Informal entrepreneurship in the tourism sector : how entrepreneurs’ motives and capital contribute to business success

Abstract

Informal entrepreneurship is woven into the economic fabric of South Africa’s tourism sector. Some people are ‘pushed’ into the sector by a lack of opportunities in the formal economy; others are ‘pulled’ into the informal sector by the prospect of better livelihoods, independence and personal fulfilment. Starting any business requires different types of capital (financial, social, human and psychological). While many studies have explored these aspects in relation to entrepreneurs/firms in the formal sector, how they impact the informal sector is less well understood. In this study, we examined the relationships between informal entrepreneurs’ motives, the different forms of capital available to them, and business success. Data were collected through structured questionnaires in three major South African cities. Multivariate statistics and quantile regression analysis revealed synergies between capital types and entrepreneurial motives, highlighting that success reflects not only the availability of capital but also the effective strategic utilisation of resources.