ENTREPRENEURSHIP INTENTIONS OF STUDENTS IN FREE ENTREPRISE AT TSHWANE UNIVERSITY OF TECHNOLOGY

Emerging Markets Review Vol. 1(1)

Available online at: http://newbizzjournal.comISSN: XXXX-XXXX

Academy of Markets & Commerce © 2012

ENTREPRENEURSHIP INTENTIONS OF STUDENTS IN FREE ENTREPRISE AT

TSHWANE UNIVERSITY OF TECHNOLOGY

Ndivhuho Tshikovhi

M Tech (Entrepreneurship) Student

Tshwane University of Technology

PO Box X680

Pretoria 0001

South Africa

Tel: +27 12 382 5756 / +27 72 358 5845

[email protected]

Richard Shambare

Department of Management and Entrepreneurship: Lecturer

Tshwane University of Technology

PO Box X680

Pretoria 0001

South Africa

Tel: +27 12 382 4425 / +27 74 459 9902

[email protected]

ABSTRACT

South Africa is among the least entrepreneurial nations. More specifically, South

African youths’, despite the prevailing high unemployment rates in the country, have

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Academy of Markets & Commerce © 2012 the lowest total early entrepreneurial activity (TEA), which is a measure of the

number of new venture start-ups. Consequently, universities increasingly incorporate

practical entrepreneurship training within their curricula. One such initiative is the

Students in Free Enterprise (SIFE), which among others aims at familiarizing and

encouraging students to engage in entrepreneurship activities. SIFE is an

entrepreneurship driven student structure which gives students an opportunity to

become social entrepreneurs. SIFE students are trained to look at entrepreneurship

opportunities within their communities and come up with solutions to address

economic, social and environmental needs. The efficacy of SIFE is that it provides

university students with the much-needed exposure and practical entrepreneurial

training that is likely to encourage them to consider entrepreneurship as a career

option. It is against this background that this paper argues that incorporating

practical entrepreneurial training in university curricula is likely to enhance students’

entrepreneurship intentions as well as their consideration entrepreneurship as a

possible career choice.

KEYWORDS: Entrepreneurship Intention, Entrepreneurship, TEA,

SIFE

INTRODUCTION

Globally, students’ lack of interest to engage in

entrepreneurial activity is a growing concern . This is

particularly true in developing countries such as South

Africa, where rising unemployment levels continually erode job

opportunities for college graduates. Without access to jobs,




Academy of Markets & Commerce © 2012 it therefore is reasonable to argue that entrepreneurship –

i.e. starting and running small businesses – invariably

becomes the next best option, but the existing literature

suggests that students’ motivation to embark on

entrepreneurship remains depressed . Although a review of the

literature shows that this phenomenon is widespread , the

Global Entrepreneurship Monitor (GEM) (2011) statistics

illustrate that in South Africa it is more severe. Despite

government programmes such as the National Youth Development

Agency (NYDA) and Small Enterprise Development Agency (SEDA),

which aim to encourage business start-ups, Global

Entrepreneurship Monitor (2011) reveals that South African

students, compared to their counterparts from other emerging

economies such as Brazil, have the lowest TEA, and accordingly

lag international averages in terms of initiating new venture

start-ups (NVSUs). Consequently, South African universities

increasingly are employing creative ways to encourage student

entrepreneurship. One such initiative is incorporating

practical entrepreneurial training within the university

curricula through programmes such as SIFE, A global students

organisation that foster entrepreneurship activities.

The efficacy of SIFE is that it provides university students

with the much-needed exposure and practical entrepreneurial

training that is likely to encourage them to consider




Academy of Markets & Commerce © 2012 entrepreneurship as a career option. In other words, SIFE, as

a practical entrepreneurial training programme not only help

students develop positive entrepreneurial intentions, but also

foster entrepreneurial self-efficacy. Thus, the purpose of

this paper is to investigate the impact that systems designed

to develop and improve entrepreneurship such as SIFE have on

individual students’ entrepreneurial intentions. In other

words, the paper explores how the SIFE experience influences

students’ attitudes towards starting new businesses.

To present these arguments, the Action-based entrepreneurship

education concept is discussed in the next section. Following

on, what SIFE is all about in relation to individual

entrepreneurial intentions’ concept is presented to develop

the proposed theoretical framework. Entrepreneurship in South

Africa as well as the Total Entrepreneurship Activities in

South Africa will be discussed to give a clear indication on

the needs of graduates to become entrepreneurs. Finally, we

propose the entrepreneurial intention model that comprise of,

entrepreneurship knowledge, perceived attitudes, social norms

and self-efficacy.

LITERATURE REVIEW

Action - based entrepreneurship education




Academy of Markets & Commerce © 2012 Universities are expected to play an important role in

society, in addition to research and teaching by pursuing a

“third mission” that of economic development (Etzkowitzet al.,

2000), Universities are now faced with changes or shifting

their curricula to also focus on “monkey see, monkey do”

(which is to actually learn by doing) kind of teaching.

Student’s structures such as SIFE are there to help fill this

gap, with its focus on creating the future entrepreneurs and

community leaders of tomorrow.

Kolvereid and Moen (1997) study found that graduates with an

entrepreneurship major are more likely to start new business

and have stronger entrepreneurship intentions than other

graduates. Peterman and Kennedy (2003) further demonstrates

that entrepreneurship action based education programmes

significantly influence students’ entrepreneurial intentions.

Hence SIFE in universities such as Tshwane University of

Technology (TUT) is becoming an aid in action-based

entrepreneurship education, the programme enables students to

investigate and solve economic, social and environmental

challenges within communities.

The term entrepreneurship education can be interpreted in two

ways: (1) learning about entrepreneurship as a phenomenon, or

(2) learning useful skills in order to become entrepreneurs




Academy of Markets & Commerce © 2012 (Rasmussen & Sorheim, 2006). SIFE therefore creates a platform

for university students to actually become entrepreneurs. The

recognition that education and prior entrepreneurial

experiences influences towards starting a business there are

other factors that play a role in students or individuals such

as personality traits to be considered by researcher (Young,

1997).

Students in Free Enterprise

Students in Free Enterprise (SIFE) is a global, organization

that creates global partnerships between business and higher

education; it prepares university students to make a

meaningful contribution toward a better world as entrepreneurs

and business leaders, by challenging them to address real

world business and economic challenges in their communities.

In South Africa there are 27 SIFE Teams in Universities and

other Tertiary Institutions. SIFE Teams conduct educational

outreach projects that create economic opportunities and make

a lasting difference and impact in their communities. SIFE

students’ focus is on empowering people in need by considering

the relevant economic, social and environmental concepts by

applying business and economic concepts and an entrepreneurial

approach to improve the quality of life and standard of living

(SIFE Handbook, 2011).




Academy of Markets & Commerce © 2012 SIFE students identify entrepreurial opportunities in

communities that will be solved through an entrepreneurial

approach. This is done by applying business concepts of

starting up a venture that will enable the community to

economically benefit without compromising the environment. The

sustainability of the business formed should be visible and

generate income for community members that initially didn’t

have any source of income. The members of the community are

also trained by SIFE students on how to start and run a

successful business. Students are supposed to come up with

funding and operation approaches that fit the community social

setting.

Entrepreneurship in South Africa

The unemployment rate in South Africa keeps on rising which is

becoming a worrying factor to the society and government

fearing economic emancipation from the youth which forms a

large part of the unemployed in the country (GEM, 2011).

According to GEM Report (2011), about 48.2 percent of the

unemployed in South Africa are the youth; the lack of skills

to be employed or entrepreneurs is seen as the cause (GEM,

2011). Most students do not consider entrepreneurship as a

viable career option but some study it in a believe and hope

to get employed with the qualifications obtained from higher

education and some are involved in structures such as SIFE.





Does a student use the opportunity given to participate in

student’s structures to build up future skills and knowledge

gain from their participation? In the face of increasing

unemployment, only few students graduate get experimental

training or internships that don’t sustain their career path.

Few of these graduates are engaged in entrepreneurship

(Gregory, 2011). Considering that three-quarters of students

enrolled at Tshwane University of Technology (TUT) are exposed

to entrepreneurship courses and entrepreneurship driven

support systems, it is reasonable to investigate the

relationship between entrepreneurship programmes and students’

intents towards entrepreneurship.

According to Klasen and Woolard (2008) South Africa has been

experiencing one of the highest unemployment rates in the

world. Using ‘narrow’ definition of unemployment (including

only those who are willing to work and actively searching),

South Africa had an unemployment rate of 28 per cent in 2004,

which is estimated to be at 25 per cent in 2012 (Klasen &

Woolard, 2008). The worrying factor is that graduates are not

even included in this phenomenon. The reality is shocking with

majority of the youth being unemployed, underemployed or

unemployable. The need to develop and transform university

students into self-sustaining entrepreneurs is more desire.





The effort that is being made by various support systems and

institutional structures designed to promote entrepreneurial

spirit amongst the youth are visible, but are these structures

doing enough to develop and improve entrepreneurship

intentions of the youth? There is limited research by scholars

with regards to both students that participate in SIFE in

general and on Students in Free Enterprise in Tshwane

University of Technology (SIFE TUT) in specific intents

towards being entrepreneurial. This paper attempts to

establish the relationship between entrepreneurial education

or participation in structures designed to foster

entrepreneurial activities to students, inclination towards

entrepreneurship as a career option.

Total entrepreneurship activity in South Africa

According to GEM Report (2011) the total entrepreneurship

activity (TEA) was driven by the youth between the ages of 25

- 34, the relative contribution to (TEA) of this age group has

declined by 12 percent while it has increased by eight

percentages for the 35 - 44 age group. This indicates that the

graduates that are likely to be at the age group of 25-34 are

not actively participating in the entrepreneurship activities.

This is a worrying factor as the entrepreneurship process has

been identified by policy makers and scholars as the only




Academy of Markets & Commerce © 2012 solution to poverty alleviation in South Africa. The GEM

Report (2011) further emphasises the importance of

implementing target interventions aimed at stimulating

entrepreneurship activity among this age group, and university

students have alternatives like SIFE to implement

entrepreneurship activities.

Bosma and Levie (2009) noted that economic development (or

welfare) is not the only factor determining entrepreneurship

rates. These authors further argue that entrepreneurial

attitudes and perceptions play an important part in creating

an entrepreneurial intention. Hence the studies main objective

is to measure entrepreneurship intentions of Students in Free

Enterprise in Tshwane University of Technology. The GEM Report

(2011) also supports that South Africa’s rate of

entrepreneurial intentions increased by 89 per cent. It is

still very low (17.6%). Considering South Africa’s high

unemployment rate (23.9%), it is highly concerning that few

individuals want to pursue entrepreneurship. It has now become

a university responsibility to produce graduates that are

equipped with skills ready to start and run a business, hence

SIFE is an alternative for over 27 universities and other

institutional universities in South Africa, and the

entrepreneurship intentions of the students participant in the




Academy of Markets & Commerce © 2012 program need to be investigated for future recommendations to

other institution globally.

SIFE and Entrepreneurship IntentionsThe Entrepreneurship Intentions (EI) model proposes that

entrepreneurial knowledge, personal attitudes, social norms, and

self-efficacy results in EI (Figure 1: below). SIFE develops all

these four. These are discussed next.

Figure 1: Entrepreneurial intention model

Entrepreneur

ial

Knowledge

Perceived

Desirability

Personal

Attitude

Entrepreneurial

Intention

Perceived Social

Norms

Perceived Feasibility




Academy of Markets & Commerce © 2012 (self –efficacy)

Source: Linan, 2004

SIFE and entrepreneurship knowledge:

SIFE provides a platform for students to action based

entrepreneurship education. Using an example to further

explain, take a student’s who has never been in any

entrepreneurship class or activities and didn’t know what

entrepreneurship is all about pre SIFE experience. Post SIFE,

it is highly likely that, the student can proudly define and

explain the entrepreneurship process to any person who dares

to challenge him/her about the entrepreneurship knowledge.

Being familiar with the business environment, makes students

more confident about their own capacity of becoming

entrepreneurs (Linan, 2004). The entrepreneurship knowledge

then influences all other aspects of the model.

SIFE and personal attitude:

SIFE encourages students to become leaders and entrepreneurs

of tomorrow, this are a perceived desirability that SIFE has

on its members. SIFE build the individual to believe in

starting and completing a task, which is a most needed

motivation to the youth. To show that they do not need to wait

for government handouts but work with what they have to become

better members of the society, who can positively contribute




Academy of Markets & Commerce © 2012 to the local economic development of their communities. The

entreprerial attitudes that SIFE instil in students to become

social entrepreneurs.

SIFE and perceived social norm:

Linan (2004) argued that social norms contribute very weakly

to explaining intention, but on this study the students will

be seen as social champions with much needed social change

they bring to their community through SIFE. The perception

that the community have about that students can also help the

students to get support from within the community when they

engage themselves in actual businesses.

SIFE and Self-efficacy:

Self-efficacy within a given domain is based on individual’s

perceptions of their skills and abilities. Entrepreneurship

self-efficacy displays an individual’s innermost thoughts on

whether they perceive themselves as having the necessary

abilities necessary to start and run a business (Wilson et al.,

2007). The believe that students have on their entrepreneurial

interns will be an important factor for them to actually

become entrepreneurs.

Some researchers including Wilson et al. (2007) have noted that

we are motivated throughout our lives by perceived self-




Academy of Markets & Commerce © 2012 efficacy rather than objective ability, and our perceptions

deeply affect both our affective states and our behaviour.

Bandura, Barbaranelli, Caprara, and Pastorelli (2001) included

self-efficacy as one of a variety of sociocognitive influences

on the career aspirations of children, and found that academic

self-efficacy had the strongest direct effect. Research by

Markham et al. (2002) further suggests that self-efficacy

reliably predicts scope of career options considered,

occupational interests, perseverance in difficult fields, and

personal effectiveness.

While the relationship between self-efficacy and career choice

has been well established in the career theory literature,

most studies have not included specific career options.

Certainly, it would seem logical that the same effects of

self-efficacy would exist in entrepreneurial careers around

entrepreneurship. Indeed, the concept of self efficacy on SIFE

students is an important factor to be discussed in the

entrepreneurship intentions. Self-efficacy or the belief in

one’s ability to succeed as an entrepreneur would seem to be

especially important (Wilson et al., 2007). Not surprising the

concept of self-efficacy has been used in much literature to

determine individuals’ career choice. In this study it is used

to determine entrepreneurship intentions of SIFE students.




Academy of Markets & Commerce © 2012 CONCLUSION

In conclusion, SIFE have good intentions of transforming

students into social entrepreneurs in order for them to solve

community’s problems and improve local economic development.

The main contributions from various entrepreneurship

programmes is that they are key role as facilitators for

entrepreneurship, but SIFE program allows students opportunity

to participate in an actually entrepreneurial setting. The

entrepreneurship intentions thereof students can only be a

choice an individual choice that several factors might come in

to influence, hence this study focused on SIFE as a cause of

entrepreneurial intentions of students at TUT.

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