The effect of Entrepreneurial Orientation and Business Performance of Youth Entrepreneurs within the Tshwane Municipality in South Africa

Abstract

The youth unemployment rate has increased at the fastest pace globally in recent times. It is estimated that there are about 88 million unemployed youth existing in the world. In the first quarter of 2023, 60.7 % of South African youth were unemployed. The youth unemployment rate in the Tshwane Metropolitan Municipality (TMM) is 32.6 %. To reduce this trend, most young people look for alternative means of starting their businesses. Entrepreneurial orientation (EO) is viewed as one of such tools for the youth to start their businesses. EO can also be seen as an effective strategy to improve the business performance of the youth. The purpose of the study is to assess the role of entrepreneurial orientation as a tool to improve the business performance of the youth in TMM. The study analysed data using a quantitative research methodology. Both close-ended and Likert-scale questions were used in developing the questionnaire. An online survey was used to collect the data. A total of 160 youth entrepreneurs on the National Youth Development Agency (NYDA) database who were residing in the TMM constitute the sample population. A total of 160 questionnaires were therefore sent out to the youth entrepreneurs in TMM. Out of the total, 153 responses were obtained. Out of these responses, 96 questionnaires were completed in full, while 57 questionnaires were partially completed and 7 questionnaires were uncompleted. This gave the completed questionnaire’s response rate of 60 %. The data was collected and analysed using descriptive and inferential statistics. The findings of the study showed that there was a weak correlation between EO and business performance with a correlation coefficient of 0.047. The results indicate a generally positive association of EO with business performance, which was measured in terms of innovativeness, risk-taking, pro-activeness, competitive and aggressiveness. The participants were of the view that the youth businesses in TMM are very innovative, take risks, are proactive, and are competitively aggressive. The study has unearthed the connection between entrepreneurial orientation and business performance. The study recommends that entrepreneurial orientation must be encouraged among youth entrepreneurs in TMM which may aid their pro-activeness and improve business performances. The improve business performances of the youth entrepreneurs of Tshwane Metropolitan Municipality would lead to their increase business success.