Growth effects of human capital, innovation, and entrepreneurial orientation in South African SMEs post-COVID-19

Abstract

Orientation: This article explores the growth dynamics of small and medium-sized enterprises (SMEs) in South Africa, a unique context within the global landscape, particularly post-coronavirus disease 2019 (COVID-19). Research purpose: The study aims to develop and test a theoretical model to explore the relationships among entrepreneurial orientation (EO), human capital, innovation, motivation and firm’s growth post-pandemic. Motivation for the study: There is an urgent need to understand the critical factors influencing the growth of SMEs in South Africa, particularly during the COVID-19 pandemic. Research design, approach and method: A quantitative and cross-sectional survey design was employed. A structured questionnaire was used to gather 497 responses from small firm owner-managers. Data were analysed using Smart PLS (version 3.2.9) for partial least squares structural equation modelling (PLS-SEM). Main findings: Key findings indicate that innovation is a crucial mediator between EO and growth. In contrast, the impact of human capital on growth varies in the post-pandemic context. Practical/managerial implications: The implications emphasise the need for targeted strategies that enhance EO, human capital, innovation and motivation within SMEs, ultimately supporting their growth and resilience after COVID-19. Contribution/value-add: This study contributes to the literature by offering actionable insights for SMEs and policymakers, underscoring the importance of fostering EO, human capital, innovation and motivation to navigate post-pandemic challenges.