Fluid Entrepreneurial Motivations in Tanzania

Abstract

ABSTRACT Entrepreneurial motivations, in terms of necessity and opportunity, are key for small businesses and are studied extensively from a static perspective, especially in economically developed contexts. However, previous research has largely overlooked the dynamics of entrepreneurial motivations. We explore the fluidity of entrepreneurial motivations – together with socio-demographics and needs fulfillment – in Tanzania’s emerging economy. This context is ideal for studying fluid entrepreneurial motivations because of economic contradictions, rapid societal developments and the presence of large numbers of small business owners. Based on a literature review that leads to hypotheses and a focus group on the spot, a survey was developed and completed by 168 small business owners in Morogoro, Tanzania. Descriptive, correlation, latent-class, factor and regression analyses were carried out on the quantitative data. The findings show that small business owners are clustered by their entrepreneurial motivations and that these motivations change from necessity to opportunity. A higher educational level leads to more opportunity-focused entrepreneurial motivations at the start of the business. In later stages, an increase in the fulfillment of personal needs shifts entrepreneurial motivations toward opportunity motivation. In addition to existing literature, the findings provide a detailed, segmented profile of small business owners’ entrepreneurial motivations over time.