An investigation into the factors affecting young people's entrepreneurial inclination: the case of selected areas in South Africa

Abstract

Entrepreneurship has been pointed out as a key driver of economic growth and development by academia, policymakers, and government institutions alike. Globally, youth unemployment figures are alarmingly high and entrepreneurship, especially among the youth, plays an important role in generating employment among this cohort. The purpose of this study was to determine the factors affecting the entrepreneurial inclination of employed and unemployed young people between the ages of 18 and 35 years. Measurement on the factors made use of a tested and validated entrepreneurial intention scale. Primary data were collected through the use of questionnaires. The sample was almost evenly split between employed (n=176) and unemployed (n=163) participants. Data were analysed through the use of a principal component analysis (PCA), descriptive statistics and chi-square tests. The findings of the study revealed that participants perceived the lack of the necessary entrepreneurial skills, difficulties in acquiring the necessary funding as well as insufficient support towards starting a business as the most important aspects deterring their entrepreneurial inclination. Chi-square tests further showcased significant differences in the perceptions of the employed and unemployed participants regarding the lack of market opportunities and the associated risk in starting a business. The results as presented in the study provide valuable insights to the areas of concern as well as recommendations towards reducing the obstacles for the youths' entrepreneurial involvement.