Women entrepreneurship in South Africa: Understanding the role of competencies in business success

Abstract

Background and aim: Environmental factors alone cannot determine the success of small, medium and micro-sized enterprises (SMMEs) and female entrepreneurs; there is a need to closely examine the internal factors that also contribute to business success. This is necessary because, despite the considerable government support and support of bodies interested in promoting gender equality in all areas (business included), 20% of female-owned businesses still fail annually. Consequently, even though, according to a report from the Department of Trade and Industry in South Africa, millions of Rands have been allocated to support female-owned SMMEs by way of government funding, training, grants and consultative support services, the failure rates of these female-owned businesses remain high. The main reason for this can be that over-dependence on these incentives often weakens rather than strengthens female entrepreneurs’ ability to manage their businesses and reduces their competitiveness by laying emphasis on external, contextual factors rather than internal, competence variables for success. Researchers in the past have suggested that focusing on the internal factors, especially the ‘people issues’ facing the entrepreneurs (in this case female entrepreneurs), may give the business a better chance of success.

Design/methodology/approach: A ‘mixed-method’ approach, conducted in two parts, was adopted for this study and appropriate tools and techniques were used to collect and analyse the data drawn from a sample of female entrepreneurs in South Africa. The study applies culturally instantiated facets of the debate on gender entrepreneurship as part of a detailed and empirically sophisticated consideration of the status of female entrepreneurship within South Africa. The qualitative aspect utilised semi-structured interviews and focus group discussions. The quantitative aspect utilised survey questionnaires developed from the findings of the qualitative study.

Results: All participants agreed that entrepreneurial competencies are vital for business success. The study also makes a clear distinction between the traits approach and competencies approach in understanding business success. Arguably, the competency variable is viewed and appreciated differently by female entrepreneurs in South Africa. The findings also showed some cultural variations in the application of entrepreneurial competencies among the four dominant racial groups in South Africa.

Conclusion: This study offers a comprehensive analysis of the competency variable in understanding the factors that influence business success in the context of South African female entrepreneurs. It provides a basis for an agenda for focus on training and development of the entrepreneurial competencies of female entrepreneurs in South Africa.