Motivating entrepreneurial behaviour
Although South Africa has one of the highest levels of unemployment in the world, it also has one of the lowest levels of entrepreneurial behaviour. In fact, according to the 2006 Global Entrepreneurship Monitor (GEM) Report, South Africa has a very low level of entrepreneurial behaviour even when compared to other developing countries.
Research undertaken by Brendan le Grange for his GIBS MBA thesis shows that programmes aimed at encouraging entrepreneurship rarely consider motivation as a vital ingredient for the successful creation of new ventures. In South Africa this is important because long-term unemployment can reduce a would-be entrepreneur’s motivation to start a new venture. While short, unexpected periods of unemployment can actually encourage entrepreneurship, long periods do not.
Le Grange’s research examined the value that unemployed individuals place on selfemployment, their perception of the level of risk involved in entrepreneurship and the degree to which, if at all, they preferred structured environments to unstructured ones. Although the respondents were exclusively looking for formal employment, it was found that a significant proportion of them would actually prefer to be self-employed.
This disconnect between the desires of this group and their actions would have been explained had the group felt incompetent or unqualified to pursue entrepreneurship. However, while it is true that self-employment was viewed as difficult and risky, 80% of respondents were confident in their ability to pursue it as a career path. The disconnect would also have been explained had the group lacked access to the capital they needed to start a new venture. Again however, this did not appear to be a major factor since few members of the group were pursuing employment to build capital reserves or had ever actively sought funding. Where the ability and opportunity to act exist but no action takes place, a lack of motivation is usually the cause.
Excessive levels of unemployment are not only a symptom of slow economic growth, but also a potential cause of it. When a population is not gainfully employed it loses competitiveness, on-the-job learning and skills development and work experience. In an individual, consistently unsuccessful job searches can lead to lower expectations for the future and a lower sense of self-efficacy, which in turn destroy the motivation to create new ventures. This is true even when the goal of self-employment is seen as an attractive option.
However, le Grange’s research suggests that motivation can be re-built or that where internal motivation is lacking it can be replaced by external motivation. Positive feedback and a series of small successes can be used to reverse the psychological damage caused by long-term unemployment. There are two theories which cover an individual’s motivation to pursue a goal, namely goalsetting theory and self-determination theory. Goal-setting theory posits that all consciously-motivated behaviour is goal-oriented and that the achievement of these goals is contingent upon feedback, commitment, abil- ity and task complexity. Self-determination theory states that motivation can be initiated internally or externally, however internally regulated motivation leads to a deeper commitment and the desire to go beyond the confines of the tasks specified in the goal.
Therefore, even where a goal is set by an external agent it can be as motivating as a goal set by the individual herself – provided it is communicated correctly, comes from a legitimate source and is internalised. All of these factors combine to provide significant reasons for developing structured programmes that motivate people to pursue entrepreneurship.
This resonates with the research where the major factor holding back the wouldbe entrepreneurs was, in fact, found to be a strong preference for structure in the work place. The majority of would-be entrepreneurs preferred structured work environments, preferred following instructions rather than giving them and preferred tackling multiple small tasks rather than single large ones.
Programmes aimed at developing entrepreneurship therefore need to provide a structured format that will lead new entrepreneurs through the early stages of exploration, start-up and growth. The psychological benefits of positive feedback and the achievement of multiple, small goals would overcome the psychological damage caused by long periods of unemployment.
Should these insights be applied by institutions such as the Department of Labour, the new approach could go a long way in promoting entrepreneurial motivation and subsequently entrepreneurial action, thereby lowering the overwhelming number of unemployed in South Africa.
New approach could lower unemployment.