Entrepreneurship education and the potential of technical graduates to venture into business start-ups in Tanzania

Abstract

Despite concerted efforts to integrate entrepreneurship education into the education system to address graduates’ unemployment challenges through business start-ups, its effectiveness in facilitating technical graduates’ acquisition of entrepreneurial competencies critical to venture into business start-ups remains questionable. Grounded on Human Capital Theory (HCT), Theory of Planned Behaviour (TPB), and Institutional Theory (IT) as theoretical frameworks, this study empirically examines the effectiveness of entrepreneurship education in facilitating technical graduates’ acquisition of entrepreneurial competencies and their potential to venture into business start-ups. Specifically, the thesis (i) examines factors influencing entrepreneurial competencies acquisition among graduates, (ii) ascertains the influence of entrepreneurial competencies on business start-up intentions as mediated by TPB antecedents, (iii) measures how entrepreneurship education moderates the effect of TPB antecedents on business start-up intentions, and (iv) examines the influence of university support on graduates’ business start-up intentions as mediated by institutional environment. Underpinned by the positivism paradigm and quantitative research strategy, this thesis employs a cross-sectional research design and collects data using a self-administered survey questionnaire from 391 technical graduates who graduated between 2012 and 2017 and who lived in Dar es Salaam during data collection. The collected data are analyzed using descriptive statistics, Partial Least Squares Structural Equation Modelling (PLS-SEM), and Ordered Logistic Regression Model (OLRM). The findings show that entrepreneurship education significantly facilitates entrepreneurial competencies acquisition (p < 0.001). Specifically, technical graduates who studied at least two entrepreneurship courses were more than 10 times more likely to acquire requisite entrepreneurial competencies than those who did not study. Informal entrepreneurship exposure through life-cycle experience in age (p < 0.001), previous employment experience (p < 0.01), and parental role modelling through self employment (p < 0.05) and education (p < 0.05) positively and significantly facilitate the acquisition of entrepreneurial competencies among technical graduates. Moreover, entrepreneurial competencies had a direct significant effect not only on the attitudes towards business start-ups (p < 0.001) and perceived behavioural control (p < 0.05) but also on technical graduates’ intentions to venture into business start xix ups (p < 0.001). However, attitudes towards business start-ups (p < 0.05) and perceived behavioural control (p < 0.001) strongly mediated the effect of entrepreneurial competencies on technical graduates’ intentions to venture into business start-ups. Perceived behavioural control (52.1%) was the strongest predictor of technical graduates’ business start-up intentions followed by attitudes towards business start-ups (28.9%) and subjective norms (11.5%). Entrepreneurship education significantly moderates the effect of attitudes towards business start-ups (p < 0.001) and perceived behavioural control (p < 0.001) on graduates’ business start-up intentions, but not subjective norms (p > 0.05). The findings further highlight that only 30.2% of technical graduates’ business start-up intentions transitioned to actual business start-ups and that limited capital, perceived high taxes, unfriendly regulatory frameworks, and little awareness of business support services are the main obstacles hindering their potential. Lastly, university support through concept development support (p < 0.001) and institutional support (p < 0.001) had a direct effect on graduates’ business start-up intentions. However, institutional support partially mediates the effects of university support on business start-up intentions through concept development support (p < 0.001), but fully mediates education provision support (p < 0.001) and business development support (p < 0.05). Based on the findings, the thesis concludes as follows: First, entrepreneurship education is an effective intervention strategy in facilitating entrepreneurial competencies acquisition and technical graduates’ intentions to pursue business start-ups. Second, attitudes toward start-ups and perceived behavioural control strongly mediate the effect of entrepreneurial competencies on technical graduates’ business start-up intentions. Third, besides the direct effect of attitudes, subjective norms, and perceived behavioural control on business start-up intentions, entrepreneurship education strongly moderates their effect on graduates’ business start-up intentions. Fourth, university and institutional support play critical roles in fostering graduates’ potential to venture into business start-ups. The thesis presents three implications. First, the Ministry of Education, Science, and Technology should issue special directives to all educational institutions to make at least two entrepreneurship courses compulsory for all students from primary schools to universities. Second, technical universities should spearhead the establishment of business incubation centers and innovation spaces for graduates to innovate and test the feasibility of business ideas before further investment. Third, Local Government Authorities should strive to improve business start-up ecosystems to motivate university graduates and the general public to pursue business start-ups to minimize unemployment challenges.