Understanding Entrepreneurial Competence, Innovation and Performance

Abstract

Entrepreneurship continues to be important in factor-based industries such as leather in Africa. It has been mooted as an area of intervention in Kenya, where the leather industry has unrealized potential and is faced with globalized competition. Meanwhile, entrepreneurial competence (EC) is a less studied concept in the African region. The purpose of this paper was to establish the relationship between EC as a behavioural construct, innovation and performance from an industry ecosystem perspective. It was based on an analysis of entrepreneurial behaviours of key informants from value-system actors of Kenya’s leather industry and the expected business outcomes of innovation and performance. The study applied a cross-sectional survey of actors in diverse industry value-system. Mixed sampling was carried out of members of Leather Articles Entrepreneurs Association (LAEA) and associated value-system actors as industry representatives. Fifty-two responses were found to be valid for analysis with a 76% response rate. SPSS v27 was used for exploratory and inferential analysis to establish validity of constructs and their relationship. Factor analysis showed entrepreneurial competence was a multi-dimensional second-order latent construct comprising three sub-variables, namely pursuing, networking and creating. The study found that both entrepreneurial competence and innovation determined performance. Further, innovation did not mediate the entrepreneurial competence-performance link. This study affirmed earlier research on entrepreneurial competence as a behavioural construct but did not confirm a mediating role of innovation in entrepreneurial competence-performance link. Enhancement of entrepreneurial competence and innovation of value-system actors in an industry ecosystem can improve business performance. Further research in different contexts is recommended on the factors and methods applied here.