The determinants of self-employment of black entrepreneurs in Ladysmith, KwaZulu-Natal

Abstract

Orientation: The study seeks to provide an in-depth understanding of the determinants of self-employment within the context of black entrepreneurs. Research purpose: Given the unprecedented increase in self-employment, because of reduction in formal job opportunities in South Africa, the primary objective of this study was to probe the determinants of self-employment relative to being a wage earner among black people in Ladysmith. Motivation for the study: The study investigated the determinants of self-employment through the use of the logistic modelling technique as its primary focus. Research design, approach and method: The study employed both probability and non-probability sampling techniques. The convenience and snowball sampling methods were used to locate all targeted entrepreneurs while the systematic random sampling method was used to locate the wage earners. A total of 450 respondents were interviewed through face-to-face administered questionnaires. The data collected was statistically analysed, using SPSS to acquire the descriptive statistics and EViews software to obtain logistic regression results and the related diagnostic tests (Hosmer–Lemeshow test and Wald statistics). Main findings: All the variables, except for household income per capita, were statistically significant, indicating that they were plausible predictors of self-employment. Practical/managerial implications: Financial life skills and entrepreneurship training ought to be embedded in all learning programmes at the primary, secondary and tertiary levels. In particular, all young persons through whatever skills development programme – including those offered at in-service and/or work-related training – they are given access to, must be taught to develop an entrepreneurial mind-set. Contribution/value-add: A combination of skills development and guidance-based access to finance to targeted groups involving women, the young adults at schools and tertiary institutions and entrepreneurial adults are likely to reap significant outcomes.

Keywords

• self-employment
• wage earner
• logistic
• black entrepreneurs
• KwaZulu-Natal