Entrepreneurial Processes in a Changing Economy

Entrepreneurial Processes in a Changing Economy

Frontiers in European Entrepreneurship Research

Frontiers in European Entrepreneurship series

Edited by Friederike Welter, David Smallbone and Anita Van Gils

The contributors take a closer look at what constitutes entrepreneurial processes; how entrepreneurs develop their businesses and access critical resources in times of crisis; and which roles knowledge and innovation play in continuous venture development. The chapters included in this volume give a flavour of the themes and approaches featuring in contemporary entrepreneurship and small business research in Europe.

Chapter 4: The Role of the Entrepreneur in Determining Growth: A Longitudinal Analysis of a New Venture

Colm O’Gorman

Subjects: business and management, entrepreneurship

Extract

Colm O’Gorman INTRODUCTION 1. New and small firms that grow, particularly those that grow rapidly, make a disproportionally large contribution to regional and national economic growth. In past decades the focus of enterprise policies in many countries was typically on increasing the number of start-ups. However, in recent decades policy makers have become more aware of the impact of start-ups, and have sought interventions that increase the ‘quality’ of start-ups, that is start-ups that survive and grow (Greene et al. 2008). This chapter explores new firm growth, and in particular, the role of the entrepreneur in a new venture characterized by organic growth. The motivation for this chapter is to contribute to the debate in the entrepreneurship literature on the determinants of growth. Recently, Greene et al. (2008) argued that growth is determined more by choice of location and of sector, leading them to claim that it is in fact ‘chance’ that matters in growth. They concluded that researchers must reconsider what factors explain growth (Greene et al. 2008: 242). Our review both of our own results and of those of other scholars has emphasized that chance plays a key role, if not the key role in the survival and growth of new businesses. Researchers, in our view, have to highlight this, rather than brush it under the carpet by placing their emphasis upon the factors that only modestly influence performance. We contribute to this debate by using Penrose’s Theory of the Growth of the Firm to explore the role...

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