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 3: Willingness and Opportunity to Start Up as an Entrepreneur

C. Mirjam van Praag

Subjects: business and management, entrepreneurship


The law of ‘survival of the fittest’ states that those organisms tend to survive which are best fitted to utilize the environment for their own purposes. Those that utilize the environment most, often turn out to be those that benefit those around them most; but sometimes they are injurious. Conversely, the struggle for survival may fail to bring into existence organisms that would be highly beneficial. (Marshall [1890] 1930, p. 242) Introduction Governments are by and large of the opinion that new firm formation is necessary for a healthy economy and that ‘natural’ entrepreneurship supply is insufficient. As a result, governments started to provide encouragement programmes for self-employment, and studies to evaluate their effectiveness became desirable. The objective of self-employment encouragement programmes is to stimulate potential successful entrepreneurs to switch to this occupational status, or to provide enthusiastic would-be entrepreneurs with an opportunity to become entrepreneur. In order to recruit programme participants efficiently, these categories of would-be entrepreneurs should be located. This calls for insight into the individual decision process. In this chapter, I shall distinguish between opportunity and willingness to become an entrepreneur. Individuals only become entrepreneurs when they are willing and have the opportunity to do so. This chapter aims at identifying individual determinants of both opportunity and willingness. Observing someone as being an entrepreneur implies that the individual has both been willing and had the opportunity to switch to this occupational status. If either willingness (motivation) or opportunity (ability and/or capital) is...

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