The transition from formal employment to entrepreneurship, in the context of a sudden change

Abstract

The study presents itself during a period where the South African economy is shrinking, coupled with high unemployment rates, which are expected to further increase due to the economic downgrade to junk status, and is exacerbated by the coronavirus pandemic. Corporate organisations therefore find themselves challenged and unable to retain their human capital resources, and therefore current employees are at risk of job loss. It is understood that entrepreneurship has a beneficial effect on unemployment, and further enables a positive economic growth. The purpose of the study is therefore to understand how individuals transition from formal employment into entrepreneurship, after experiencing a sudden change that is brought on by a shrinking economy. The theory that is explored in this study is learned entrepreneurship. The research methodology followed was a qualitative research method, using semistructured interviews, on participants who have transitioned from formal employment to entrepreneurship. The findings of the study indicated the possible skills and capabilities required for such a transition and how challenges encountered can be overcome. The study concluded with a proposed conceptual model on transitioning from formal employment to entrepreneurship after going through a sudden change in a shrinking economy.