Thursday, 9 July 2015

Entrepreneurship Education and Entrepreneurship Intention



Entrepreneurship plays a very important role in a developing economy such as South Africa’s. It helps to create wealth, create jobs, increase economic efficiency and encourage technological innovation. Therefore it is highly desirable that education fosters an entrepreneurial intention among students. We can simplify this intention as the desire to start a business.

The importance of entrepreneurship education

If we look at the main traits of entrepreneurial intention we find that these are the appetite for risk taking, the person’s self sufficiency, their effectiveness, having been exposed to entrepreneurial activity and their gender[1]. Entrepreneurship education is an important precursor to entrepreneurial activity and there is a clear link between the two.

The Global Entrepreneurship Monitor (GEM) identifies entrepreneurial education as one of the key entrepreneurship factors that enhance new business creation. The latest GEM Global Report of 2014 finds that education is a key factor in building an entrepreneurial culture, particularly the education of young people at primary and secondary levels. It stresses that entrepreneurial education at an early age is a key element in fostering an entrepreneurial attitude in later life. This is so because it enhances entrepreneurial qualities like proactiveness, innovativeness and taking responsibility for one’s own choices.

The importance of entrepreneurship in South Africa

Because South Africa is a developing economy with a high rate of unemployment, entrepreneurship is one of the main ways that people are able to earn an income and – importantly – create income earning opportunities for others. In short, entrepreneurship creates jobs. In a country with an unemployment rate that varies between 25% and 40% depending on the source of the statistics, this is vitally important.

For this reason entrepreneurship education and a higher level of entrepreneurship intention can play a major role in addressing the country’s economic challenges. Higher levels of entrepreneurship intention will see more people starting businesses, which hopefully succeed and provide increasingly more people with jobs. The ripple effect of higher levels of entrepreneurship intention is that there will be an increased number of new business ventures, leading to more job creation, which in turn leads to higher levels of economic activity, especially amongst the youth. The result is a more robust economy and a more productive society, which can ultimately reduce crime levels as well.

Entrepreneurship and education in South Africa

There are some specific skills that running a business requires, such as managerial, financial and operational skills. These are the type of skills that education needs to provide young people with, so that they are equipped to go out and start successful businesses once they have completed their educations.

While we’ve identified that entrepreneurial education has to start at a primary level, there is a need for it at a tertiary level as well. In fact the mere transition from secondary to tertiary education brings with it a whole cluster of personal characteristics that need to be developed, which are also important for entrepreneurship. Students need to be transitioned from the hand-holding and spoon-feeding that so many schools provide, to a more independent way of learning that is required at a university. With all its freedoms, students to take more responsibility for their own educational success.

Tertiary entrepreneurial education also plays a major role in entrepreneurship in the sense that a more highly educated person is more likely to start a sustainable business. This has placed further emphasis on the need for South Africa to develop entrepreneurship training programmes among the youth. The way that entrepreneurship is often expressed in South African is through people starting informal businesses. This highlights the need for entrepreneurial education, given the importance of informal businesses in the South African economy, which are estimated to contribute 20% to national GDP.



Notes:
1. Zhang, Duysters & Cloodt, The role of entrepreneurship education as a predictor of university students’ entrepreneurial intention Springer Science Business Media 2013

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