A support framework for the survivalist entrepreneurs- Free State Province case study
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Date
2014-07
Authors
Ranyane, Kgantsho, Adeline
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
South Africa is faced with a challenge when it comes to the creation of jobs and the development of sustainable small businesses. The challenge is aggravated by the declining overall socio-economic profile and economic activities, which result in increasing unemployment rates. In an attempt to escape from these socio-economic conditions and/or to reduce their severity, individuals opt to start informal businesses which can be in the form of survivalist enterprises, that become a buffer, providing families with an alternative source of income.
Survivalist entrepreneurs are forced into business for survival due to an inability to find a job and increasing poverty levels, while operating in the informal sector of the economy. In theory, the South African government does recognise the existence of survivalist entrepreneurs, who are categorised as part of the micro-entrepreneurs amongst the small, medium and micro-enterprises (SMMEs). However, in practice, there is no evidence of the theoretical support being given.
The study was a qualitative and quantitative, exploratory multiple case study. The case study was conducted as a first phase, with 100 participants. The second phase of the study entailed a review of secondary documentation (policies and procedures) provided by finance development institutions (FDIs). The third phase of the study entailed interviews with the FDIs.
The study unpacked obstacles experienced by the survivalist entrepreneurs and further investigated the means of assisting them to become viable in their business activities. A conceptual framework on the existence of the survivalist entrepreneur was formulated using both theoretical and empirical results from the study. Changing global economic conditions were the underlying causes which lead to factors that directly or indirectly lead to the development of survivalist enterprises. These included a shrinking formal economy, increasing poverty rates, which directly increased dependency on the government for support. Government policies have also contributed in pushing people into survivalist entrepreneurship. These factors are referred to as the immediate causes that pushed individuals into survivalist entrepreneurship.
The study indicated the common motivational factors amongst survivalist entrepreneurs to be avoidance of poverty and unemployment. The need for independence and recognition of an
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opportunity were categorised as pull factors. Regulations and laws by the South African government was a common obstacle that inhibited the growth of the survivalist businesses into an opportunity-driven business. Lack of finance and inadequate training were also mentioned as obstacles that inhibited the evolvement of the survivalist businesses which participated in the study. However, lack of recognition and lack of support by the South African government were found to be of greater concern to survivalist entrepreneurs.
The study also highlighted similarities and contrasts between literature and empirical findings in relation to the survivalist entrepreneurs, thus suggesting the evolvement of characteristics with the passing of time.
In conclusion, a support framework to assist the survivalist entrepreneurs to become viable in their business activities by becoming opportunity-driven was created.
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Keywords
Entrepreneur, South Africa, Small business, Job creation -- South Africa, Thesis (PhD (Business Administration)) --University of the Free State, 2014