The development of small and medium enterprises in Tanzania: The role of entrepreneurial skills

Entrepreneurial skills increasingly became a critical driving force for economic growth and are widely recognised as essential for economic dynamism. This study aimed to assess the importance of the skills available for the development of small and medium enterprises in Tanzania, specifically focusing on participants who are owners of small and medium-scale businesses within the Coast Region. Specifically, the study examined three key skills: communication, business management, and creativity/innovation. A quantitative research approach was adopted, using structured questionnaires distributed to 168 respondents. Descriptive and regression analyses were employed to examine respondent characteristics and test the hypothesised relationships among variables. The results indicated that communication skills have a positive and statistically significant effect on small and medium enterprises development (B = 0.196, β = 0.195, t = 3.708, p < 0.001, 95% CI [0.092, 0.301]). Creativity and innovation skills exhibited a stronger and highly significant influence (B = 0.748, β = 0.763, t = 17.229, p < 0.001, 95% CI [0.662, 0.833]). In contrast, business management skills showed a weak and statistically insignificant effect (B = 0.035, β = 0.032, t = 0.844, p = 0.400, 95% CI [-0.047, 0.116]). The regression model was statistically significant and explained a substantial proportion of variance in small and medium enterprises development (R² = 0.941, Adjusted R² = 0.940, F (3,164) = 873.998, p < 0.001), with no evidence of autocorrelation (Durbin-Watson=1.984). The study concluded that communication, creativity, and innovation were key determinants of small and medium enterprises development, while business management skills played a limited role. These findings provide important implications for policymakers, educators, and development practitioners in designing targeted interventions to promote sustainable small and medium enterprises growth in Tanzania