449 Journal of Economics and Behavioral Studies Vol. 5, No. 7, pp. 449-459, July 2013 (ISSN: 2220-6140) Barriers to Student Entrepreneurship in South Africa Richard Shambare Tshwane University of Technology, South Africa shambarar@tut.ac.za Abstract: As rising unemployment levels continually erode job opportunities in South Africa, it is sensible to assume that entrepreneurship would be considered as the next-best career option; however, university graduates show very little interest in becoming entrepreneurs. Having observed this disinterest, South African economic policies have put in place initiatives encouraging youth entrepreneurship; however, these have failed to significantly affect the willingness to engage in entrepreneurial activities. It is against this background that this paper investigates barriers to entrepreneurship as experienced by students. A survey of 235 university students was conducted. Their views regarding entrepreneurship were collected by means of self-completion questionnaires and studied using cluster analysis. It was concluded that a taxonomy of two distinct categories of student exist – sceptics and optimists – based on respondentsǯ predispositions to entrepreneurship barriers. The author identifies the themes that underlie the formation of the taxonomy, namely, family and social influence, exposure to entrepreneurial activity, entrepreneurial support, and education. The paper concludes with a discussion of practical solutions and strategies to mitigate the problem of a lack of student entrepreneurship. Keywords: Education, entrepreneurship, entrepreneurship education, universities, South Africa 1. Introduction The issue of youth unemployment is a growing global problem. In the recent past, protests by unemployed youths have dominated news headlines in the United Kingdom (Apps, 2011), Spain (Kane, 2013), the Eurozone (Robertson, 2013), and South Africa (Chauke, 2011). In response to the unemployment question, policymakers encourage school leavers to embark on self-employment and entrepreneurial ventures (Shane, 2008). Considering the dwindling employment opportunities globally, such a policy position seems to be a reasonable argument and well-justified(Sowetan, 2012). The South African government is among those that consider the escalation of youth entrepreneurship as a development imperative (Republic of South Africa, 2012). Consequently, numerous small-business agencies, such as the National Youth Development Agency (NYDA) and Small Enterprise Development Agency (SEDA), have been established. Through its National Development Plan (NDP), the South African government envisages collaboration of these agencies with institutions of higher learning to transform South Africa into an entrepreneurial society(Republic of South Africa, 2012). This vision includes concerted efforts towards providing support and infrastructure (e.g. loan facilities and incubation services) to budding entrepreneurs (Republic of South Africa, 2012; UNDP, 2007). The Global Entrepreneurship Monitor (2011) acknowledges that South Africa has one of the best entrepreneurial support systems among the emerging economies. Despite this, the disappointing reality is that South African youth entrepreneurship levels lag behind international and regional standards (Global Entrepreneurship Monitor, 2011; Lennox, 2013). A major reason for this appears to be the attitudes of graduates towards entrepreneurship. The Global Entrepreneurship Monitor (2011) statistics reveal a general lack of interest among the youth to engage in new venture start-ups (NVSUs). Given the critical role of youth entrepreneurship in the attainment of development goals and as a means to arrest inflating unemployment levels, this emerging trend of university graduatesǯ lack of interest to engage in entrepreneurial activity is fast becoming a major socio-economic challenge for the country(Lennox, 2013; Republic of South Africa, 2012). Against this background, it was therefore opportune to investigate reasons underlying low levels of entrepreneurial activity by university graduates. Research objectives: Drawing from the extant literature(Ebewo and Shambare, 2012; Makgosa and Ongori, 2012; Solymossy and Hisrich, 1998; van der Walt and van der Walt, 2008; Yaghoubi, 2010), it was observed that university students and graduates experience a multitude of barriers limiting their participation in entrepreneurial activities. For that reason, this study investigates the nature of barriers