Successful Entrepreneurship

Successful Entrepreneurship

Confronting Economic Theory with Empirical Practice

C. Mirjam van Praag

Mirjam van Praag compares and contrasts the economic theory of entrepreneurship with determinants of successful entrepreneurship derived from empirical evidence, in an attempt to discover what makes for an accomplished entrepreneur. The author’s state-of-the-art historical, theoretical and empirical research on successful entrepreneurship – all from an explicit economic perspective – comprehensively addresses questions such as: ‘What are the factors that influence individuals’ decisions to start a business venture as opposed to working as an employee?’ and ‘What are the individual characteristics that make one successful as an entrepreneur?’ thereby supporting or dispelling various existing myths. Individual factors contributing to the success of entrepreneurs that are considered include, amongst others, human capital, financial capital and psychological traits. The importance of such factors for the various phases of entrepreneurship, including start-up, delivery and performance is also measured.

Chapter 1: Introduction: Successful Entrepreneurship

C. Mirjam van Praag

Subjects: business and management, entrepreneurship

Extract

That the existence of a problem of knowledge depends on the future being different from the past, while the possibility of the solution of the problem depends on the future being like the past. (Knight [1921] 1971, p. 311) Relevance In this book I confront economic theory about entrepreneurship with the determinants of successful entrepreneurship that I find in empirical practice. Before presenting the results of my investigation of these determinants, the relevance and importance of the subject of entrepreneurship in general, and the determinants of successful entrepreneurship in particular are discussed. Today, most economists and other practitioners of behavioural sciences as well as politicians will readily admit the importance of the entrepreneur’s role in society. Entrepreneurs are held responsible for economic development, by introducing and implementing innovative ideas. These ideas include product innovation, process innovation, market innovation and organizational innovations. The (successful) implementation, initiated by entrepreneurs, of these new ideas gives rise to the satisfaction of (new) consumer wants and to the creation of firms. The created firms engender economic growth and supply jobs for the working population. Hence, by stimulating both a product and a labour market, entrepreneurs can be given credit for a considerable contribution to the economy. These are the benefits pertaining to successful entrepreneurship. Unfortunately, not all entrepreneurs are successful. Too many of them fail: they do not arrive at the stage of employing personnel; they are not in a position to turn their business into a sufficiently profitable organization; their...