International Journal of Construction Engineering and Management

p-ISSN: 2326-1080    e-ISSN: 2326-1102

2020;  9(2): 45-62

doi:10.5923/j.ijcem.20200902.02

 

Barriers and Motives for Entrepreneurship in Building Construction Industry in Dar-es-Salaam, Tanzania

Brown C. Emmanuel, Dennis N. G. A. K. Tesha, Suma S. Mwaitenda

School of Architecture Construction Economics and Management (SACEM), Department of Building Economics, ARDHI University (ARU), Dar-es-Salaam, Tanzania

Correspondence to: Dennis N. G. A. K. Tesha, School of Architecture Construction Economics and Management (SACEM), Department of Building Economics, ARDHI University (ARU), Dar-es-Salaam, Tanzania.

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Copyright © 2020 The Author(s). Published by Scientific & Academic Publishing.

This work is licensed under the Creative Commons Attribution International License (CC BY).
http://creativecommons.org/licenses/by/4.0/

Abstract

This study aimed at exploring the barriers and motives for entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania. Specifically, the study examined the barriers and identified the motives for adoption of entrepreneurship in the building construction industry. The study also proposed solutions to the barriers of entrepreneurship and their adoption in the building construction industry in Dar-es-Salaam, Tanzania. This descriptive research used both qualitative and quantitative approaches, with its research design based on survey as well as probability and non-probability sampling techniques. The sample of the study constituted 91 graduate and registered quantity surveyors and architects in the building construction industry within Dar-es-Salaam who were selected as a unit of analysis comprising people with different years of experience. Basically, the responses were obtained through 50 questionnaires with open and close-ended questions. A total of 40 questionnaires were filled appropriately and returned. Quantitative data were coded, classified, and analyzed using SPSS in order to get accurate computations that were ranked by using mean score value. Barriers with mean score above 4.00 encountered by graduate quantity surveyors and architects included lack of startup capital and limited access to credit; lack of mentorship and negative attitudes towards graduate entrepreneurship; lack of trusted business partners/skilled workers or employees; poor marketing and management skills; inadequate information and experience in the industry; institutional complexity (bureaucracy); poor implementation of government policies by officials, and insufficient government supports; and limited financial as well as business management skills. Those encountered by registered quantity surveyors and architects included government policies; tight (fixed) profit margins in markets; high initial cost of work, and risk of failure (the loss of the invested capital); bureaucracy, and corruption; complex nature of construction works; and limited infrastructures. Motives with the mean score above 4.00 included financial freedom, success and resources; strategic business planning and communication skills; strategic decision making skills and leadership skills; risk taking ability; qualification/expertise, and desire for independence and self-governance; inspiration from successful people in the industry and building a legacy; professional development/improving skills and awareness on where to look for support; loss of job or dissatisfaction with previous or current job and the will to try/experiment with business alongside learning from it; competition, ability of survival of the firms owner/person and the ability to start and run businesses; technical skills; and efficient managerial skills. The recommended solutions with mean score above 4.00 barriers of entrepreneurship in building construction industry in Dar-es-Salaam included proper training in work places and education institutions; reducing time and costs to process permits; removal of bureaucracy and eradication of corruption; easy access to loans; seeking help from successful people in the industry; strategic mentorship opportunities; formulation of favorable policies which support self-employment; investment incentives; and improvement of infrastructure.

Keywords: Entrepreneurship, Building Construction, Quantity Surveyors, Architects, Dar-es-Salaam Tanzania

Cite this paper: Brown C. Emmanuel, Dennis N. G. A. K. Tesha, Suma S. Mwaitenda, Barriers and Motives for Entrepreneurship in Building Construction Industry in Dar-es-Salaam, Tanzania, International Journal of Construction Engineering and Management , Vol. 9 No. 2, 2020, pp. 45-62. doi: 10.5923/j.ijcem.20200902.02.

1. Introduction

Entrepreneurship is not an individual’s ability to turn and develop ideas into action. It includes skills such as creativity, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives, [21]. Basically, entrepreneurship plays a vital role by increasing per capita income as well as being a key catalyst and driving force of the country’s efficient economic growth, prosperity and sustainability, [2,9,26,28,32,37,42,43,44,75,83], due to availability of a standard positive relationship between entrepreneurship and economic growth, [29]; alongside well-structured and effectively implemented policies. For example, an effective government policy on decreasing unemployment stimulates the number of new businesses opportunities especially for the youths in construction industry, when implemented alongside entrepreneurship, which is considered a vital key that opens the door of employment and employability in this 21st century, [52,74]. Moreover, entrepreneurship is commonly measured as a significant determinant of poverty reduction, economic growth, technological progress as well as development and job creation, [5,59,72,82].
In the colonial era, Africans were restricted to participate in businesses, and this resulted in insufficient contribution of entrepreneurial skills from Africans. However, after independence, there were positive contributions of entrepreneurship skills through establishment of banking, import-export trade and insurance, large scale manufacturing industries, transport and the general will of people to take risks and learn new things for development. According to [55], the development of entrepreneurship in pre-colonial days (in most African countries) was not encouraged in the large population proportion because all local and international trade activities were controlled by the rulers, hence leading to poor contribution of entrepreneurial skills to individuals.
But currently, unlike previously, entrepreneurship is on the rise in Africa, amid a new generation of millennials growing up, [62], specifically in the construction industry, alongside massive infrastructure development, new technologies and innovative businesses, leading to transformation of most African economies. Principally, today entrepreneurial skills are necessary as the primary engine of job creation, income generation and poverty alleviation. These are needed by students, business managers and other tradesmen in order to encourage them to think out of the box. According to [63], most skills are obtained through learning or inheriting from relatives who already possess them. Any person who possesses these skills may have a greater possibility of working or operating elsewhere to ensure permanent continuity and change in local economy, vis-à-vis strong desire on initiating a business, careful planning, good ideas, determination and hard work.
The entrepreneurship rise in Africa has also affected Tanzania positively, hence making it commit itself to the development policies that promote entrepreneurship in all sectors of the economy so as to alleviate poverty, generate employment, contribute to the diversity of entrepreneurship and improve competitiveness, [72]. This is due to fact that entrepreneurship has been identified as a solution to a myriad of socio-economic problems facing developing countries, [20], particularly Tanzania, which can be uplifted by the country’s construction industry, as it is an important sector that plays an essential role in socio-economic development. This is evidenced by [38, 50], who report that in the period of five years (i.e. 2010 - 2014), the Tanzanian construction industry recorded an increase in the registration of construction companies at an average rate of 7.2% per year, which is a growth rate of 11.1% per year compared to 7.5% in 2009. In this period, the industry contributed to Tanzania’s GDP at an average of 9.6% per year compared to 8.0% in 2009. Furthermore, the industry generated employment opportunities at an average of 2.6%, as a result of the sector being labour intensive. [38]; also edifies that; the construction industry also employed 9% of the workforce in Tanzania, hence contributing 13.6% to the Tanzania’s GDP during 2015, alongside having a growth rate of 4.3% in Q1 2016, compared to 23.2% in the first quarter of 2015.
Despite these achievements, the Tanzanian construction industry is still young and behind, with a limited number of professionals, low technology and poor economy, coupled with less governmental support toward its development. The country as a whole depends mostly on foreign companies (informally) and foreign institutions (formally) to train her indigenous professionals, contractors and consultants to execute big projects (e.g. highway construction and complex buildings). Local contractors do not get enough and effective support from the government or financial institutions to make them develop, and thus compete in the industry. To counter this circumstance, entrepreneurial knowledge is one of the peculiar qualities/skills which can have a direct impact on the growth and efficiency of construction industry as it creates wealth apart from the company capital accumulated. Several studies show that construction practitioners have devoted their attention to their individual projects. Thus, issues of concern to the industry (although they have implications for economy and efficiency on projects) have been ignored. Thus, this study aims at providing insight on the barriers to entrepreneurship in the building construction industry and assist to motivate practitioners who wish to be entrepreneurs in Tanzania.

1.1. Statement of the Problem

Entrepreneurship in today’s world is necessary as the primary engine of job creation, poverty alleviation, improvement of quality of life, income generation and economic boost-up. It motivates students, commercial managers and other tradesmen to apply their entrepreneurship skills and knowledge, and encourage them to think out of the box, despite numerous unexpected challenges and barriers, [71,83]. Moreover, it contributes to the growth of the country’s construction industry, the sector in which a lot of business opportunities can be created if knowledge of entrepreneurship is well disseminated to the people, hence increasing their desire to become entrepreneurs. However, people with high levels of desire on the same may ultimately not act upon their intentions, due to certain existing barriers. For example, these challenging issues may prevent fresh quantity surveyors, engineers and architects from starting and running their own new construction business. Thus, it is important to clearly identify such barriers in order to deal with high level of unemployment, [63] which is extreme in most developed countries like Tanzania. Basically, [18] insists that creating a successful and long-lasting building construction company involves many stages and activities which constantly encounter a number of obstacles. Some of the most important activities to be considered in the process include acquiring resources, hiring new personnel, strategic planning, and hiring external management. None of these activities is easy to pursue, and hence they may lead to founders’ motivation being pressured at some point.
Furthermore, [45] enlightens on how entrepreneurship, as a new policy priority, is reflected in the “Vision 2025”, “National Trade Policy of 2003”, “SMEs Development Policy of 2002”, and the Higher Education Policy of 1999. But still there are gaps between policies at ministerial level, and their implementation at institutional and functional levels. Therefore, in order to fill the gap, this study focuses on exploring the barriers to and motives for entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania. Specifically, the study examines the barriers and identifies the motives for adoption of entrepreneurship in the building construction industry and proposes solutions to the barriers of entrepreneurship and their adoption on the building construction industry in Dar-es-Salaam, Tanzania. The study will provide knowledge to construction practitioners who wish to apply entrepreneurial skills but do not know where and how to start. It will also be useful to academicians, researchers, central and local government entities, and other construction stakeholders in the private sector.

2. Barriers and Motives for Entrepreneurship in the Building Construction Industry

The building construction industry is surrounded by a number of key entrepreneurial skills and elements contained prominently in entrepreneurship, which as per [14], include ability to identify and exploit a construction business opportunity; the human creative effort on developing a construction business with value; willingness to undertake risk; and competence to organise necessary resources that can respond to the construction business opportunity available. One must have several motives to attain these key skills and elements, but at the same time, it cannot be easy due to the existence of barriers in the building construction industry. This is due to the fact that entrepreneurial process is affected by a person’s motivation, which in turn is partly dependent on the decided goals and the possessed specified skills, qualities and other technical aspects needed, along with several other drivers that affect the decision making in the entrepreneurial process. However, to fully understand entrepreneurship, motivation should not be neglected as an important factor in the entire entrepreneurial process, [18,49,74].

2.1. The Concept of Entrepreneurship

Entrepreneurship is an ambiguous and multi-faceted term, with no universally agreed definition. This has led to the existence of multiple ways of defining the concept, [7,32]. Writings by shares five (05) perspectives on entrepreneurship, which include entrepreneurship as new construction business creation; entrepreneurship as the role of the owner or manager of a small or medium-sized construction company; entrepreneurship as an economic function to allocate resources and capitalize on opportunities; entrepreneurship as a personal behavior of an individual in the quest for a prospect; and characteristics of entrepreneurs. Below are conceptions of entrepreneurship:
§ Entrepreneurship, as per the definition by [33], is first and foremost a mindset, which covers an individual's motivation and capacity, independently or within an organization, to identify an opportunity and to pursue it in order to produce new value or economic success. [33] adds that it takes creativity or innovation to enter and compete in an existing market, to change or even to create a new market. To turn a business idea into success requires the ability to blend creativity or innovation with sound management practices and to adapt a business to optimize its development during all phases of its life cycle.
§ Entrepreneurship being the activities of the entrepreneurs, which involves a process directed towards using opportunities, possibilities and resources, by creating something new to either solve a problem or satisfy a need as well as to promote an economy, [2,13,22,32,77,82].
§ Entrepreneurship can also be defined from two perspectives, i.e. venture creation, and utilization of opportunity (creation of construction businesses), [2].
§ Entrepreneurship likewise can be defined as the tendency to create value through identification and exploitation of opportunities, which include starting and managing one’s own business, [19].
§ [24] defines entrepreneurship as a way of thinking, reasoning and acting, that results in the creation, enhancement, realization, and renewal of value for an individual, group, organization, or society. At the heart of this process, is the creation and/or recognition of opportunities followed by the will and initiation to seize these opportunities.
§ According to a report by [21], an expert group on vocational training, entrepreneurship is referred to as an individual’s ability to turn ideas into action. It covers creativity, innovation and risk taking, and the ability to plan and manage projects in order to achieve objectives.
This study, defined entrepreneurship in line with [2,9,11,32,81] as one aspect of business in which a person, or team, starts or establishes or founds and operates a new construction company or business by exploiting their dynamism; innovativeness; vision and recognition, evaluation, and opportunity exploitation ability; creativity; flexibility; and willingness or energy or passion to take and demonstrate risk-taking as well as risk-tolerance ability, for the purpose of making profit, rather than working for a more established organization. This definition is also in line with [16] regarding the ability of the establisher on formulating an effective team, using his/her creation skills on managing needed resources, and fundamental skills of building a solid business plan, and finally, the vision on recognizing opportunity where others see chaos, contradiction, and confusion.

2.2. Entrepreneur

The word “entrepreneur” according to [60], is derived from a French verb entreprende, and a German word unternehmen. It was later coined by a French Economist, Richard Cantillon in the early 18th century, with the literal meaning “to undertake”, implying that a person with some elements of risk-taking and decisions about resource allocation, can buy at certain price and sell at an uncertain price. The literature on entrepreneurship has a number of definitions of who exactly is an entrepreneur.
§ [64] stresses that entrepreneurs see “problems” as “opportunities,” then take action to identify the solutions to those problems and the customers who will pay to have those problems solved. Entrepreneurial success is simply a function of the ability of an entrepreneur to see these opportunities in the market place, initiate change and create value through solutions.
§ Moreover, [2] adds that an entrepreneur is a person who creates new business or coordinates his or her resources to introduce new offering to the market or someone who uses his or her skills to develop an innovation to either a new business or an existing one. The person (entrepreneur) possesses certain personality or character such as risk taking, innovativeness, independence, autonomy and exercising of power. Therefore, an entrepreneur is an individual who is personally determined to make a business out of his or her unique, improved and fresh idea.
With reference to [10,45,74,75,81] ’s views, this study defines an entrepreneur as an ingenious individual or a person who seeks to generate value by independently planning, starting or developing or creating or expanding, and actively managing his or her own construction business, via identifying and exploiting new products, processes or markets and introducing new ideas into an economy, hence changing the rate at which the wheels of enterprise go around, alongside adding to their own wealth, power and prestige.

2.3. Types of Entrepreneurship Skills

Most literature identifies types of entrepreneurial skills as management skills, technical skills, and facilitating creative thinking skills. Other entrepreneurship skills include the following:-
§ Creative problem solving skills, and articulating ideas
§ Negotiation or selling or proposing skills,
§ Social skills, and leadership skills,
§ Strategic thinking or planning skills,
§ Decision making under uncertainty,
§ Opportunity identification and skills deployment, and
§ Assertiveness and interpersonal skills.

2.4. The Importance of Entrepreneurship

[18] reports that entrepreneurship has had an increasing interest from scholars in the last couple of years due to the following reasons:
§ Entrepreneurship is the economic engine that drives technological innovation and change,
§ It is the process whereby supply and demand meets,
§ It not only generates new knowledge but also converts it into new products and services,
§ It plays an important part in society,
§ It is need to understand the development of human and intellectual capital, and
§ Entrepreneurship creates new jobs.

2.5. The Construction Industry

The term “construction” covers a wide range of activities (i.e. installing floors, walling, roofing, water drilling, sandblasting, painting etc.) which include building and civil engineering works, [53]. The construction industry in Tanzania is divided into three service groups. The first group is comprised of professional services (consultants) such as architectural, quantity surveying, civil and electrical engineering and other specialists’ services. The second group consists of the support services, which include regulations and advisory institutions that monitor professional constructions to ensure that they run systematically as per their objectives. The third group comprises the construction services which include all kinds of contractors [38].

2.6. Barriers to Entrepreneurship in Building Construction Industry in Developing Countries

The building construction industry continues to be surrounded by a number of barriers which hinder their success. For example, staring a building construction business is a challenge as the process involves a number of issues such as dealing with construction permits, getting electricity, registering property, tax administration, trading across borders, getting credit, protecting minority investors, enforcing contracts, employing competent workers, resolving insolvency together with slow progress. Besides, according to [69], demographic and personal factors can act as barriers to entrepreneurial intentions. These include gender, family, business experience and education level. All these can have a significant influence on intention to do business. For example, female are less interested in entrepreneurship than males, and higher education has a strong influence on individuals to become entrepreneurs. Other identified barriers of entrepreneurship in the building construction business/industry are presented in Table 2.1 below.
Table 2.1. Barriers of entrepreneurship in the building construction industry
     

2.7. Motivating Factors for Starting a Building Construction Business

A study by [41] points out that the concept of motivation has its origins in Latin, as it is derived from the Latin word movere, meaning to “move”. They clearly state that motivation is something which impels (moves) someone to do something, and it is the “dynamic system of internal motives for activity (or inactivity) by an individual, which determines his behaviour and feelings, by expressing the dynamics of an individual. It depends on changing circumstances. Furthermore, [37] edifies that motivation is the process that accounts for an individual’s intensity, direction and persistence of efforts towards attaining a goal, and its factors are the positive points which are essential for starting a new building construction business, for the entrepreneurs.
As [3] points out, most individuals become entrepreneurs primarily due to pull, than push factors. The pull theory holds that individuals conduct entrepreneurial activities because of personal motives such as self-fulfillment, wealth, and independence, while the push theory contends that individuals are pushed into entrepreneurship by negative external forces such as unemployment, insufficient salaries, and job dissatisfaction, [3]. Other entrepreneurial motivating factors on starting a building construction business are listed in Table 2.2 below.
Table 2.2. Motivating factors for staring a building construction business
     

2.8. Solutions to Entrepreneurship Barriers in the Building Construction Industry

A number of solutions to entrepreneurship barriers in building construction industry have been highlighted in the literature. These include the following:
§ Creation of finance sections that enhance the availability of start-up financial capital, i.e. low interest loans, alongside regulating the access to credit and loans facilities in terms of the processes involved and time, as well as security needed by the financial institution and banks;
§ Integrating national business portal with other Government institutions’ electronic systems; reviewing laws and regulations; capacity building; and creating a physical one stop shop at BRELA for all institutions involved in starting business processes (i.e. TRA+BRELA+NIDA+ LICENSING);
§ Operationalization of guideline document on issuing building permits, and managing building construction activities in LGAs; review of legal mandates of all responsible institutions and joint inspections through a one stop center;
§ Reducing time and costs to process permits; establishing one stop centre operated through an online system; and simplifying application for obtaining connectivity;
§ Implementation of integrated land management information system (ILMIS), and awareness creation on the process and requirements for the registration and valuation of properties; as well as surveying and mapping of land for investment;
§ Reducing the number of tax remittances per year, simplification of tax payments through electronic payment systems, establishment of single window payment system, as well as fair valuation during tax reconciliation and payment;
§ Putting in place a framework for automation of TIN and VAT along with business/company registration; amending the Tanzania Investment Act in consistence with the VAT Act; and creating awareness on payments procedures of capital gains taxes;
§ Operationalizing electronic single window system and one stop border posts; reducing the number of permanent road blocks along highways through establishment of one stop inspection stations (OSIS) and replacing mechanical weighbridges with electronic weigh-in-motion bridges;
§ Enacting the Secured Transactions Act, and establishing a centralized electronic registry for movable collateral to make it easy to getting credit;
§ Reviewing Capital Markets and Securities Act and its Regulations; enforcing continuous disclosure requirements for listed companies; and installing and merging of trading platforms, warehouse receipt systems and central securities depository;
§ Enforcing contracts by simplifying procedural laws and rules to expedite dispensation of justice, and improving electronic case management systems;
§ Enhancing labour skills, productivity and competitiveness in the labour market; reviewing labour laws, regulations, and standards; establishing online social security registration system; and establishing online system for application, issuance and renewal of residence and work permits for non-citizens; and
§ Resolving insolvency by reviewing legal framework on matters of insolvency including enactment of one piece of legislation to enhance efficiency in insolvency proceedings.

3. Methodology

This study used a descriptive design survey which is in line with the approach used by [34,35,36,40,66]. Through this approach, literature review, questionnaires and interviews were used to collect information from graduate and registered quantity surveyors and architects, in the building construction industry based in Dar-es-Salaam. These were used as the unit of analysis and they included people with different years of experience. The case study was employed because it can bring an understanding of a complex issue or object, and can extend experience or add strength to what is already known through previous research. It also emphasizes detailed contextual analysis of a limited number of events or conditions and their relationships. Also, the study used both qualitative and quantitative approaches, which made it easier to achieve the intended objectives, samples and design of the study, as well as to rank barriers and motives of entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania.

3.1. Data Collection Methods

Both primary and secondary data collection were done using multiple sources of evidence. Questionnaire survey was used to collect primary data from graduate and registered quantity surveyors and architects. The respondents answered the questions on their own, [34,35,36, 40,66]. Some of the questions were close ended and others were open ended to allow the respondents to give their opinions and give more information. Furthermore, secondary data concerning barriers, solution and motives for entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania were collected from literature review via published and unpublished books, journals, articles and papers. The literature was reviewed to determine the meaning of entrepreneurship, entrepreneur, types of entrepreneurship skills, the importance of entrepreneurship, construction industry, as well as barriers, solution and motives for entrepreneurship in the building construction industry. All respondents had different years of experience in the construction industry.

3.2. Questionnaire Design

In this study, the questionnaires were prepared in accordance with the research objectives. The questionnaire was divided into four (04) parts which covered graduate and registered quantity surveyors and architects. The first part elicited general information about respondents while the second part gathered information on barriers of entrepreneurship in the building construction industry. The third part elicited information on the motives for the adoption of entrepreneurship in the building construction industry, and the fourth part sought to collect data on the solutions to the entrepreneurship barriers and their adoption in the building construction industry. Through a quantitative approach, the data were obtained through a questionnaire survey, using a closed ended questionnaire which was compiled based on the refined list above, after a pilot study. Closed-ended questions were used as they are very convenient for collecting factual data and are simple to analyze because the range of potential answers is limited, [34,35,36,40,66]. However, open ended questions were also incorporated to get further opinions from respondents. The pilot study was carried out to test the quality of the questionnaire and improve reliability of the questions. By using a 5-point likert scale, and by considering [34,35,36, 40,66]’s views on scaling, the respondents (graduate and registered quantity surveyors and architects), were asked to respond to each statement, by indicating whether they Strongly Disagree (SD) = 1; Disagree (D) = 2; are Neutral (N) = 3; Agree (A) = 4; or Strongly Agree (SA) = 5. This type of scale has been found to be acceptable in other construction management studies.

3.3. The Study Sample and Population

[34,35,36,40,66] define population as the entire mass of observations, which is the parent group from which a sample is to be formed. Additionally, [34,35,36,40,66] affirm that this is a group of individuals, objects or items from which the sample is taken for measurement, and it refers to an entire group of person or elements which have one thing in common. In this study, the sample population included graduate and registered quantity surveyors and architects as seen in Table 3.1. The study employed both probability and non-probability sampling, by selecting randomly and purposively, the graduate and registered quantity surveyors and architects in the building construction industry, out of the total study population, and from the lists of registered professionals and graduates, respectively.
Table 3.1. The study population sample
     
Basically, Dar-es-Salaam was selected as the study area because most of the graduate and registered quantity surveyors and architects in building construction industry are based in the area as seen in Table 3.1. The respondents were randomly selected so that each unit of the population could have an equal chance of being selected. Three criteria were employed in determining the appropriate size. These included the level of precision, the level of confidence or risk and the degree of variability in the attributes being measured. Moreover, a simplified formula by [31] was used to calculate the Sample Size (n), as shown below.
Total Population Size, (N) = 91.
Using the study population of graduate and registered quantity surveyors and architects as seen in Table 3.1.
Table 3.2. The study population sample distribution
     
Therefore, the total sample size for the study was 91 graduate and registered local quantity surveyors and architects, in Dar-es-Salaam, Tanzania, and it was distributed as seen in Table 3.2. The respondents’ gender distribution and years of experience are presented in Table 3.3 and Table 3.4 respectively.
Table 3.3. Respondents gender distribution
     
From Table 3.3 above, the largest number of returned questionnaires was from respondents with experience below 5 years in the building construction industry. This is very relevant to the study as the major concern is to determine the extent to which the fresh graduates/professionals are affected by barriers of entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania.

3.4. Respondent’s Response Rate

The study targeted 100 respondents. A total of 80 out of 100 distributed questionnaires were filled appropriately and returned, thus used for data analysis. The reason for distributing a larger number of questionnaires than the targeted sample size (91) was because the researchers wanted to obtain as more responses as possible, which would be close to the targeted sample size, as seen in Table 3.5. This is in-line with [8] who insists that any response of 50% and above is adequate for analysis and is a reliable responses rate for data analysis.
Table 3.4. The respondents’ profile, indicating demographic characteristics of 91 respondents obtained from the survey which consisted of parameters like years of experience in the construction industry
     
Table 3.5. A summary of the distribution and response rate of the questionnaires administered to all graduate and registered local quantity surveyors and architects in Dar-es-Salaam, Tanzania
     

4. Results, Analysis and Discussion

Main parameters used for investigation in this study involved exploring the barriers and motives of entrepreneurship in building construction industry in Dar-Es-Salaam, Tanzania. Data were collected, coded, classified, and analyzed using SPSS, and presented using Microsoft Word and Excel (Tables) in order to get more accurate computation that mapped out a pattern or relationship between measured or comparable variables. The study adopted the use of quantitative analysis method by using syntax mathematical operation in determining the mean score. The computation of the cumulative data and ranking was done by using the mean score formula, i.e.
Mean Score Value =
Furthermore, the study revealed that; all respondents (i.e. 100%) were aware with the entrepreneurship knowledge and skills, and they sometimes apply it/them in their daily activities within the building construction industry.

4.1. Barrier to Entrepreneurship in the Building Construction Industry in Dar-Es-Salaam, Tanzania

On examining the barriers to entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania, data were collected from two categories of respondents. The first group involved local graduates quantity surveyors and architects, and second group included registered quantity surveyors and architects, based in in Dar-es-Salaam, Tanzania. The respondents were given a Likert scale ratio with five criteria to indicate the level of agreement of the examined barriers ranging from Strongly Disagree (SD) = 1; Disagree (D) = 2; Neutral (N) = 3; Agree (A) = 4; to Strongly Agree (SA) = 5. The analysis of frequency including mean under descriptive statistics and comparison of mean was done to the data related to barriers. Mean score comparison tables were used to rank the results in order of their importance, by taking into account the mean scores as shown in Table 4.1. This is in line with [31] who pointed out that a simple approach using means of variables is valid. Basically, the factors with high mean score values deliver a high satisfaction of respondents.
Table 4.1. Barriers to entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania
     
The findings in Table 4.1 reveal fourteen (14) most critical barriers of entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania, with the mean score above 4.00 for both graduate and locally registered quantity surveyors and architects. These barriers are further explained below.
Lack of start-up capital, limited access to credit, collateral or security as well as long and time consuming procedures in obtaining loan facilities: This was ranked first with the mean score value of 4.84, hence availing itself as the most critical barrier among all affecting the ability of building construction businesses to grow, develop and contribute to the national economic development. Its effect has also been observed by [3,4,5,7,17,20,28,29,32,33,44, 45,49,57,58,59,60,61,63,65,67,71,73,74,78,81,82,83]. These authors inform that factors such as inadequate financial capital and moral support, inadequate financial liquidity, loan size demanding high transactions cost, limited track record, incredibility and lack of collateral or security protecting the high risks involved, as well as limited access to bank loans or credits facilities that are normally given with high interest rate, have had a profound effect on funding (i.e. start-up capital on establishing, capital for re-investing, running, continuing and maintaining) the building construction business. Furthermore, [2,28,42,71] shade light on how financial institutions are reluctant to offer funds to small building construction firms due to higher lending risks caused by the perception of their higher failure rates. This inhibits the growth of building construction business, specifically those planned for establishment by the youths (i.e. graduate quantity surveyors and architects). Even [29,33] insists that entrepreneurial building construction ventures with little or no collateral may possibly stop founders from applying for loans from formal financial institutions, and instead find other alternatives. [49,82] assert that the problem does not appear to be so much of lack of funds but rather how these ventures access finance as available funds are often diverted to the larger enterprises, and only an insignificant number of entrepreneurial ventures are able to attract bank loans. Generally, sources of financing for entrepreneurs include advance from family and friends; grant from donor organizations; initial public offering; founder or owner’s equity; loan from banks/financial institutions; angel investors, remittances; and venture capital, [7,43].
Government policies (unpredictable policy framework): This ranked second with the mean score value of 4.80. The results were in-line with the findings by [33,74] who insist that the excessiveness and inflexibility of laws and regulations affecting entrepreneurial construction ventures in several ways with respect to compliance with complicated laws and regulations that consume much time, money and effort which most entrepreneurs are not able to offer. All these complicate and discourage entrepreneurs from starting a building construction business or registering and formalizing the existing one. Moreover, studies by [3,4,33,70] revealed that insufficient government support, inadequate legal framework regulatory in association with lack of coordination and implementation of policy and programmes as well as corruption, continues to erode the benefits (i.e. a country and construction company’s economics growth) that can be derived from entrepreneurship. Another challenge is absence of government policies that would promote taxes, or regulations which encourage market competition and entrepreneurs by having direct programmes that can assist new and growing firms at all levels of government (national, regional, municipal) [10,71].
The founder’s inability or unwillingness to change was ranked third with the mean score value of 4.67. This encompassed negligence or failure on anticipating, reacting and keeping up with competition, new technology, changes in the marketplace, and cash flow.
Lack of mentorship, training facilities and negative attitudes towards graduate entrepreneurship: This ranked fourth with the mean score value of 4.60. Basically, [4,28,73] inform that the growth and sustainability of any building construction business economically, technically socially etc. depends on the availability of mentorship or support to young entrepreneurs (graduate), which can boost-up their confidence and the ability to make strategic choices, rather than discouraging their spirits as it was suggested by most well experienced professionals who were against opening up a new building construction company.
Poor implementation of government policies by officials, and poor government support, alongside unpredictable policy framework:- This ranked fifth, with the mean score value of 4.48. [7,71] recommend that policymakers must address the issue of high tax burdens, alongside introducing tax incentives (i.e. investment tax credits or tax credit policies etc.) as part of the policy instrument which can be used in fostering investment and risk capital within the country. This will also enhance the growth of building construction companies. The unpredictability circumstance in terms of policy framework was also revealed with the example of the government circular on using state-owned/public construction companies in most state-owned/public projects, instead of private ones. Also, the government’s decision to shift most of its activities from Dar-es-Salaam to the capital city of Dodoma has affected a number of projects implemented in Dar-es-Salaam. Currently, most of the building construction projects are being implemented the capital city.
High initial cost of work, and risk of failure (the loss of the invested capital): This ranked sixth, with the mean score value of 4.53, and is in line with [7,29,74,76,] who reported the same issue as one of the barriers to entrepreneurship in building construction business. Other barriers related to this include competition in the markets, lack of confidence and high risk which discourages potential construction business entrepreneurs, employees, and the financial system from starting new building construction companies.
Poor marketing and management skills as well as strategic planning:- This ranked seventh, with the mean score value of 4.47, and it correlates with the findings by [5,29,33,42,44,61,70,71,74] who reported the following barriers: lack of skills to grow and to lead teams; lack of sufficient knowledge in management and basic business skills; lack of entrepreneurial mindset; need for essential managerial skills; as well as inadequate market research, market experiences, and ruthless market pressure which requires the implementation of good marketing strategies. These barriers are in relation to budgeting and managing finances, planning and undertaking business operations, entrepreneurial competencies (innovation, risk taking, creativity, idea generation) and human relations competencies (hiring, staff development, leadership).
Inadequate information and professional experience in the building construction industry as well as poor record keeping: This ranked eighth, with the mean score value of 4.45. The driving factors in this aspect were identified as lack of networking, awareness and knowledge on different start-up financing possibilities, access information in the financial markets as well as other available business support services. These factors are in line with the findings by [3,4,28,81,74]. Lack of information among lenders and borrowers makes it difficult for banks to access the true value of any building construction enterprises. Also, financial institutions’ inability to obtain information on the operations of SMEs serves as a risk for credit [33,71]. Difficulties with business registration (i.e. the way around tax, VAT, business license, TIN number registrations) were also earmarked as a barrier among graduates quantity surveyors and architects. Complete and accurate records keeping are critical and significant in any building construction business venture, as [33] insists, record keeping is indispensable to making a good administrative decision, stability and fairness, neutrality, non-stop learning and development, and efficient management of risk. Furthermore, [33] affirms that blanket record keeping process enables building construction entrepreneurial ventures to produce correct and up-to-date financial reports, which provide an understanding of the development and present status of the venture. Also, inferior record keeping makes entrepreneurs incapable to track their ventures, thus restricting their aptitude to uncover and solve problems quickly.
Lack of trusted business partners/skilled workers or employees:- This ranked ninth, with the mean score value of 4.44. It is a critical problem surrounded by trust issues and inadequate essential skills, knowledge and experience. This was also revealed in studies by [4,5,29,33,44,45,83] who pointed out that finding and hiring or accessing good, reliable, trustworthy and skilled human resource or workers is a serious problem affecting the development and growth of entrepreneurial, and that it evolved as the most critical barrier. [33] explains that the quality instead of the number of workers greatly impacts the development of these ventures. Skilled labour is the type of labour that functions at an advanced level and has the potential to generate new ideas and methods in economic activity.
Institutional complexity (bureaucracy): This ranked tenth with the mean score value of 4.4.2. The results are in line with [2,32,61,65] who identified the following barriers as the most critical: lack of transparency and predictability of the legislative and regulatory environment; inefficient legal system; poor effectiveness of policy; unnecessary bureaucratic process and impediments in registering and licensing building construction business; and inefficient administration of government incentives (e.g. exemption). [48] argues that one of the main limiting factors affecting entrepreneurial dynamics is the legislation and the regulatory environment, i.e. intellectual property rights, immigration laws, income tax, insolvency law and corporate recovery, and formal process creation of new businesses. All these can be dealt with via reduction of bureaucracy, regulations and taxation because the legislative and regulatory environment related to construction business activity, particularly in industrial areas, bank financing and taxation have a significant impact on the motivation associated with the act of taking and building [6,25,67].
Corruption and collusion:- This ranked eleventh with the mean score value of 4.40. The same results are shared by [2,17,28,33,39,44,45,] who observed that escalating volume of corruption practices and inflation were among issues that pose threats in the absence of strong financial systems to the development of construction business entrepreneurial venture. Corruption impediments to registering and licensing a business were also cited as barriers [32,61].
Complex nature of construction works:- This ranked twelfth with the mean score value of 4.17. Driving forces contributing to this barrier include shortage of skilled labour, lack of technical knowledge, poor construction business exposure, delayed payments, theft on site (e.g. building materials on site,) inflation, unrealistic tender figure, stiff competition, and corruption. These findings are in line with [3,70,73].
Limited infrastructure and services (road, ports, electricity supply, water supply, etc.): This ranked thirteenth, with the mean score value of 4.04. The contributing agents to this challenge include inadequate, inefficient, and non-functional infrastructural facilities; poor roads; poor telecommunication; poor water supply; poor electric supply; and power outrage. The findings are in line with [2,3,4,17,28,32,39,44,61,83]. Basically, economic performance and competitiveness of entrepreneurial ventures are enhanced through having high quality basic infrastructure (i.e. good and maintained road network, airports, and seaports, a stable electric power supply, and an extensive telecommunications network); property rights, commercial, accounting, and other legal services; as well as institutions that support or promote SME’s. Without these, it is difficult to build a successful construction business, [10,333]. By recognizing the importance of infrastructure for economic growth, the government has continued to put more efforts on construction by allocating 13% and 18% of the 2010/2011 and 2012/2013 development budget to infrastructure, respectively, [72]. The construction industry contributed 12.5% to Tanzania’s GDP in 2014 compared to the 8.8% contribution to the country’s GDP in 2008.
Limited financial, business skills and assets: This ranked fourteenth with mean score value of 4.01. The main issues in this barrier included lack of financial skills (accounting, budgeting, capital structure), general business skills (management, marketing, sales, human resources); lack of familiarity with accounting concepts; inadequate investment to start and run a business, and associated financial risks. These findings are in line with [4,28,29,61,74,76]. For example, [63] reports that South African youths (i.e. between 18 and 35 years who in real sense do not have any personal assets) also face difficulties in obtaining funding due to financial institutions taking into consideration the youth’s assets and financial management skills, before granting the funding.

4.2. Motives for Entrepreneurship in the Building Construction Industry in Dar-es-Salaam, Tanzania

Data on the motives for adoption of entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania were collected from both groups: the local graduates quantity surveyors and architects, and the registered quantity surveyors and architects based in in Dar-es-Salaam, Tanzania. The respondents were given a Likert scale ratio with five criteria to indicate the level of agreement on the identified motives ranging from Strongly Disagree (SD) = 1; Disagree (D) = 2; Neutral (N) = 3; Agree (A) = 4; to Strongly Agree (SA) = 5. The analysis of frequency, including mean under descriptive statistics and comparison of mean was done to the data related to motives. Mean score comparison tables were used to rank the results in order of their importance by taking into account the mean scores as shown in Table 4.2.
Table 4.2. Motives of entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania
     
Numerous past research show that entrepreneurial motivations may differ due to geographical regions, and the economic conditions of the country, [62]. Likewise, [50,72] show that the factors that motivate a building construction business to start are related to the subsequent building construction business growth. Table 4.1 above presents eleven motives for entrepreneurship in the building construction industry in Dar-es-Salaam, Tanzania with the mean score above 4.00 for both graduate and locally registered quantity surveyors and architects. These motives are further clarified below.
Financial freedom, need for self-achievement and resources of the founder or owner: This ranked first with the mean score value of 4.87. Most respondents mentioned the following as the main reasons for adopting entrepreneurship in building construction: having financial autonomy and freedom with fiscal strength via making or earning a very high personal income and great wealth, giving oneself, a partner and children financial or income security, stability; financial success; and flexibility for family commitments. These reasons are in line with [2,12,43,57,75, 76,83].
Strategic business planning, decision making and communication skills of a founder:- This ranked second, with the mean score value of 4.82, and it is in line with [2,44,70,79,] who explains that strategic planning is the attempt to prepare for all eventualities by abstraction, so as to account for the complexity and the dynamics of the environment. This is apart from being viewed as an activity which involves decision about ends as well as results, alongside having effective communication skills and interpersonal relationship.
Strategic decision making skills and leadership skills of the owner/founder: This ranked third with the mean score value of 4.74. Basically, strategic decision skills deal with the long-run future of the entire building construction companies, by taking advantage of long term opportunity, with relative calculation against the barriers therein, [54,79]. According to [56], strategic decision refers to the goal-directed cognitive process where the importance of planned actions or non-programmable decisions in uncertain and complex environments affects the health and survival of an entrepreneurial construction business where the future is unpredictable. Additionally, [2] contends that efforts made by several government agencies, private sector, professional groups and associations in many developing nations towards entrepreneurial and institutional development, especially on training, capacity and competence development for SMEs, are indeed making a landmark for more cognitive strategic decision making which fosters growth in the construction sector and enhances the opportunities for SME’s survival.
Founder’s or owner’s ability to take and withstand risks: This ranked fourth, with the mean score value of 4.67.The motivating factors in this aspect were mentioned as willingness and ability to calculate, accept and withstand the risk (e.g. financial risks); to work hard and be confident; to continually learn; to avoid unnecessary loss and mistake in strategic decision making; and to be undaunted by challenges. These factors are in line with the findings by [11,46,67,79],. For profitability and reduction/elimination of loss in any building construction business, there has to be risk calculation before or during every business operation [2].
Qualification/expertise of person, and desire for independence and self-governance: This ranked fifth with the mean score value of 4.65. Most respondents mentioned the following contributing factors: having independence in decision making and control of own life; being able to use own past experience and training; willing to become own boss; personal interest in the area; feeling personal satisfaction with own work; family hardship/pressure; dissatisfaction with previous occupation; creating own lifestyle; ability to choose where to work from; and achievement and flexibility. These are in line with the findings by [2,26,46,74,75,76]. Building construction businesses created by autonomy and family motivated entrepreneurs have a higher chance of survival, [76].
Inspiration from successful people in the industry, inspiring others, and building a legacy or a business to pass on:- This ranked sixth with the mean score value of 4.62. Most respondents mentioned the following reasons: following the example of someone admired; taking over family business and continuing a family tradition; encouragement or advice or inspiration from an experienced friend, family members, relatives, or young successful entrepreneurs in building construction industries, colleague or advisor; building a legacy or a business to pass on; ambitions of becoming self-reliant, materializing their ideas and skills; gaining social prestige and power; experience gained in employment. These correspond with the findings by [12,26,28,46,75,76,79]. Entrepreneurial firms create individual and employee wealth which contributes to the generation of tax revenues, apart from being the seedbed for the growth of successful large construction enterprises, as reported by [82].
Professional development/improving skills and awareness on where to look for support, and social network: This ranked seventh with the mean score value of 4.50. There is a positive relationship between the social network that an entrepreneur has, and the performance of the owned building construction business project because social networks can have access to relevant information, technology, financial, non-financial as well as business contacts, [15,27,76,].
Loss of job or dissatisfaction with previous or current job and the will to try/experiment with business alongside learning from it: This ranked eighth with the mean score value of 4.46. Motivating factors mentioned by respondents include pursuing own ides; lack of employment opportunities and career prospects; loss of job or risk of losing job and being unemployed; dissatisfaction with current jobs; and desire to change hobby into business/career. These correspond with the findings by [2,43,46,76,79,83]. Furthermore, [12] recognizes frustration at work as one of the main factors influencing one to start a business, alongside the desire to gain respect and social admiration.
Competition, ability of survival of the firms, and the ability to see business opportunities, start and run the businesses: This ranked ninth with the mean score value of 4.45. Factors mentioned include inspiring youths to become entrepreneurs; high competition; and exploiting innovative business ideas and opportunity backed up with the ability to start business. These are in line with the findings by [2,12,63,74]. Essentially, this motivating factor looked into founder’s entrepreneurship skills which involved recognizing economic opportunities and acting effectively on them, by keenly finding out ability in taking and withstanding risk; innovation; being change oriented; persistence, and inner discipline, which were also the results shared in [14]. According to [27], the purpose of becoming an entrepreneur depends entirely on the personal attraction to entrepreneurship and perceived self-ability.
Technical skills of the firm’s founder or owner: This ranked tenth with the mean score value of 4.40. It is associated looking into skills necessary in developing the building construction business, which included aspects such as communication, business environment, design complexity and construction ability, operations, etc. These were also reported in studies by [14,70,79].
Efficient managerial skills of firm’s founder or owner: This ranked eleventh with the mean score value of 4.38. It is associated with the day-to-day management and administration of the building construction company, focusing on management in terms of planning, decision making, marketing, and finances. These correspond with the results shared by [2,14,70,79].

5. Conclusions and Recommendations

5.1. Conclusions

The results of this study show that registered graduate quantity surveyors and architects face more barriers in comparison with local registered quantity surveyors and architects despite being highly motivated to adopt entrepreneurship in the building construction industry. Moreover, the barriers as the most inhibiting factors lead to failure or incompetence of graduates registered quantity surveyors and architects to explore and practice their building construction entrepreneurial knowledge and contribute to the growth of the industry and the economy at large. Generally, the strongest barriers were those with a mean score value of 4.00 as seen in Table 4.1. It is also believed that one may not necessarily become an entrepreneur by starting his/her own building construction business. Conversely, one may become an entrepreneur by behaving in an entrepreneurial way in his or her place of work, and this situation is termed as entrepreneurship.

5.2. Recommendations

Based on the findings and conclusion made, the following are proposed as solutions to the entrepreneurship barriers and their adoption strategies in the building construction industry in Dar-es-Salaam, Tanzania.
§ Introducing financial incentives and subsidies (e.g. tax), alongside integrating banks with building construction companies, for easy advance payments, and loan acquisition, in order to be able to run the project and give the payments in time whenever they face the challenge of inadequate funds. Nevertheless, financial institutions such as banks should be more close to learning institutions in order to ease the attainment of credits to graduates who wish to become entrepreneurs by starting their own firms rather than being employed. Also, policy makers could employ measures that include facilitation of access to financial services, funding and adding more room for various collateral or security alternatives.
§ Avoiding the use of irrelevant competition strategies which are beyond their abilities and resources that cannot strive the market in building construction industry.
§ Avoiding imitation of “un-owned” building construction business ideas, as most graduates and professionals tend to copy ideas from successful people, or just anyone in the industry, instead of coming up with their own ideas that can be developed into viable business plans.
§ Avoiding biasness by giving equal opportunities in all aspects to registered graduate quantity surveyors and architects in order to build their ability to open up or start their own building construction firms. This is important because most employers normally bind them and limit their level of thinking and creativity.
§ Government taking more initiatives to support and equip the registered graduate quantity surveyors and architects with relevant skills through the education system. Basically, entrepreneurship training is important during all levels of education, including at the tertiary level, but also to people who may not be enrolled at a university.
§ Removal of institutional bureaucracy and reducing time and costs in processing permits, business registration, and taking strict measures against corruption and collusion.
§ Availability of all information needed on building construction entrepreneurial business, and mentorship from successful people in the industry, alongside having complete and accurate records.
§ Improvement of infrastructure and services such as road, airports, and seaports, electricity supply, water supply, telecommunication etc., in order to build a successful and stable building construction industry.

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