Purpose

The purpose of this paper is to gain insight into the reasons why most Tanzanian graduates do not consider entrepreneurship as an attractive career option despite dire labor market conditions, while a small number of them are able to benefit from local opportunities.
Design/methodology/approach

Utilizing insights from capability and social capital perspectives, a qualitative investigation based on interviews, group discussions and document analysis was undertaken to explore how this phenomenon can be explained and remedied.
Findings

This study shows that many graduates value entrepreneurship as a potential career but many find their way to be act upon these aspirations blocked. Indeed, actual entrepreneurial capability is only available to a minority of graduates with access to powerful connections who are able to benefit from technological and financial conversion factors. Most graduates cannot benefit from these conversion factors due to the lack of the necessary social capital to break through to the legal, tax, financial and cultural systems. Hence, the authors argue that social capital itself is actually a critical conversion factor toward developing entrepreneurial capability.
Research limitations/implications

The insight formulated in this study are based on a qualitative analysis of the Tanzanian context and formulated specifically for this particular context. At the same time, the country shares many characteristics with other countries in Africa, many of which are struggling to move toward a more entrepreneurial society. Hence, the recommendations may partially be transferable beyond the specific Tanzanian situation. Theoretically, the notion that social capital should be considered as a key conversion factor enabling aspiring entrepreneurs in translating valued functionings into actualized functionings and thus toward enhancing entrepreneurial capability opens up novel avenues for empirical research into how entrepreneurship can be stimulated.
Social implications

This study searches for conversion factors from the actual “functioning” toward the real “capability” allowing to succeed as a new graduate and find that social capital itself might act as the critical conversion factor. That brings the authors to the recommendations for policy makers, educators and media, argued in such a way that the entrepreneurial capability of young graduates and their ability to tap into relevant social capital can be enhanced.
Originality/value

The combination and integration of the Sen’s capability approach with social capital perspectives offers a novel way to explain difference in responses to the Tanzanian institutions and their ability to act upon a valued functioning such as opportunity-driven entrepreneurship.