Effects of selected fourth industrial revolution skills on entrepreneurial readiness behaviour: the mediation of the entrepreneurial process

Abstract

The advent of the Fourth Industrial Revolution (4IR) has challenged higher educational institutions to nurture skills that are not only relevant to the world of work, but also create alternative pathways to gainful employment. Even though the pursuit of nascent entrepreneurship by university students constitutes one of the important pathways to income generation in emerging contexts such as South Africa, it remains unclear which combinations of 4IR skills are ideal and relevant to the generation of entrepreneurial readiness behaviours such as new venture creation, innovative financing and venture growth. A recent body of entrepreneurship research identified soft skills, technical skills, and entrepreneurial skills as germane 4IR skills to impact entrepreneurial readiness behaviours, particularly new venture creation, innovative financing and venture growth. In view of the growing literature that acknowledges entrepreneurial process, especially opportunity identification, opportunity validation, opportunity exploitation, and resource mobilisation as fundamental to the materialisation of entrepreneurial readiness behaviours on the one hand, the ability of 4IR skills to drive the entrepreneurial process on the other, the study sought to establish the extent to which the entrepreneurial process mediates the relationship between 4IR skills and entrepreneurial readiness behaviours. Therefore, the scientific gap this study sought to address is the extent to which the entrepreneurial process mediates the relationship between selected 4IR skills and entrepreneurial readiness behaviours. To address direct predictive and indirect relationships among the aforesaid variables and to address the objectives and hypotheses of this study, a descriptive, exploratory and explanatory cross-sectional survey was conducted among students enrolled at two South African universities. Drawing on a sample of 300 students and a self-administered questionnaire whose items were developed from mainstream entrepreneurship literature, students’ perceptions and perspectives on 4IR skills, entrepreneurial readiness behaviour and entrepreneurial process were examined, including their associative and predictive relationships. The direct relationships between all dimensions of entrepreneurial readiness behaviours and those of the entrepreneurial process were deemed positive and statistically significant. The mediating role of the dimensions of the entrepreneurial process on the relationship between dimensions of 4IR skills and the dimensions of entrepreneurial readiness behaviour was also investigated. Opportunity identification partially mediated the relationship between entrepreneurial skills and innovative financing, while resource mobilisation partially mediated the relationship between entrepreneurial skills and two dimensions of entrepreneurial readiness behaviours, namely innovative financing and venture growth. Resource mobilisation and opportunity identification fully mediated the relationship between entrepreneurial skills and venture creation. No mediation was confirmed between the remaining variables. The major theoretical contribution of this study to the body of entrepreneurial literature is that it demonstrates how the Human Capital Theory provides a useful lens for understanding different ways through which several 4IR skills interact with the entrepreneurial process in shaping specific forms of entrepreneurial readiness behaviours. The study broadens understanding on the capacity of human capital competences such as entrepreneurial and technical skills to complement the Theory of Planned Behaviour in explaining how the entrepreneurial process levers the development of specific entrepreneurial readiness behaviours. Drawing on this theoretical lens, the study demonstrated how, of all dimensions of the entrepreneurial process, opportunity exploitation does not exert any form of mediation between the dimensions of selected 4IR skills and the dimensions of entrepreneurial readiness behaviours. This research also contributes to policy by demonstrating how alternative funding strategies such as innovative financing should be developed, based on an audit of students’ 4IR skills. Policy strategies that support aspects of the entrepreneurial process are investigated to identify opportunities that could be exploited to create new ventures. Policies to stimulate resource mobilisation are explored to lever the extent to which they mediate the relationship between selected 4IR skills and entrepreneurial readiness behaviour. The study contributes to entrepreneurship practice by devising mechanisms of funding tailored to the entrepreneurial skills and entrepreneurial readiness behaviour of students. The study also discusses practical implications of compulsory entrepreneurial education for the development of entrepreneurship among students enrolled at different higher education institutions.