Entrepreneurial Intentions And Behaviour Of South African University Students

Description
On this data account entrepreneurial intentions and behaviour of south african university students.

Global University Entrepreneurial
Spirit Students’ Survey:
South African Report 2008-2009

Entrepreneurial Intentions and Behaviour of
South African University Students

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The goal of the Global University Entrepreneurial Spirit Students’ Survey (GUESSS) was to
examine, explain and discuss the behaviour and intentions of students in their decision to start
entrepreneurial activities, across countries. This report has been written as part of the
international GUESSS research project to compare entrepreneurial intentions and activities of
South African tertiary students with their counterparts internationally. The GUESSS project
name replaces the former project name International Survey on Collegiate Entrepreneurship
(ISCE).

GUESSS has evolved from its inception in 2003, in which Switzerland (initiated by the Swiss
Research Institute of Small Business and Entrepreneurship at the University of St. Gallen) and
Germany (European Business School) were involved, to its format in 2008 where 19 different
countries took part. In South Africa, at a national level, the project was coordinated by
Dr MJ Scheepers of the Department of Business Management, University of Stellenbosch.
The 19 participating countries were Germany, Switzerland, Liechtenstein, Austria, Belgium,
France, Luxembourg, Ireland, Finland, Hungary, Estonia, Greece, Portugal, New Zealand,
Singapore, Australia, Indonesia, Mexico and South Africa. Over the years of the project
several country-specific trends and international trends have been discernable in terms of
student entrepreneurship. Since the same questions, scales, methods and constructs were
used across different countries and universities, a tangible comparison of tendencies and
trends could be made. The 2008 project and its output are published on the Internet at
www.guesssurvey.org.

This study presents some encouraging findings concerning entrepreneurship in South Africa.
It was found that while a fifth of the university students in the sample prefer an entrepreneurial
career directly after graduation, the majority consider entrepreneurial employment five years
after graduation. Students contemplating starting their own business generally think of basing
their enterprises in the services sector on the concept of established business concepts,
reflecting a similar trend, highlighted by previous studies, such as the Panel Study on
Entrepreneurial Dynamics and the Global Entrepreneurship Monitor studies. Most students
only take tentative steps, such as information-gathering and thinking through business ideas,
while close to a fifth write business plans, talk to potential financiers or develop a prototype. A
small portion of students participating in the study (slightly more than 2%) have already
established businesses during their studies. A quarter of these businesses reflect the dynamic
nature of entrepreneurship, closing within two years, suggesting that some of these ventures
may have a short- or part-time nature.

Universities can support and facilitate entrepreneurial efforts in a variety of ways, such as
offering entrepreneurship seminars and lectures as well as business project plan seminars
and providing contacts for general questions. Although most students who make use of these

Preface

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services are quite satisfied with them, it is recommended that universities should do more to
support and stimulate entrepreneurship at universities, when one takes into account that the
students of today are the leaders and entrepreneurs of tomorrow. Several suggestions are
offered in Chapter 6 as to the important role universities can play.

We would like to extend a word of thanks to the participating universities in South Africa,
namely the University of Stellenbosch, the University of the Free State, the Nelson Mandela
Metropolitan University, the University of Johannesburg, North-West University, the University
of the Western Cape, the University of Cape Town, and the University of Pretoria. Without the
support and efforts of these universities and their representatives the project would not have
been realised to the current level.

We would also like to thank our main sponsor, Van Schaik (www.vanschaik.co.za), an
academic book publishing company, as well as British Telecom, South African Breweries and
the Department of Business Management at the University of Stellenbosch for sponsoring the
“lottery” of incentive prizes for respondents.

This research project presents a wide range of useful information in relation to Academic
Entrepreneurship. On the one hand, there is a significant amount of entrepreneurial potential
amongst students. On the other hand, however, we see that there is still room for
improvement in some areas, such as support, training and further education, at different
academic and societal levels. In conclusion, we hope that this project will provide students,
authorities, professors, teachers and private service providers with a wealth of ideas,
incentives and motivation to help develop a real entrepreneurial spirit amongst academics.
We trust that this report will provide food for thought and may inspire you to infuse your
teaching and interaction with entrepreneurial flair.

University of Stellenbosch, July 2009
Department of Business Management

Dr MJ Scheepers
Senior Lecturer: Entrepreneurship & Innovation Management

Mr G Solomon
Lecturer: Entrepreneurship & Innovation Management

Ms A de Vries
Lecturer: Financial Management

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1. INTRODUCTION 8
1.1 Entrepreneurship and economic growth 9
1.2 Entrepreneurship: a matter of learning? 12
1.3 Entrepreneurship and education 12
1.4 Entrepreneurship and higher education 14
1.5 Policy and initiatives 15
1.6 Reasons for a study on South African students’ entrepreneurial intentions 17

2. METHODOLOGY 19
2.1 Goals of the study 19
2.2 Significance of the study 22
2.3 Sample and representativeness 23
2.3.1 Participating universities 23
2.3.2 Current level of study 24
2.3.3 Field of study 25
2.3.4 Age profile of students 26
2.3.5 Gender profile of students 27
2.3.6 Time spent studying and working 27
2.4 Sample summary 28

3. ENTREPRENEURIAL ENVIRONMENT AT INSTITUTES OF HIGHER EDUCATION 30
3.1 Entrepreneurial context 30
3.1.1 International views on the importance of university services 31
3.1.2 Detailed results for South Africa 31
3.2 Awareness of university services 32
3.2.1 Students’ awareness of the existence of university services internationally 32
3.2.2 South African students’ awareness of the existence of university services 33
3.3 Utilisation of university services 34
3.3.1 Students’ utilisation of university services, internationally 34
3.3.2 South African students’ utilisation of university services 34
3.4 Satisfaction with university services 35
3.4.1 Students’ satisfaction with university services, internationally 35
3.4.2 South African students’ satisfaction with university services 35
3.5 Summary 36

TABLE OF CONTENTS

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4. ENTREPRENEURIAL ACTIVITIES AND GOALS 38
4.1 Students’ professional expectations 38
4.1.1 Students’ thoughts of setting up their own business 38
4.1.2 Students’ career expectations 40
4.1.2.1 Detailed breakdown of career expectations of South African students directly after
graduation 41
4.1.2.2 Detailed breakdown of career expectations of South African students five years after
graduation 43
4.1.2.3 Detailed breakdown of career expectations of international students five years after
graduation 44
4.3 Intention of students to establish a business 46
4.3.1 Industry of potential business establishments 46
4.3.2 Innovativeness of potential business establishments 47
4.3.3 Experience of respondents for potential business establishments 48
4.3.4 Activities undertaken to establish planned business 49
4.4 Businesses established by students 51
4.4.1 Number of employees in established businesses 53
4.4.2 Revenue generated by established businesses 54
4.4.3 Performance of established businesses 55
4.4.4 Satisfaction of entrepreneurs of established businesses 56
4.5 Summary 58

5. THE INDIVIDUAL STUDENT’S CONTEXT 61
5.1 Career motivations 61
5.1.1 Reasons for choosing an entrepreneurial career 61
5.1.2 Reasons for choosing a career 63
5.2 Family business background 65
5.3 Summary 67

6. CONCLUSION 68
6.1 Important findings of this study 68
6.2 The role of universities 72

BIBLIOGRAPHY 74

APPENDIX 76
Country participation across 19 countries 76

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Table 2.1: SA university participation 23
Table 2.2: Sample summary for both the international and SA sample 28
Table 3.1: Students’ views on the importance of university services, internationally 31
Table 3.2: SA students’ views on the importance of university services 32
Table 3.3: Students’ awareness of the existence of such services at their universities,
internationally 33
Table 3.4: SA students’ awareness of the existence of such services at their universities 33
Table 3.5: Students’ utilisation of university services, internationally 34
Table 3.6: SA students’ utilisation of university services 35
Table 3.7: Students’ satisfaction with university services, internationally 36
Table 3.8: SA students’ satisfaction with university services 36
Table 4.1: Comparison of industry sector in which existing and potential businesses would
preferably operate 46
Table 4.2: Comparison of the degree of innovation of the potential business 47
Table 4.3: Practical experience of SA respondents in four marketing categories 48
Table 4.4: Steps taken towards setting up a business, by the SA sample 49
Table 4.5: Year in which SA sample’s businesses were established 52
Table 4.6: Year of closure of businesses for SA sample 52
Table 4.7: Average number of employees of business start-ups 53
Table 4.8: Average revenue for SA sample 54
Table 4.9: SA sample’s current performance in comparison to the competition 55
Table 4.10: SA sample’s performance in the last three years in comparison to the
competition 56
Table 4.11: Personal satisfaction of SA students with their business start-up 57
Table 4.12: Personal satisfaction of international students with their business start-ups 58

LIST OF TABLES

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Figure 2.1: Framework of the 2008 study 21
Figure 2.2: Country participation in the 2008 GUESS survey 22
Figure 2.3: Comparison of SA and international respondents’ current levels of study 24
Figure 2.4: Comparison of SA and international sample, in terms of field of study 26
Figure 2.5: Age profile of SA and international sample 26
Figure 2.6: Gender analysis of the SA and international sample 27
Figure 2.7: Comparison of time spent studying vs. working between the SA and the
international sample 28
Figure 4.1: Comparison of SA and international respondents’ thoughts about starting a
business 38
Figure 4.2: Summary of students’ career expectations 40
Figure 4.3: Detailed career expectations of students after graduation 42
Figure 4.4: Shift of professional expectations of SA students over time 43
Figure 4.5: Shift of professional expectations of international students over time 45
Figure 4.6: Comparison of the international and SA samples’ experience in terms of
marketing categories 49
Figure 4.7: Comparison of steps already taken for potential start-up by international
and SA sample 50
Figure 4.8: Comparison of sustainability of already established businesses 53
Figure 4.9: Average number of employees of business start-ups 54
Figure 5.1: Comparison of reasons for establishing business, between the SA and
international sample 61
Figure 5.2: Comparison of reasons for career choice between SA and international
sample 64
Figure 5.3: Comparison of the influence of family business reference group as a
reason for career choice, among SA and international sample 65

LIST OF FIGURES

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The Global Entrepreneurship Monitor (GEM) studies provide a good indication of the number
of individuals who are thinking about, actively involved in starting, or currently operating an
enterprise. Despite the importance of entrepreneurship and small- and medium-sized
enterprises (SMEs) to the South African economy, rates of entrepreneurship in South Africa
have been consistently low and much lower than other developing countries (Von Broembsen,
Wood & Herrington, 2005). Only five to eight out of every 100 adult South Africans are in the
process of starting a business or already own a business (Herrington, Kew & Kew, 2008).

Besides the fact that very few South Africans consider starting and/or start and run a
business, the quality of entrepreneurship is also low (Herrington et al., 2008; Von Broembsen
et al., 2005). Businesses which are started with an opportunity focus tend to create more
jobs, enjoy more differentiation and therefore experience less competition. Businesses
started out of necessity or survival motivation tend to create very few jobs, operate in markets
of intense competition and are vulnerable to outside forces, such as downward turns in the
economic cycle. In South Africa, too few opportunity-based businesses are started, although
the recent 2008 GEM report suggests this may be changing (Herrington et al., 2008).
Moreover, too few necessity-based businesses are started, compared to other developing
countries as indicated over a number of years in the Global Entrepreneurship Monitor (GEM)
South African reports (2002 – 2006).

Both internationally and locally the GEM reports provide evidence that owner-managers who
have a tertiary education tend to start enterprises which create more jobs, than owner-
managers with only a secondary or lower levels of education. Furthermore, entrepreneurship
education is seen as a key prerequisite for raising the levels of entrepreneurship in South
Africa (Herrington et al., 2008; Von Broembsen et al., 2005). The GUESSS research report
provides insight into what South African university students’ views of entrepreneurship are and
what policy measures and curriculum changes are needed to further stimulate the
entrepreneurial spirit and encourage the start-up of more opportunity-based enterprises in
South Africa, ultimately leading to higher levels of job creation.

1. INTRODUCTION

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1.1 Entrepreneurship and economic growth

Entrepreneurship is often associated with facilitating national economic growth, innovation, job
creation, venture creation, rejuvenation of existing business, and even the redirection of
national institutional infrastructure. In this regard, Minniti, Allen and Langowitz (2005:14)
declare that entrepreneurship has substantial national consequences and as a global
phenomenon entrepreneurial activity absorbs a substantial amount of human and financial
resources.

In South Africa too, entrepreneurs play a seminal role in economic vitality. Entrepreneurs such
as Anton Rupert (tobacco and jewellery), Nicky Oppenheimer (mining and luxury goods), Sol
Kerzner (hospitality), Bill Venter (communications) and Jeremy Ord (information technology)
feature prominently in the history of South African entrepreneurship. Not only did their
ventures create numerous jobs, earn foreign exchange, contribute greatly to the tax base and
fund social investment, but they also served as models for innovation and change.
Entrepreneurial ventures contribute to economic growth and wealth creation by outsourcing
non-core activities and operations to other smaller enterprises, and funding and networking
with emerging ventures. These ventures and their leaders also serve as role models and
inspire other potential entrepreneurs. Cumulatively, entrepreneurial ventures have served as
South Africa’s economic foundation (Venter, Rwigema, Urban & Marks, 2008:19).

Nowadays, the economic growth of nations is intertwined with the volume and quality of its
entrepreneurs. Whole industries, such as biotechnology, personal computers, software, and
health-enhancing products, have been popularised by entrepreneurs. New or revamped
products, services and processes have spawned new markets and revived old ones
(Timmons, 1999:17). Venter et al. (2008:19) point out that “[f]ledgling start-ups have been
known to employ thousands and earn billions annually within a decade or two. Innovative
start-ups create wealth that trickles into the general economy, triggering secondary growth.”

Several examples of such entrepreneurial ventures are found in the South African economy:
De Beers, Rembrandt, Southern Sun Hotels, and in recent times, Dimension Data (Venter et

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al., 2008:19). These entrepreneurial ventures can be termed “gazelles” or “leaders of
innovation” that grow rapidly, creating wealth and jobs. These examples illustrate a general
point: high growth ventures often have modest origins but with a strong-minded, inventive
entrepreneur behind them, they have tremendous lasting impact on economic growth and job
creation in a country where unemployment, poverty, and inequality are part of the daily lives of
the majority.

Nieman (2006:12-14) argues that not only gazelles are important to the South African
economy, but also the whole small-, medium- and micro-business sector (SMME), for the
following reasons:
• The labour-absorptive capacity of the small business sector is higher than that of other
size-classes.
• The average capital cost of a job created in the SMME sector is lower than in the big
business sector.
• They allow for more competitive markets.
• They can adapt more rapidly than large organisations to changing tastes and trends.
• They often use local recycled resources.
• They provide opportunities for aspiring entrepreneurs, especially those who are
unemployed, under-employed or retrenched.
• Workers at the smaller end of the scale often require limited or no skills or training:
they learn skills on the job.
• Subcontracting by large enterprises to SMMEs lends flexibility to production
processes.
• They play a vital role in technical and other innovation.

The small business sector contributes to the South African economy primarily in three ways
(Nieman, 2006:13-14):
• Contribution to the gross domestic product (GDP): In 2002 SMEs contributed 36.1%
to the GDP, compared to 32.7% in 1995. SMEs accounted for at least half of the GDP
in the agricultural and construction sectors, and more than 40% of the GDP in the
trade, catering and accommodation, as well as the transport, storage and

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communication sectors. Small enterprises are especially significant in the
construction, trade, catering and accommodation, transport, storage, and
communication sectors. The 15.7% contribution made by micro-enterprises to value
added in the community, social, other personal services, finance and business service
sectors is second only to the contribution made by large enterprises.
• Contribution to employment: The small business sector contributed 55.9% of the
private sector employment in 2002. Small businesses, which are especially active in
the retail trade and transport, are the largest contributors to employment.
• Size of the SMME sector: The small business sector is the largest of all private sector
enterprises in South Africa, with 52% of all private sector enterprises falling into this
category of small, while 37% of South African enterprises are very small or smaller.

The Special Report on Entrepreneurship, published in May 2009 in The Economist, views
entrepreneurship as “cool” and an “idea whose time has come”. Wooldridge (2009) argues
that this rise in entrepreneurship can be attributed to the technological revolution, driven by a
trio of inventions, namely the personal computer, the Internet and the mobile telephone.
These inventions enable capital-poor entrepreneurs to reach mass markets and compete with
established giants. Examples of such ventures abound: the Internet provides a cheap
interactive platform, where companies such as eBay are able to connect buyers and sellers,
without them ever meeting face-to-face. Bloggers and online news services are challenging
the business models of established newspapers. Mobile telephone operators are able to
leapfrog existing landline operators in terms of users and services, compelling these giants to
become more responsive to customer needs. In other words, emerging entrepreneurs have
changed the established order of things and have in some instances created new industries,
corresponding to Schumpeter’s theory of “creative destruction”. These developments have
led to cultural changes and have popularised entrepreneurialism. Where merchants and
hawkers were once shunned and their activities regarded as peripheral, entrepreneurship has
become admired, celebrated by governments and embraced by generation Y (Wooldridge,
2009).

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1.2. Entrepreneurship: a matter of learning?

Even though defining entrepreneurship is not the goal of this report, it is essential to clarify
that entrepreneurship is not only about starting new businesses. In the words of Stevenson,
Roberts and Grousbeck (1989), entrepreneurship can be described as “the process of
creating value by bringing together a unique combination of resources to exploit an
opportunity”.

This definition implies that:
• entrepreneurship may vary in terms of the extent and number of times it occurs,
• entrepreneurship occurs in various contexts (start-up, corporate, social and others);
• entrepreneurship is a process that can be managed; and
• entrepreneurship creates value and it is opportunity-driven.

In other words, students educated in entrepreneurship may implement their entrepreneurial
spirit in different contexts – inside an existing enterprise, in a government or educational
institution or in a technological or other context. Regardless of the context, entrepreneurship
will follow a more or less structured process, and will be focused on an opportunity. These
perspectives should be shared with learners and students as they move through the education
system.

1.3 Entrepreneurship and education

Despite the apparent link between entrepreneurship and education, South Africa’s current
education system has been criticised in the past decade. Von Broembsen et al. (2005) argue
that the education system in South Africa needs to improve dramatically if entrepreneurship is
really a pressing issue on the national agenda. Although South Africa’s school system does
not appear to be worse than other developing countries at promoting entrepreneurship, South
African learners fare poorly in areas such as comprehension, maths and science. Especially
black Africans in former black African schools have a lower chance of passing matric or
gaining university entrance than their white counterparts. Given the strong correlation

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between education and entrepreneurial activity, the continued failure of the school system for
the majority of South Africa’s population is worrying. Clearly, therefore, a major part of the
long-term solution to South Africa’s low levels of entrepreneurial activity must lie in
improvements in education.

Four areas appear to be important:
1. At a fundamental level, we need to see a significant improvement in the efficiency of
education expenditure leading to performance improvements in former black African
schools.
2. Entrepreneurship education can increase students’ awareness of the importance of
entrepreneurship and the contribution it can make to communities, society and the
economy. By learning about entrepreneurship, students realise the possibilities that
entrepreneurship can offer and gain insight into entrepreneurship as a career path.
3. There is evidence that education can positively influence students’ attitudes to and
knowledge of entrepreneurship. This is important because it suggests that with
effective delivery, appropriate entrepreneurship education could significantly increase
the proportion of students who believe they have the skills to start a business. Given
the extremely strong positive association between entrepreneurial self-confidence and
actual entrepreneurial activity, this could be expected to raise the rate of
entrepreneurial activity (Orford, Herrington & Wood, 2004:33).
4. As a number of entrepreneurship academics have pointed out (Nieuwenhuizen &
Groenewald, 2008; Urban, 2006; Ladzani & Van Vuuren, 2002), students should also
be taught entrepreneurial and business skills. Entrepreneurial skills include
recognising opportunities, creating and applying novel concepts, and performing
feasibility assessments. Strongly linked to entrepreneurial skills are business skills,
which include planning, financial management, marketing management, information
management, procurement and negotiation. The transfer of these skills increases an
individual’s chances of entrepreneurial success.

The Global Entrepreneurship Monitor 2008 (Herrington et al., 2008) further supports this view
and points out that the current education systems are failing to prepare primary and

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secondary school learners adequately to participate in the economy and that only 15% of
matriculants proceed to tertiary university studies. However, the GEM data does suggest that
current entrepreneurs with higher education seem to be involved with higher-growth
businesses, providing more employment, compared to business owners with secondary and
lower levels of education. Therefore, it is vital to determine what the career expectations of
students at higher educational institutions are, since these individuals will play a prominent
role in the South African economy in the near future.

1.4 Entrepreneurship and higher education

Student career expectations are influenced by a variety of factors such as the changing career
world, characteristics of various careers, financial factors, education-related factors, family
background and role models (Von Broembsen et al., 2005; Kroon & Meyer, 2001).
Entrepreneurship educators are often urged to consider how their modules and approach to
teaching entrepreneurship can influence students’ attitudes and intentions towards
entrepreneurship (Nieuwenhuizen & Groenewald, 2008; Kroon & Meyer, 2001).
Earlier empirical work of Owusu-Ansah and Fleming (2002) and Ibrahim and Soufani (2002)
found that entrepreneurs who participated in entrepreneurship courses exhibited higher
tendencies to start their own businesses compared to those who attended other business
courses, or who did not attend any courses. Ladzani and Van Vuuren (2002), who share this
view, highlight the pivotal role training plays in supporting small businesses. They propose
that entrepreneurship education is essential for starting and managing a business and
therefore it has a powerful influence on entrepreneurial intentions.
While some may argue that tertiary entrepreneurship courses are too theoretical, Sullivan
(2000) found that entrepreneurs believe that the foundational knowledge gained by
participating in academic courses were valuable, when confronted with “real-life” events.
Explicit knowledge of entrepreneurship concepts enabled graduates to reflect cognitively on
the incidents and determine what learning had taken place. In other words, the ability to
dissect, reflect, learn and act on a critical incident was seen to be of great importance

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(Nieuwenhuizen & Groenewald, 2008). Therefore it is expected that education can positively
influence entrepreneurial intentions.
Since higher education institutions in South Africa have considerable freedom in designing
and structuring entrepreneurship and business curricula, there is great diversity among
university offerings. However, entrepreneurship studies usually form part of the commerce
faculties’ offerings. At some universities, engineering faculties also offer entrepreneurship
courses. In entrepreneurship modules soft skills such as creativity, problem solving,
leadership, communication and opportunity recognition are taught in conjunction with the more
traditional small business management skills such as business planning and financial and
marketing management.
The importance of tertiary education is reflected in the Global Entrepreneurship Monitor High-
Expectation Report 2005 (Autio, 2005). Autio (2005) found that high expectation ventures
expected to employ 20 or more employees within the next five years. Analysing samples from
both the United States and Europe, it was found that high expectation ventures could partly be
explained by high-income, well-educated individuals, motivated by opportunity. It is suggested
that individual-level trade-offs are involved and that higher income and education could
mitigate the risk of uncertain earnings involved with a new venture (Autio, 2005).
Furthermore, entrepreneurship education benefits not only those individuals who would like to
start their own businesses, but also contributes to creating a talented, competitive, skilled,
creative and entrepreneurial workforce; a key intangible asset in today’s competitive business
environment.

1.5 Policy and initiatives

Evidence of the South African government’s commitment to stimulating youth
entrepreneurship can be found in their economic policies and youth development initiatives.
Until recently, youth entrepreneurship was promoted and facilitated through the National Youth
Commission (NYC) and Umsobomvu Youth Fund (UYF) Policy, who merged to form the
National Youth Development Agency (Tshabalala-Msimang, 2009). Their work has been
diverse, with country-wide initiatives through the National Youth Service (NYS) to train and

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empower officials to identify and implement youth empowerment projects, enable young
people to access economic opportunities in several sectors such as tourism, information and
communication technology (ICT), and events such as the Soccer World Cup, as well as to
develop the skills and knowledge of young people to enable them to become active
participants in the economy (Mkhize, 2007).

It is estimated that the Umsobomvu Youth Fund (UYF) annually spends R500 million on its
youth entrepreneurship programme, which focuses on three major projects: enterprise
funding, micro-finance and business development services.

The enterprise funding project recently launched the FNB-Momentum-UYF Progress Fund,
which complements the Franchise Fund, launched in partnership with business partners, while
the micro-finance project is focused on entry-level investments, and its pilot projects with the
Nations Trust and Nicro Enterprise Finance are funding micro-enterprises and cooperatives.
The third project, business development services, is a voucher programme that helps young
entrepreneurs to access business support from approved service providers through vouchers
ranging in value from R1 500 to R23 000 (Kekana, 2003).

Private sector initiatives complement government’s efforts to stimulate youth
entrepreneurship, while a large number of private enterprises also focus on stimulating
entrepreneurship as part of their social responsibility programmes. Large multinationals such
as South African Breweries (SAB) and Sasol offer funding or incubator services. SAB’s
KickStart programme focuses on enterprise development through promoting business
awareness by providing training, supplying grants as start-up capital and providing post-
training mentorship and assistance during the setting-up phase of the business (SAB
KickStart, 2009). Several financial services companies such as Investec, Sanlam, First
National Bank, to name but a few, also support and champion initiatives to stimulate
entrepreneurship. For example, Investec supports projects such as (1) junior achievement,
focused on exposing secondary school learners to entrepreneurship, within an incubator
setting; (2) the Business Place, a network of walk-in centres for entrepreneurs, offering
support and information services to potential entrepreneurs, and (3) a Traders’ Fair, consisting

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of a Craft Market at its Sandton Office. While Sanlam offers a “Creativity for Progress”
competition for universities across the country, unleashing social entrepreneurship, FNB offers
a “University Business Challenge” online. While private sector enterprises sometimes build
networks with universities, more can be done to facilitate closer working relationships between
higher educational institutions and the private sector.

Within universities and private educational institutions a wide range of training programmes
and support services, often linked to community interaction activities, are offered to stimulate
entrepreneurship. There is also the will to increase contact between educational institutions
and companies in order to promote cooperation. Over the long-term, the impact of these
initiatives will raise the importance of entrepreneurship education and should translate into
higher levels of youth entrepreneurial activities (Terblanche, 2009).

1.6 Reasons for a study on South African university students’ entrepreneurial
intentions

Based on the information presented above, a number of reasons have been identified to study
the entrepreneurial intentions of South African university students:
• The South African government is committed to developing the economy and creating
more job opportunities. Entrepreneurship is seen as instrumental to achieve this
objective.
• The South African government wishes to pursue a proactive policy regarding education
and entrepreneurship. As a result, a whole range of initiatives has been launched in
SA with the aim of stimulating entrepreneurship – especially for the youth.
• High-potential ventures are started by individuals with higher incomes and education
levels, focused on opportunity entrepreneurship. These types of ventures could be
shaped and developed during university years, with appropriate support from relevant
stakeholder groups.
• The study would provide a benchmark for university educators to determine if and how
the entrepreneurial intentions of tertiary students change over time.

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• Since students are the economic leaders of the future, their career expectations and
perceptions of entrepreneurship are very relevant and should be studied.

The relevance of entrepreneurship for growth and future economic development necessitates
a study on the attitudes, behaviour and career intentions of tertiary students. Despite the
policy emphasis on youth entrepreneurship and small business development, higher
educational institutions can also play a vital role in shaping the attitudes of future economic
leaders.

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2. METHODOLOGY

GUESSS is an acronym for the Global University Entrepreneurial Spirit Students’ Survey
which is based on voluntary cooperation among representatives from 19 different countries.
The initiative began through the Swiss Research Institute of Small Business and
Entrepreneurship at the University of St Gallen and the KfW Endowed Chair for
Entrepreneurship at the European Business School. This core team was responsible for
developing the questionnaire, coordinating international efforts in conducting the survey and
publishing the findings of the survey.

Each of the 19 countries participating in the survey has one representative, who was
responsible for contacting students in that country. The representatives were asked to email
the link to the questionnaire to as many students as possible, encouraging them to participate
in the survey. In South Africa lecturers at various universities across the country disseminated
the invitation to participate in the GUESSS study by making announcements in lectures to
students, placing website advertisements, and displaying posters on university campuses.
Lottery prize draws amongst respondents were also used as an incentive to increase students’
participation in the survey. The survey was administered via a web-based questionnaire. On
completion of the survey, all data was processed by the core team and then datasets were
disseminated to the national representatives in each country in order to author national
reports.

2.1 Goals of the study

Research studies in recent years, based on the Global Entrepreneurship Monitor reports, have
shown a strong relationship between education and enterprise creation. Individuals with
tertiary education have the potential to create sustainable enterprises which survive beyond
the “three year crunch” and tend to create more jobs, compared to businesses started by
individuals with secondary or primary education.

GUESSS represents an entrepreneurship research platform which aims to investigate student
perceptions of entrepreneurship at tertiary educational institutions every two years.

20

The primary goals of the project are to investigate the following:
• The start-up process: GUESSS helps to systematically record the founding intention
and activity of students on a long-term basis, and makes a temporal and geographical
comparability possible (panel study).
• The university: GUESSS offers a temporal and geographical comparability providing
universities with insight into the organisation of entrepreneurship (such as
entrepreneurship courses, founding climate, university support services among
others).
• The individual: GUESSS allows for a temporal and geographical comparability of
individual-based characteristics that impact the founding intention and activity of
students.

The secondary goals of GUESSS are to:
• observe the quality of the start-ups created by students (e.g. jobs, turnover, etc.);
• assist in identifying students’ perceptions of the entrepreneurial process;
• enable participating countries to reflect on their entrepreneurial spirit with regard to
specific basic founding conditions that drive students to become entrepreneurs;
• help with the verification and establishment of explanatory approaches at various
levels of analysis (e.g. individual, process, macro-economical effectiveness) for the
investigation of the founding intent and activity of students; and
• help to generate research models and verify existing ones of entrepreneurial intention
and behaviour.

21

Figure 2.1: Framework of the 2008 study

The framework of the 2008 study, shown in Figure 2.1, illustrates firstly the process of new
start-ups of students. Therefore, it is relevant to know which career aspirations students have
directly after their studies. Subsequently, the study focused on students’ entrepreneurial
intentions, specific activities taken and also those who have already started ventures.
Secondly, it shows that the university as a context for tertiary education offers several
educational programmes within a specific climate, various different types of studies and
faculty; these factors also influence the student entrepreneurial pre start-up process. Thirdly,
it indicates that students as individuals are influenced by their socio-demographic
characteristics, personal goals, innovation orientation and family business reference groups,
in turn influencing the start-up process. This model was used to assess student
entrepreneurial intentions and behaviour. It is relevant to mention that despite the fact that
laculLy/Þrogramme of sLudy 8ange of courses and supporL
unlverslLy as conLexL (sub[ecLlve percepLlon)
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CccupaLlonal
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LnLrepreneurlal
lnLenLlon
Llved
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lndexed enLrepreneurlal power
LsLabllshmenL process and goals
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Soclo-
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lnnovaLlon
CrlenLaLlon
lll

22
intention is the starting point of most entrepreneurial ventures, only one in eleven of people
with self-employment ideas actually start a business (Neck, Zacharakis, Bygrave & Reynolds,
2003).

The distinctiveness of this project is highlighted by the ability to compare the entrepreneurial
intent and behaviour of tertiary students from different countries, thereby enabling the
identification and sharing of best practices with regard to entrepreneurial education. As the
project is carried out on an international level, results from South Africa can be benchmarked
with other countries worldwide, such as Mexico, Finland, France, Singapore, New Zealand,
Austria, Switzerland, Germany, Hungary and Belgium.

2.2 Significance of the study

The sample on which the study is based consisted of 63 580 questionnaires for analysis,
coming from 19 countries, as shown in Figure 2.2.
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14000
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Figure 2.2: Country participation in the 2008 GUESS survey

Some countries, such as Switzerland (12 685 respondents) and Germany (7 626
respondents), have participated in the survey three times and these countries tend to show

23
higher response rates, due to learning effects during data collection. Singapore (2 319),
South Africa (2 203) and Estonia (1 548) collected a comparable number of responses, while
some countries, such as Australia (89) and Portugal (60), collected too few responses to
enable meaningful comparisons.

2.3 Sample and representativeness

In describing the sample, the participating universities, level of study of the respondents, field
of study, age and gender profile, as well as time spent on studying and working is presented in
the next sections.

2.3.1 Participating universities

The sample obtained from the survey in South Africa was drawn from eight universities, as
shown in Table 2.1, with 2 203 students participating in survey.

Table 2.1: SA university participation
University Per cent %
University of the Free State 51.2
University of Stellenbosch 28.9
Nelson Mandela Metropolitan University 7.6
North-West University 4.6
University of Johannesburg 4.0
University of the Western Cape 1.3
University of Cape Town 1.1
University of Pretoria 0.5
Others 0.6
Total 100

As shown in Table 2.1, the majority of the respondents (80.1%) were from two universities,
namely the University of the Free State (51.2%) and the University of Stellenbosch (28.9%).
This may have been due to the visibility of advertisements and announcements on these

24
campuses, inviting students to participate. Although the sample obtained may therefore not
be representative of the total student population of higher education in South Africa, a basis is
provided from which to work. Due to the large number of students (more than 2 000) who
completed the survey, valuable insights can be gained about how students experience
entrepreneurship classes, the university climate and the influence of reference groups such as
those with family business backgrounds.

2.3.2 Current level of study

Students were asked to indicate at which level of their studies they had progressed to. As
shown in Figure 2.3, the international and South African sample is compared in terms of three
study levels, namely Bachelor’s level studies, denoting students busy with undergraduate
studies, Master’s level studies, indicating graduate students enrolled for Master’s and further
qualifications, and postgraduate studies representing primarily doctoral level studies.

Figure 2.3: Comparison of SA and international respondents’ current levels of study

The data represented in Figure 2.3 shows that the majority (86%) of South African (SA)
respondents were still busy with their undergraduate studies, while 9.7% were enrolled for
Master’s programmes and 4.3% for postgraduate studies and doctoral (PhD) studies. In
comparison, the international sample was composed of 68.4% undergraduate students,
27.4% were graduate students enrolled in Master’s programmes and 4.1% were busy with
postgraduate and doctoral studies. The number of undergraduate students in the SA sample
is higher, in comparison to the international sample, while similar proportions of postgraduate
students completed the survey. Fewer SA graduate students proportionally completed the
68.4%
86.0%
27.4%
9.7%
4.1%
4.3%
0% 20% 40% 60% 80% 100%
International
South Africa
Undergraduate Graduate Postgraduate

25
survey, in comparison to the international survey. This may have been due to the method of
data collection in various countries, since graduate and postgraduate students at SA
universities have fewer or no classes and spend less time on campus; therefore it is possible
that they were not reached with the communication methods used to invite students to
complete the survey.

2.3.3 Field of study

Respondents were also asked to indicate in which field of study they were majoring or
pursuing their postgraduate studies, as represented in Figure 2.4. The majority of
respondents, both in the South African (38%) and the international sample (24%), were
enrolled in Business, Economics, Politics and Administration. The reason for the high number
of respondents from this field of study could be explained by the association of the
researchers to this category. Therefore motivation for student participation in the survey in
this field was relatively higher than for students in other fields. Furthermore, in South Africa,
entrepreneurship is offered within Economics and Management Science faculties and not
across faculties as might be the case for international universities. Therefore the survey may
have appealed mostly to entrepreneurship students, as it relates to a topic in which they are
interested.

The second largest response category was maths, computing and engineering studies, for
which 10% of SA respondents were enrolled, and 17% of the international sample, there-after
life and natural sciences (SA 9%; International 8%), then social and behavioural sciences (SA
8%; International 10%). Areas such as journalism and information, manufacturing, social,
personal and transport services and other categories were combined to form the “other”
category. Less than 8% of respondents indicated that they were enrolled for other categories,
namely health sciences, arts and humanities, law, architecture and teacher and training.

26
38
10
9
8
8
7
6
6
4
3
3
24
17
8
10
12
6
8
5
3
6
1
0 5 10 15 20 25 30 35 40
Business and administration
Maths, Computing and Engineering
Life and Natural Sciences
Social and Behavioural Sciences
Other
Health Sciences
Arts and Humanities
Law
Architecture
Teacher and Training
Agriculture
International
South Africa

Figure 2.4: Comparison of SA and international sample, in terms of field of study

2.3.4 Age profile of students

An age profile of the respondents was compiled, as depicted in Figure 2.5.

Figure 2.5: Age profile of SA and international sample

The majority (84.7%) of SA students in the sample were younger than 25 years, compared to
the international sample where 73.9% of respondents were younger than 25. As shown in
Figure 2.5, a small portion (9.7%) of the SA students were between the ages of 25 to 30,
compared to 18.4% for the international group, while 5.4% of the SA respondents were older
73.9
84.7
18.4
9.7
7.5
5.4
0% 20% 40% 60% 80% 100%
International
South Africa
30 years Missing

27
than 30, compared to 7.5% of the international respondents. The average age of the SA
sample was 22.3 years, slightly younger than the international sample, where the average age
was 23.4 years.

2.3.5 Gender profile of students

A gender profile of the students was compiled and is presented in Figure 2.6.
52.8
53.4
47.2
46.6
0% 20% 40% 60% 80% 100%
International
South Africa
Male Female

Figure 2.6: Gender analysis of the SA and international sample

As shown in Figure 2.6, there is not much difference between the respondents from a gender
perspective. In both the international and the SA sample, more males (slightly more than
half), than females participated in the survey.

2.3.6 Time spent studying and working

Respondents were also asked to indicate how much time they spent on studying and how
much time they spent on paid work, as illustrated in Figure 2.7.

28

Figure 2.7: Comparison of time spent studying vs. working between the SA and the international sample

Figure 2.7 demonstrates that the South African respondents spent 69.2% of their time
studying and 24.9% of their time performing paid work. This seems similar to the international
sample, where 67.6% of time was spent studying and 25.8% on doing paid work. This could
indicate that academic engagement has relatively equivalent time demands internationally,
however it appears that a quarter of students in the sample had already gained work
experience during their studies.

2.4 Sample summary

An outline of the profile of the sample is presented in Table 2.2. To sum up: the South African
sample consisted of 86% undergraduate students, 9.7% graduate students and 4.3%
postgraduate students, whose average age was 22.33 years, with the majority pursuing
business and administration (38%) and maths, computer and engineering studies (10%).
Slightly more males (53.4%) than females (46.6% students) participated in the study and
when asked how much time they spent on working vs. studying, respondents indicated that
close to 70% of their time was spent studying, as opposed to 25% on working.

67.6
69.2
25.8
24.9
6.6
5.9
0% 20% 40% 60% 80% 100%
International
South Africa
Studying Paid work Other

29
Tab|e 2.2: 3arp|e surrary lor oolr lre |rlerral|ora| ard 3A sarp|e
Sample Bachelors
%
Masters
%
Ph D
%
Age
average
years
Male
%
Female
%
Time
studying
Time
working
South
African
86.0 9.7 4.3 22.3 53.4 46.6 69.2 24.9
International 68.4 27.4 4.1 23.4 52.8 47.2 67.6 25.8
Table 2.2 illustrates that the international sample consisted of 68.4% at undergraduate level of
study, 27.4% at graduate level of study and 4.1% at postgraduate level of study, with an
average age of 23.4 years. Slightly more male (52.8%) than female students (47.2%)
participated in the survey, while the international sample shows a similar pattern of time spent
studying vs. working in the SA sample.

While the sample obtained is not representative of the entire student population of higher
education in South Africa and worldwide, the participation of the several highly regarded
universities and the large final sample has resulted in a stable basis from which we can draw
solid conclusions on both the national and the international levels. The next chapter focuses
on the university context and climate, while Chapter 4 will detail the career expectations,
attitudes toward entrepreneurship and activities undertaken by students to turn their
entrepreneurial dreams into reality.

30

3. ENTREPRENEURIAL ENVIRONMENT AT INSTITUTES OF
HIGHER EDUCATION
Since the GUESSS survey was carried out at institutions of higher education, it is important to
examine which types of entrepreneurial support services and activities are offered to students
at their universities.

3.1 Entrepreneurial context

Universities can offer a range of courses or support services to encourage entrepreneurship.
The growth in entrepreneurship-related courses and education over the last 10 years has
been tremendous. This trend started in the United States of America (USA), but has also
continued in countries such as South Africa, Australia, New Zealand, Switzerland, Germany,
Canada, China and Brazil, with a number of schools and universities, offering
entrepreneurship as a stand-alone course, capstone module, area of specialisation or a
separate degree. University services to stimulate entrepreneurship include entrepreneurship
seminars and lectures, often complemented by business plan courses. At some universities
lecturers or professors of professional practice provide start-up coaching services. In
addition, electronic start-up games and simulations form part of some universities’ courses,
while in South Africa First National Bank sponsors a National Business Challenge, where
university student teams voluntarily enter the competition and big prizes can be won.

Due to the positive influence of entrepreneurial role models on the entrepreneurial intentions
of students, many universities invite successful entrepreneurs into classes or hold regular
exchange experiences with founders. Other initiatives to stimulate entrepreneurial intent
include contacts for general enquiries about entrepreneurship, start-up financing offered
through university sources, and incubators. Incubators act as service centres for early-stage
ventures, where students pay minimal if any rent, and are allowed access to shared services
such as the Internet, fax facilities and a business address.

31
3.1.1 International views on the importance of university services

Students were asked to consider how important university courses or services were. Table
3.1 shows the views of students, internationally, of the importance of university courses and
services offered, in percentages.

Table 3.1: Students’ views on the importance of university services, internationally
University courses and services
Very
unimportant
Rather
unimportant
Rather
important
Very
important
Business plan project seminars 17.5 18.3 24.9 39.2
Start-up coaching 14.9 15.8 24.3 45.0
Entrepreneurship seminars and lectures 16.0 21.7 29.8 32.5
Start-up games and simulations 17.8 19.1 25.5 37.6
Regular round tables for founders (exchange
experiences) 17.4 20.7 26.9 35.1
Contacts for general questions 13.2 15.9 25.6 45.4
Start-up financing through university 16.3 18.1 25.5 40.1
Incubators (service centres for early start-ups) 15.0 18.0 26.6 40.4
n = 63 580

Internationally, students consider contacts for general questions, start-up coaching, incubators
and start-up financing as the most important university services, followed by business plan
project seminars, start-up games and simulations and founder exchange experience.
Entrepreneurship seminars and lectures are also regarded as important, but are regarded as
less important than the other courses and services universities offer.

3.1.2 Detailed results for South Africa

Table 3.2 provides an indication of the views of South African university students on the
importance of university courses and services offered, in percentages.

32
Table 3.2: SA students’ views on the importance of university services
University courses and services
Very
unimportant
Rather
unimportant
Rather
important
Very
important
Business plan project seminars 4.4 10.8 24.7 60.1
Start-up coaching 4.1 11.6 25.1 59.2
Entrepreneurship seminars and lectures 4.0 12.0 25.0 59.0
Start-up games and simulations 6.9 14.7 22.9 51.1
Regular round tables for founders (exchange
experiences) 5.3 15.3 26.3 53.1
Contacts for general questions 2.6 9.5 23.8 64.1
Start-up financing through university 6.0 10.7 23.0 60.3
Incubators (service centres for early start-ups) 4.5 12.3 25.9 52.8
n = 2 203

South African students also indicated that contacts for general questions and start-up
financing through universities were the most important university services; however, business
project plan seminars, start-up coaching, and entrepreneurship seminars and lectures were
also ranked very high in importance. Regular founder exchange experiences, incubators and
start-up games and simulations came in a close second. It is interesting that a much larger
portion (close to 75 - 85%) of South African students regarded these services as “rather
important” and “very important”, while internationally, rankings between 60 and 65% were
obtained.

3.2 Awareness of university services

Although universities may offer services to promote entrepreneurship, students cannot access
these services unless they are aware of them.

3.2.1 Students’ awareness of the existence of university services internationally

Students were asked to indicate their awareness of the existence of the abovementioned
university services at their universities. Table 3.3 shows that internationally many students do
not know whether their universities offer these courses or services. The highest level of
unawareness concerns the offering of incubator services, start-up financing and regular round
tables for founders. It seems as if half of the students who participated in the surveys are

33
aware of entrepreneurship seminars and lectures being presented at their universities. It
appears as if these services are not offered at all universities, which is understandable, taking
into account the resource constraints faced by public universities and the resource-
intensiveness of some of these services.

Table 3.3: Students’ awareness of the existence of such services at their universities, internationally
University courses and services Yes No Don’t know
Business plan project seminars 27.3 11.4 61.3
Start-up coaching 18.2 14.8 66.9
Entrepreneurship seminars and lectures 37.9 8.7 53.4
Start-up games and simulations 21.0 14.2 64.8
Regular round tables for founders (exchange experiences) 15.4 15.2 69.4
Contacts for general questions 24.1 12.7 63.2
Start-up financing through university 9.2 16.7 74.1
Incubators (service centres for early start-ups) 10.1 15.2 74.6
n = 63 580; all numbers in the table denote percentages

3.2.2 South African students’ awareness of the existence of university services

South African students are largely unaware of incubator services and regular round tables for
founders being offered at their respective universities. Similarly, awareness of start-up
financing, start-up games and simulations, and start-up coaching is low. Students indicated
that they were generally aware of entrepreneurship seminars and lectures, contacts for
general questions and business plan project seminars being offered at their universities.
Compared to the international scores, South African students seem slightly more informed
than their international counterparts.

Table 3.4: SA students’ awareness of the existence of such services at their universities
University courses and services Yes No Don’t know
Business plan project seminars 33.8 13.1 53.1
Start-up coaching 19.9 16.2 63.9
Entrepreneurship seminars and lectures 60.1 6.3 33.5
Start-up games and simulations 16.8 17.5 65.7
Regular round tables for founders (exchange experiences) 15.1 17.5 67.5
Contacts for general questions 50.2 9.4 40.4
Start-up financing through university 15.9 19.2 64.9
Incubators (service centres for early start-ups) 9.7 17.1 73.2
n = 2 203; all numbers in the table denote percentages

34

3.3 Utilisation of university services

University services to stimulate entrepreneurial intent among students need to be utilised if
these services are to be offered in future. Therefore, universities need to track students’ use
of these services.

3.3.1 Students’ utilisation of university services, internationally

Internationally, the highest number of students (24 114) made use of entrepreneurship
seminars and lectures and business plan project seminars. Other services that were also
used by students appear to be contacts for general questions, start-up coaching and start-up
games and simulations. Services that were not used by a large number of students were
incubators and start-up financing.
Table 3.5: Students’ utilisation of university services, internationally
University courses and services n Yes No
Business plan project seminars 17 333 35.9 64.1
Start-up coaching 11 587 18.9 81.1
Entrepreneurship seminars and lectures 24 114 41.9 58.1
Start-up games and simulations 13 345 32.7 67.3
Regular round tables for founders (exchange experiences) 9 813 29.2 70.8
Contacts for general questions 15 324 25.7 74.3
Start-up financing through university 5 866 11.2 88.8
Incubators (service centres for early start-ups) 6 449 10.3 89.7
n = 2 203; all numbers in the table denote percentages

3.3.2 South African students’ utilisation of university services

South African students exhibit similar patterns to international students in terms of the
utilisation of university services that facilitate entrepreneurship. Most students also utilise
entrepreneurship seminars and lectures and business plan project seminars offered by
universities. Furthermore, it appears that South African students make more use of contacts
for general questions, compared to international norm. Services that follow in popularity are

35
regular round tables for founders, start-up games and simulations, start-up coaching, start-up
financing and incubators.

Table 3.6: SA students’ utilisation of university services
University courses and services n Yes No
Business plan project seminars 743 38.1 61.9
Start-up coaching 439 29.2 70.8
Entrepreneurship seminars and lectures 1324 47.4 52.6
Start-up games and simulations 371 30.7 69.3
Regular round tables for founders (exchange experiences) 332 34.3 65.7
Contacts for general questions 1104 48.7 51.3
Start-up financing through university 351 24.5 75.5
Incubators (service centres for early start-ups) 213 24.4 75.6
n = 2 203; all numbers in the table denote percentages
3.4 Satisfaction with university services

As with all services offered, universities need to monitor the satisfaction of students using
these services. The feedback can then be used to improve, change or maintain services.

3.4.1 Students’ satisfaction with university services, internationally

Internationally, most students utilised entrepreneurship seminars and lectures (10 110) and
three-quarters of them indicated that their expectations had been met. Other popular services
include business project plan seminars and start-up games and simulations and again a large
portion (46% - 49%) of students were satisfied with these services. Students who made use
of start-up coaching, contacts for general questions, regular round tables for founders, start-
up financing and incubators also found that these services fulfilled their expectations. It would
appear that most students who utilise these services generally find them useful.

36

Table 3.7: Students’ satisfaction with university services, internationally
University courses and services n
Not
fulfilled
Rather not
fulfilled
Rather
fulfilled Fulfilled
Business plan project seminars 6 230 8.5 14.9 30.2 46.4
Start-up coaching 2 200 8.0 14.7 30.8 46.5
Entrepreneurship seminars and lectures 10 110 8.3 17.0 32.6 42.1
Start-up games and simulations 373 10.3 14.9 25.3 49.5
Regular round tables for founders 2 879 7.4 16.9 29.9 45.8
Contacts for general questions 3 936 6.5 14.6 31.1 47.9
Start-up financing through university 661 8.5 16.0 28.3 47.2
Incubators (service centres for early start-ups) 664 11.0 13.0 25.3 50.8
n = 2 203; all numbers in the table denote percentages

3.4.2 South African students’ satisfaction with university services

South African students exhibited similar patterns to international students, with most of them
having participated in entrepreneurship seminars and lectures and business plan project
seminars. The expectations of three quarters of students who made use of these services’
were fulfilled. Other popular services include start-up coaching, contacts for general
questions and regular round tables for founders. Although few students made use of start-up
financing and incubators, those who did were very satisfied with these services.
Table 3.8: SA students’ satisfaction with university services
University courses and services n
Not
fulfilled
Somewhat
not fulfilled
Somewhat
fulfilled Fulfilled
Business plan project seminars 283 6.7 12.4 35.3 45.6
Start-up coaching 128 5.5 19.5 36.7 38.3
Entrepreneurship seminars and lectures 627 5.1 13.9 33.0 48.0
Start-up games and simulations 113 12.4 17.7 32.7 37.2
Regular round tables for founders 114 7.0 18.4 36.8 37.7
Contacts for general questions 538 4.8 14.5 35.5 45.2
Start-up financing through university 86 9.3 15.1 17.4 58.1
Incubators (service centres for early start-ups) 52 11.5 21.2 21.2 46.2
n = 2 203; all numbers in the table denote percentages
3.5 Summary
Universities can offer a variety of courses or additional services to promote entrepreneurship,
such as entrepreneurship seminars and lectures, business plan competitions, start-up
coaching services, simulations, exchange experiences with founders, contacts for general

37
enquiries, and even start-up financing and incubator services. In both the international and
the South African sample contacts for general questions, start-up coaching and start-up
financing through universities were regarded as the most important university services.
Internationally, incubation services were regarded as very important, while the South African
sample regarded entrepreneurship seminars and lectures as well as business project plan
seminars as more important, compared to the international sample.

Despite the respondents’ views on the importance of these services, many students indicated
that they did not know whether their universities offered these services. In both the
international and South African sample students were generally unaware of whether their
universities offered incubation services, start-up financing or round tables for founders. The
South African sample did seem slightly more aware of whether their universities offered
entrepreneurship seminars and lectures, contacts for general questions and business plan
project seminars. The lack of awareness suggests that universities should promote
entrepreneurship support services more aggressively, since students cannot utilise services if
they are unaware of the existence of such services. When asked which services were
utilised, both internationally and in the SA sample, students indicated that entrepreneurship
seminars and lectures and business plan project seminars were utilised most widely and
students were generally very satisfied with these services. Other services also utilised by
students include contacts for general questions, start-up coaching and start-up games and
simulations. High levels of satisfaction were also reported. Services not used by many
students were incubator and start-up financing services. This may be ascribed to students not
being aware of these services, or that these services typically require students to have a very
well-developed business idea and business plan.

Taking into account the sample profile and university context, the next chapter considers the
goals and career expectations of students, the intention and operation of new ventures, as
well as activities students undertake during their studies to prepare them for their future
careers.

38

4. ENTREPRENEURIAL ACTIVITIES AND GOALS
4.1 Students’ professional expectations
Entrepreneurship has been promoted as a career choice, entrepreneurs are profiled as
heroes in the popular business press, and governments encourage entrepreneurship as the
solution to economic growth and job creation (Verreynne & Scheepers, 2008). However, as
career choices go, becoming an entrepreneur is one of the most risky, unstructured and
probably rewarding choices students can make; therefore university educators need to be
aware of students’ professional career expectations and they need to understand how
students reflect on starting a business or becoming involved in entrepreneurial activities.

4.1.1 Students’ thoughts of setting up their own business

To gauge students’ thoughts about starting their own businesses, respondents were asked if
they had ever seriously thought about setting up their own business. Their responses are
summarised and compared in Figure 4.1.

8.2
47.6
41.9
2.7
26
57.9
13.4
2.4
0
10
20
30
40
50
60
70
Never thought of
it
Dropped the idea Starting to do so Am self-
employed
South African
International

Figure 4.1: Comparison of SA and international respondents’ thoughts about on starting a business

Figure 4.1 shows that more international respondents (26.0%) had never thought of starting a
business as opposed to the South African sample (8.2%), while more than half (57.9%) of

39
international students and slightly less than a half (47.6%) of the South African students had
thought of starting a business, but had dropped the idea. When comparing whether students
were starting to consider opening a business, slightly more than two fifths (41.9%) of South
African students indicated they were inclined to start a business, compared to only 13.4% of
international students. It is encouraging that many SA students realise that there is a need for
entrepreneurship within the local economy, especially against the background of high levels of
unemployment. It seems that the school and university systems stimulate students to think
about entrepreneurship as a career option. Interestingly, 2.7% of SA students and 2.4% of
international students in the sample were already in business. While it is generally the norm
that students focus on their studies at university and not on business-related activities, a small
portion of students already take the plunge to work for themselves during their studies.

The results from Figure 4.1 suggest that SA students are more entrepreneurially inclined and
efforts should be made to support the intentions of SA students to engage in business start-up
activity. A three-pronged approach can be recommended. Firstly, more awareness should be
generated regarding the option of starting a business (entrepreneurship) as opposed to
“secure” dependent employment among university students. Secondly, students who have
ideas must be encouraged to develop their ideas further; and thirdly, students who intend
starting a business must know where and how to access information and support on starting
and/or managing a business. Linking to the services that universities can offer to promote
entrepreneurship, such services should be made more visible and available. In this regard
especially entrepreneurship lectures and seminars, business plan competitions, contacts for
general enquiries and regular interactive experiences with founders, who can serve as role
models, could be helpful.

40

4.1.2 Students’ career expectations

Students’ career expectations after graduating can be quite diverse and would be expected to
change over time. However, the job market today has changed radically from that of 50 years
ago. It is expected that an employee in today’s workplace will change jobs every two years;
and those who do not will virtually commit “career suicide” (Trunk, 2007). Initially, students
enter the labour market to gain experience and knowledge of an industry and to form
networks before embarking on longer-term career goals (Barringer & Ireland, 2008).
Respondents were therefore asked to indicate what their career expectations were for the
time directly after their studies (less than < five years) and after a few years of work
experience (more than > five years). The results are presented in Figure 4.2 by firstly
providing an overview of the career expectations of the international and SA sample, and
thereafter more detailed results of career expectations directly after graduation vs. career
expectations five years after graduation.

Figure 4.2: Summary of students’ career expectations

The data for the major career categories is summarised in Figure 4.2: dependent
employment, independent employment, family foundation and uncertain or do not know yet.
Within the first five years of graduation close to two thirds (64.7%) of SA students preferred
dependent employment, while a quarter (25%) preferred independent employment. The
remaining students were uncertain (7.4%), while a very small number (2.7%) indicated that
46.5
30.4
74.8
64.7
42.2
61.3
15.7
25.0
3.4
2.9
2.6
2.7
7.8
5.3
6.9
7.4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
International >5 yrs
South Africa > 5yrs
International