The influence of higher education attainment in shaping the entrepreneurial risk-taking propensity of the black working class

Abstract

Entrepreneurship plays a critical role in economic growth and is a driver for empowerment and social mobility. However, the black population in South Africa has the lowest entrepreneurship participation rate and high number of unemployed graduates. This study investigates the dynamic impact of higher education attainment in shaping the entrepreneurial risk-taking propensity of the educated black working class in South Africa, a population for whom employment and entrepreneurial outcomes are heavily influenced by structural factors, race and socio-economic factors. The study adopted a qualitative research design using narrative inquiry and grounded theory and utilised in-depth interviews with black employed individuals and black entrepreneurs who were previously employed but quit to pursue entrepreneurship full time. The study was based in the Gauteng and KwaZulu Natal (KZN) provinces. The study framed by Prospect Theory (PT), analysed entrepreneurial decision-making relative to the reference point of formal full-time employment. The findings revealed numerous barriers to entrepreneurship for the black working class and that education has a dual role as an inhibitor and enabler of entrepreneurship. The study revealed that the impact is also dependent on the type of education such as technical education or business education. Business education enhances entrepreneurship due to financial literacy, skilled-based module and client management modules and technical/profession education increases risk-aversion due to analysis paralysis effect. The results highlight the need for practical entrepreneurship education and policy intervention that address the barriers to entrepreneurship for the black working class.