Average interitem correlation Alpha
I am ready to do anything to be an entrepreneur (e1) 259  +       0.8422  0.7659  0.6286 0.8943
My goal is to choose entrepreneurship as a career (e2) 259  +       0.8559  0.7852 0.6217 0.8815
I am optimistic to establish a business in the future (e3) 259  +       0.8464 0.7717 0.6265 0.8935
I will make an initiative to start and run my own business (e4) 259  +       0.8544 0.7831 0.6225 0.8918
Through this course, I know the necessary practical details to start a business (e5) 259  +       0.8289 0.7472 0.6352 0.8970
I keep encouraging other people to study entrepreneurship education (e6) 259  +       0.7715 0.6682 0.6635 0.9081
Test scale          0.6310 0.9119

Normality tests are used to determine if a data set is well-modelled by a normal distribution and to compute how likely it is for a random variable underlying the data set to be normally distributed. Therefore, the tests are a form of model selection. Parametric tests assume that the data follows a normal distribution or a Gaussian distribution; that is, it is assumed that the populations from which the samples are taken are normally distributed (Ghasemi & Zahediasl, 2012). The assumption of normality is especially critical when constructing reference intervals for, for when this assumption does not hold, it is impossible to draw accurate and reliable conclusions about reality (ibid). The result, as presented in Table 2, indicates that the data were not normally distributed at 0.05 error rate.

Table 2 Shapiro-Wilk Test for Normality
Items Observations W V z Prob > z
I am ready to do anything to be an entrepreneur (e1) 267 0.92227 14.938 6.311 < 0.001
My goal is to choose entrepreneurship as a career (e2) 263 0.92409 14.395 6.220 < 0.001
I am optimistic to establish a business in the future (e3) 265 0.88479 21.995 7.212 < 0.001
I will make an initiative to start and run my own business (e4) 263 0.87889 22.967 7.310 < 0.001
Through this course, I know the necessary practical details to start a business (e5) 264 0.89444 20.086 6.999 < 0.001
I keep encouraging other people to study entrepreneurship education (e6) 265 0.92728 13.884 6.138 < 0.001

Summary Statistics

A total of 279 (153 [54.84%] first-year and 126 [45.16%] no first-year) students volunteered to take part in this study. It follows that the number of first-year students (FYS) was marginally higher than that of students who were not first-year students (NFYS). Table 3 presents the detailed distribution of the participants according to the year of study.

Table 3 Distribution of Students According to Year of Study
Level of study Frequency Percent
First Year 153 54.84
Second Year 62 22.22
Third Year 50 17.92
Fourth Year 14 5.02
Total 279 100.00

Table 4 depicts the summary measures of items that measured students’ intentions. Median (or 50th percentile) was used as a measure of central tendency and interquartile range was used as a measure of variability. The FYS’ interquartile ranges were marginally higher than those for NFYS. Therefore, the NFYS observations were consistent. NFYS groups’ medians for all items were higher than those for the FYS group (Shows in Table 4). The medians for the FYS group and NFYS group ranged between 7 and 8, and 9 and 10, respectively. The analysis suggests that the overall sentiments of the students in the two study groups hold positive entrepreneurial intentions.

Table 4 Summary Measures Between the Two Groups
Study Group Item 25th Percentile 50th Percentile 75th Percentile Interquartile range
First-Year Students I am ready to do anything to be an entrepreneur (e1) 5.00 7.50 9.50 4.50
My goal is to choose entrepreneurship as a career (e2) 5.00 7.00 9.00 4.00
I am optimistic to establish a business in the future (e3) 5.50 8.00 10.00 4.50
I will make an initiative to start and run my own business (e4) 5.50 8.50 10.00 4.50
 Through this course, I know the necessary practical details to start a business (e5) 5.50 7.50 9.50 4.00
I keep encouraging other people to study entrepreneurship education (e6) 5.00 7.50 9.50 4.50
No First-Year Students I am ready to do anything to be an entrepreneur (e1) 8.00 9.75 10.00 2.00
My goal is to choose entrepreneurship as a career (e2) 8.00 10.00 10.00 2.00
I am optimistic to establish a business in the future (e3) 8.50 10.00 10.00 1.50
I will make an initiative to start and run my own business (e4) 8.00 10.00 10.00 2.00
Through this course, I know the necessary practical details to start a business (e5) 8.00 9.50 10.00 2.00
I keep encouraging other people to study entrepreneurship education (e6) 6.50 9.00 10.00 3.50

Presentation of Inferential Statistics

The hypothesis that the FYS and NFYS had similar perceptions of EIs was tested at 0.05 error rate. Table 5 presents the results of rank-sum tests between the two study groups. It indicates that NFYS had significantly higher scores than their FYS counterparts in all items.

Table 5 Comparison of the two Groups on Entrepreneurial Intentions
Entrepreneurial intention’s items Rank-Sum P-value
First Year No First Year
I am ready to do anything to be an entrepreneur (e1) 15675.50 20102.50 < 0.001
My goal is to choose entrepreneurship as a career (e2) 14451.00 20265.00 < 0.001
I am optimistic to establish a business in the future (e3) 15669.50 19575.50 < 0.001
I will make an initiative to start and run my own business (e4) 15813.00 18903.00 < 0.001
Through this course, I know the necessary practical details to start a business (e5) 15660.50 19319.50 < 0.001
I keep encouraging other people to study entrepreneurship education (e6) 17073.50 18175.50 < 0.001

Discussion and Conclusions

This study sought to determine whether FYS and NFYS had significantly differing perspectives of EI at the Tshwane University of Technology. The result revealed that NFYS differed significantly with FYS suggesting that university-effect on students EI increased as students further their studies. The finding that entrepreneurship course increased students’ EI concurs with a number of studies, for instance, Ekpoh and Edet (2011) ascertained that EE influences the career intentions of tertiary school students. Similarly, Yusof et al. (2008) reported that EE taken by students across all the faculties in UNITAR had a positive effect on students’ mindset. Further, Efi (2016) found that the embedment of EE in the curriculum (of Nigerian tertiary institutions) has instilled and revived entrepreneurial spirits of students thereby providing them with realistic career options and also teaching them self-sustenance, and self-reliance. Kolvereid and Moen (1997) found that students given structured training in entrepreneurship programme in the school exhibited a higher EI and were mostly inclined to initiate personal businesses. As in Kuttim et al. (2014); Kim-Sun et al. (2016), this study reported that participation in EE had a positive effect on students’ entrepreneurial intentions. Importantly, EE enhances the development of entrepreneurial students’ characters, including among others; the opportunity to experiencing and practicing real contextual learning for developing their entrepreneurial capabilities (Mahendra, et al., 2017).

Another important observation from the study result is that participants in the study had positive EIs. As in Maresh et al. (2016); firstly-EE strengthens students’ positive attitudes towards EI. Secondly, the level of students’ reliance on social reference groups drops which allows them to make decisions on the EI. Third EE assists students to develop the skills and competencies to take advantage of entrepreneurial opportunities as they arise. The assertion is that EE can strengthen students’ attitudes positively towards EI and to enable them to take advantage of the opportunities. All these practices have the potential of developing self-efficacy among students EI. Notably, it could be concluded that NFYS and FYS differed significantly indicating that the university-effect on student EI increased as students’ level of studies increased.

Although several studies were on this locus, this study revealed that there is a positive relation between entrepreneurship courses and the intention to start businesses, particularly among the NFYS group. Most of the students had more desire of becoming entrepreneurs upon completion of their studies. These findings provided interesting vistas in terms of the integration of the pre-dispositions of students who participate in the entrepreneurial training or class with the view to identify a priori, those who are most likely to benefit from such a training intervention concerning their previous experience as well as the initial intention. To ensure the success of entrepreneurship education, it is imperative to link course content of the entrepreneurship with entrepreneurial eco-system. Finally, business feasibility seems to be a missing component in the entrepreneurship course content, therefore, it is suggested that this should form part of the course content or/and curriculum for entrepreneurship education.

Limitations of the Study

The study used a quantitative bivariate method of data analysis; future research may consider using a mixed-methods design to get more insight from both students and lecturers. Also, future research may consider the use of multivariable data analysis to account for more variability in the outcome of interest (EI).

Acknowledgements

The authors are grateful to Ms Maite Makgoba for data encoding and data management. Special appreciation goes to Mamosana Letsoalo for her input during the development of this article.

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