Academic journal article Management Dynamics

Self-Employment and the Required Skills

Academic journal article Management Dynamics

Self-Employment and the Required Skills

Article excerpt

ABSTRACT

Unemployment in South Africa increased by around two percentage points between 1999 and 2004 and for this reason job creation is critical in South Africa (Statistics South Africa). Against this background self-employment is regarded as one of the driving forces of economic growth in transitional countries. South Africa urgently needs to create jobs, and cannot afford to have a high failure rate among the self-employed, as this category of worker often creates job opportunities for others as well. Many researchers are of the opinion that growth-oriented firms are truly entrepreneurial, and that they differ in important respects from small firms in general.

Many of the characteristics normally associated with entrepreneurs (inter alia, internal locus of control, risk taking, creativity, self-confidence, a need for independence, commitment, and high energy levels) have also been found to be prevalent among successful managers. However, entrepreneurs possess higher levels of growth-oriented traits than do managers in general. Growth must be carefully planned for, and it is a decision made by some to pursue vigorously, by others to pursue slowly, and by yet others to avoid. Firms directed by entrepreneurs are generally committed to growth as a fundamental strategic aim. The focus in this study is on skills that can contribute to growth, job creation, and entrepreneurship.

In a comparison of self-employed graduates with a growth orientation to those who do not intend to grow their firms, it was observed that those who had planned growth had also acquired certain skills to a greater extent than those that did not plan to grow their firms. Important skills to have in self-employment were identified as technical skills, perseverance, communication skills, managerial skills, leadership, innovation, pro-activity, financial skills, and information-seeking skills. All the listed skills were more prevalent among those who had the intention to grow their firms than those who did not have this intention, with the exception of technical skills.

INTRODUCTION

Job creation is critical in most economies of the world, but particularly so in South Africa where unemployment is increasing. Unemployment estimated at 25.8% at the time of the October Household Survey in 1999 was as high as 27.8% in 2004 (Statistics South Africa). Many see self-employment as the driving force of economic growth in developing countries, as it has brought about significant growth in developed countries (Jennings, 1994: 298). In the United States for instance, about one in seven of the working population is self-employed (Timmons, 1994: 3). South African employment growth is typical of a developing country, in that growth in self-employment has been 15% per annum since 1991 (CSS, 1991 and Statistics South Africa, 1996). Although new firms are the primary sources of new employment opportunities worldwide (Schutte, Bennett, and Boshoff, cited in Boshoff, Theron and Schutte, 1993:1), failure is the rule in self-employment, not the exception (Jennings, 1994: 303). For instance, some 400 000 small firms in the United States fail each year, and by their tenth year of existence, almost 90% of small firms have failed. The question has become not one of quantity of new firms, but of quality of start-ups. There is strong competition in most industries, and satisfying the needs of clients demands a sophisticated entrepreneur (Fazey, 1997: 156). As entrepreneurs of the future increasingly move into higher-value service firms, they will also have to attain higher levels of education and skills to be able to interact with foreign suppliers and customers if they are to succeed. Entrepreneurs should thus be more globally focused, better educated, and more focused on service delivery (Kurlantzick, 2004) if they are to succeed. South Africa urgently needs to create jobs and cannot afford to have a high failure rate among the self-employed, as one of the "jobs" of the self-employed is to create job opportunities for others. …

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