A system can be described as being in a certain state, containing “stock”, with inflows (new ventures) and outflows (business failures). At any given time, the system is in a certain perceived state. This may often be due to there being a goal for the system to be in such a state, where the difference between the current state and the goal is the discrepancy1. The state of a system is based on the standing stock of importance, in this instance, the high rate of unemployed youth in South Africa. Our research has found that entrepreneurship propensity begins with a sense of purpose and is dependent on several intrinsic factors (personal characteristics and behaviours), such as opportunity identification, self-belief, focus and clarity, and innovation and creativity. These factors do however need to be supported by extrinsic drivers, such as enabling conditions and financial resources, to create an ecosystem that results in attaining the entrepreneurship skills and experience that lead to job creation and the formation of new ventures.
Sense of Purpose – is about entrepreneurs’ knowing their passion and having a vision of what they are trying to achieve. Having a sense of purpose provides a reason to get out of bed and keeps one going. It is an entrepreneur’s North Star and guiding light.
Self-belief – enables entrepreneurs to deal with the fear of failure and to overcome obstacles. Having self-belief allows them to look at things objectively and without emotion. Self-belief equips entrepreneurs with the confidence they need to succeed.
Opportunity Identification – is essential for entrepreneurs to start and grow a business. It is about an entrepreneur’s ability to identify opportunities and to test the viability of the opportunities. A key aspect is market and competitor research to understand the potential market.
Focus and Clarity – relate to an entrepreneur’s ability to focus on what is most important and prioritise goals and objectives. Having focus and clarity helps entrepreneurs know what to do and when to do it to achieve a return on effort at the Implementation phase.
Enabling Conditions – create an environment in which entrepreneurs are likely to succeed. These conditions include the country’s policies, regulations, infrastructure, and support at micro and macro levels, from family, friends, and significant others to mentors, coaches, and professional advisors.
Creativity and Innovation – allow entrepreneurs to think outside the box and put ideas into action. It allows them to work with what they have to get started. Creativity and innovation are critical to being able to compete in the market.
Financial Resources – are important for entrepreneurs to get started and to keep going. This includes start-up capital, working capital and access to finance in the form of loans and grants, but also financial self-efficacy and the financial literacy to manage money.
Entrepreneurship Skills and Experience – are required in all functional areas of their business. It is important for an entrepreneur to adopt a continuous learning approach, constantly developing their own skills and identifying skills gaps in their businesses to improve the skills of their employees.
1 Meadows (1999)