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Characteristics and Motivational Factors of Opportunity Driven Youth Entrepreneurs in Nairobi County

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Characteristics and Motivational Factors of Opportunity Driven Youth Entrepreneurs in Nairobi County SU+ @ Strathmore University Library ElectronicThesesandDissertations 2020 Characteristics and motivational factors of opportunity driven youth entrepreneurs in Nairobi County. Ngugi, Caroline Njango Strathmore Business School Strathmore University Recommended Citation Ngugi, C. N. (2020). Characteristics and motivational factors of opportunity driven youth entrepreneurs in Nairobi County [Thesis, Strathmore University]. http://hdl.handle.net/11071/12050 Follow this and additional works at: http://hdl.handle.net/11071/12050 This work is availed for free and open access by Strathmore University Library. It has been accepted for digital distribution by an authorized administrator of SU+ @Strathmore University. For more information, please contact [email protected] CHARACTERISTICS AND MOTIVATIONAL FACTORS OF OPPORTUNITY-DRIVEN YOUTH ENTREPRENEURS IN NAIROBI COUNTY Caroline Njango Ngugi Submitted in partial fulfilment of the requirements for the degree of Master of Public Policy and Management at Strathmore University Strathmore Business School Strathmore University Nairobi, Kenya November 2020 This thesis is available for Library use on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement. DECLARATION I declare that this work has not been previously submitted and approved for the award of a degree by this or any other university. To the best of my knowledge and belief, the dissertation contains no material previously published or written by another person except where due reference is made in the dissertation itself. © No part of this dissertation may be reproduced without the permission of the author and Strathmore University. Name of candidate: Caroline Njango Ngugi Signature: Date: Approval The dissertation of Caroline Njango Ngugi was reviewed and approved by the following: Name of Supervisor: Prof. Ruth Kiraka School: Strathmore University Business School Signature: Date: ii ABSTRACT Youth entrepreneurship has been recognized as being an essential factor in growing a country’s economy and thus young graduates are encouraged to consider it as a career choice. However, in Kenya entrepreneurship is viewed negatively as a field for non-college graduates and school dropouts who have limited chances of obtaining traditional salaried work. This study examined the characteristics and motivational factors of opportunity-driven youth entrepreneurs in Kenya. The study objectives were to: establish the characteristics of opportunity-driven youth entrepreneurs and enterprises; identify the motivational factors of opportunity-driven youth entrepreneurs; establish the link between incentives and opportunity-driven entrepreneurship and identify social and cultural factors that are necessary to encourage opportunity-driven entrepreneurs. Purposive sampling and snowballing were used to identify the entrepreneurs who met the sampling criteria. A structured researcher-administered questionnaire was used to collect primary data from a sample population of 193 opportunity-driven youth entrepreneurs in Nairobi County. Descriptive statistics, Pearson’s Correlation Coefficient and Cross Tabulation matrix were used to analyse the data. The study findings revealed: first, that opportunity-driven entrepreneurship was more common among male entrepreneurs, who had specialised in Information Technology (IT) related courses and were operating in the IT sector. Opportunity- driven entrepreneurs were between the ages of 21 and 30 years, had an entrepreneurial family background and operated businesses that were in different lines of business from those that were run by their family members. Second, of the six motivational factors in the study, “I have the opportunity to do exciting work”, “I wanted the freedom to be my own boss” and “I saw a business opportunity” were of relative importance in motivating the entrepreneurs to start their businesses. Third, there was no correlation between government and private sector incentives and opportunity- driven entrepreneurship. Finally, family and society perception of entrepreneurs as successful and innovative individuals was likely to encourage more youth entrepreneurship. Access to education and participation in co-curricular activities in school were also found to be determinants of opportunity-driven entrepreneurship. The study makes the following recommendations: first, to encourage more female opportunity-driven entrepreneurs, the government and private sector could design affordable financial products that target young women who do not have access to collateral to secure funding. Universities and TVET institutions could develop a mentorship program and engage female opportunity-driven entrepreneurs operating in the IT sector to help budding female entrepreneurs to succeed in the sector. Second, tertiary institutions should consider including opportunity-driven entrepreneurship in their range of opportunities at career exhibitions and career guidance platforms, to provide practical options for graduates who are motivated by the need for independence, the freedom to do exciting work and the desire to pursue a business opportunity. Third, the government and private sector should consider refocusing resources to target opportunity-driven entrepreneurs, tracking, and evaluating incentives to establish the effectiveness of incentive packages. Finally, youth interested in entrepreneurship should leverage available educational opportunities to acquire the entrepreneurial skills needed to identify business opportunities and convert business ideas into viable businesses. The respondents were specifically required to be graduates from university and TVET institutions in Nairobi County and were selected through snowballing. This presented difficulty in getting a large sample size, as it was not easy to find the respondents. Consequently, the results of this study should be generalised with caution. iii TABLE OF CONTENTS ABSTRACT ................................................................................................................................... iii DEFINITION OF TERMS ............................................................................................................ xi ACKNOWLEDGEMENTS .......................................................................................................... xii CHAPTER 1: INTRODUCTION TO THE STUDY ...................................................................... 1 1.1 Introduction ............................................................................................................................... 1 1.2 Youth entrepreneurship in Kenya ............................................................................................. 2 1.3 Problem statement ..................................................................................................................... 4 1.4 Research objectives ................................................................................................................... 6 1.4.1 Specific research objectives ................................................................................................... 6 1.5 Research questions .................................................................................................................... 6 1.6 Scope of the study ..................................................................................................................... 6 1.7 Significance of the study ........................................................................................................... 7 1.7.1 Policymakers .......................................................................................................................... 7 1.7.2 Educational institutions .......................................................................................................... 7 1.7.3 Youth, parents, and the society in general ............................................................................. 7 CHAPTER 2: LITERATURE REVIEW ........................................................................................ 8 2.1 Introduction ............................................................................................................................... 8 2.2 Theoretical framework .............................................................................................................. 8 2.2.1 The Theory of Planned Behaviour ......................................................................................... 8 2.2.2 The Theory of Human Values................................................................................................ 9 2.3 Empirical literature ................................................................................................................. 10 2.3.1 Characteristics of youth entrepreneurs and enterprises ....................................................... 10 2.3.2 Factors motivating youth entrepreneurs............................................................................... 12 2.3.3 The link between incentives and opportunity-driven entrepreneurship ............................... 16 2.3.4 Social and cultural factors, and opportunity-driven youth entrepreneurship ....................... 20 2.4 Research gap ........................................................................................................................... 23 2.5 Conceptual framework ...........................................................................................................
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