SMEs and Sustainable Entrepreneurship in South Africa: Impact Analysis of Contextual Factors in the Services Sector

K. Ogujiuba (), R. Nico (), M. Naseer (), C. Ogujiuba () and B. Estelle ()
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K. Ogujiuba: University of Mpumalanga
R. Nico: University of the Western Cape
M. Naseer: University of the Western Cape
C. Ogujiuba: University of the Western Cape
B. Estelle: University of Mpumalanga

EuroEconomica, 2020, issue 3(39), 7-28

Abstract: Sustainable entrepreneurship (SE) is becoming increasingly important for every society. However, the dynamics of sustainable entrepreneurship is not much known or not in existence amongst SMEs in South Africa. Previous studies have largely ignored the dynamics of contextual factors, particularly, as it affects SMEs sustainability. This article x-rays the influence of these factors on sustainable entrepreneurship in the services sector for SMEs in South Africa. Additionally, it identifies the correlation between the contextual factors and sustainable entrepreneurship. The trustworthiness test of the study instrument was done, using test re-test reliability method, which yielded an R-value of 0.70 and internal consistency of 0.875 as measured by the Cronbach Alpha index. The Binary Logistic technique and Spearman Rank Correlation were used in the analysis. Results indicate that the characteristics of an SME, Government Support, Management Skill, Good employee-employer relationship, and Start-up Capital are correlated to sustainable entrepreneurship. However, the logistic regression only showed three of the factors as having a significant impact on the increase or otherwise of sustainable entrepreneurship amongst the SMEs. Our findings suggest that entrepreneurs and business partners must maintain a posture that continuously pursues novel ideas as per the features of an SME; maintain an opportunity-seeking perspective with employees; and control risks associated with high-risk ventures that bring financial achievements. It has therefore, become imperative for an overhaul of interventions that will enhance the SME sector as an important vehicle for economic growth, and equity. The South African Government and other developing countries needs to commit themselves to creating an environment that bolsters sustainability for entrepreneurship to thrive.

Keywords: Business Success; Entrepreneurship; South Africa (search for similar items in EconPapers)
Date: 2020
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