This chapter is concerned with understanding those human capital factors which predict higher or lower levels of start-up financing. The government agencies and authorities devote substantial amounts of resources to promoting and assisting start-up businesses in the United Kingdom (UK), and beyond. To the extent that undercapitalisation associates with poorer survival prospects, appreciating the non-financial factors influencing capitalisation ought to better inform interventions. The data used are from a large-scale survey of UK small and medoium-sized enterprises (SMEs). The results show that financial qualifications or training, habitual entrepreneurs and exporting firms all have higher amounts of start-up finance. The results also show that female-led businesses have lower start-up finance compared to male-led businesses. Taken together, the results suggest that policy-makers should be focused on developing human capital, or entrepreneurial characteristics, rather than attempting to push more money into markets.
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Paul Robson, Tyler Chamberlin and Mark Freel
David Smallbone, Markku Virtanen and Arnis Sauka
Alexander Chepurenko, Vladimir Elakhovsky and Ekaterina Popovskaya
The chapter, based on the results of a survey conducted in 2011, deals with the factors explaining the uneven dissemination of entrepreneurial activity in Russia’s regions using the methodology of the Global Entreprenership Monitor (GEM) and a regionally representative sample of the adult population (N = 56 900). Most results do not confirm the evidence of the relevant literature dealing with Western economies: namely, a higher density of small and medium-sized enterprises (SMEs) does not guarantee the prevalence of opportunity-driven entrepreneurs; only a rather low correlation between the level of urbanization and the general Total Early-Stage Entrepreneurial Activity (TEA) index level could be found; the higher the level of urbanization, the higher also the prevalence of opportunity-driven early entrepreneurship; the correlation between unemployment and the share of necessity-driven early entrepreneurship in both urban and rural settlements is insignificant. Moreover, the level of well-being correlates with the share of opportunity-driven early entrepreneurship on the regional level. However, the correlation between both well-being (expressed in terms of both factual consumption as well as gross regional product per capita) and the TEA is non-significant. When both perceived opportunities to start a new venture and self-efficacy (especially) are higher, the TEA in respective regions is higher as well; but an analogous hypothesis for settlements types was denied.
Urve Venesaar and Merle Küttim
Entrepreneurship is widely acknowledged as a main driver of regional development, but substantial and persistent differences exist in entrepreneurial activity across nations and regions, especially core and peripheral areas. These differences can be explained using a cognitive approach that allows analysing entrepreneurship through entrepreneurs’ motivations and perceptions, generating attitudes and intentions which determine behaviours. The aim of the chapter is to identify and compare individuals’ entrepreneurial perceptions in core and peripheral regions, and assess their connection with entrepreneurial activity in different phases of entrepreneurship. It is based on the Estonian Global Entrepreneurship Monitor (GEM) 2013 data involving 1741 respondents including micro, small and medium-sized enterprises. The chapter shows that good entrepreneurial opportunities for starting a business are perceived by potential entrepreneurs in the periphery, although realising the intentions to start with business is problematic in the periphery due to the restrictions stemming from individual and socio-cultural perceptions or other formal and informal factors. The results of the study contribute towards explaining the differences in the activity levels of different phases of entrepreneurship in the selected regions (core and periphery) and towards finding policy proposals on how to support the growth of entrepreneurial activity in the periphery.
Colm O’Gorman and Declan Curran
Encouraging entrepreneurship is a central component of industrial policy in many countries. This chapter investigates how Irish policy-makers have sought to influence the extent and nature of entrepreneurship in Ireland. The authors describe Ireland’s industrial policy and Ireland’s entrepreneurship policy, focusing on the period since 1958. They review critiques of Irish policy. Using data from the Global Entrepreneurship Monitor (GEM) they present evidence of the outcomes of entrepreneurship policy. They conclude with a discussion of how the Irish policy experience might inform policy-makers in the ‘new’ Europe. They argue that lessons for policy-makers include: (1) do not pursue stand-alone entrepreneurship policies; (2) target entrepreneurship policies; (3) measure the success of entrepreneurship policies in terms of the impact of entrepreneurship, rather than in terms of increases in the rate of entrepreneurship; and (4) be patient, as industrial development takes time.
Edited by David Smallbone, Markku Virtanen and Arnis Sauka
Christos Kalantaridis, Svitlana Slava, Olga Savchenko and Oleksandra Gumenna
The past 20 years or so have been marked by growing consensus among researchers and policy-makers regarding the importance of innovation and institutions in economic performance. Institutions are particularly important in facilitating access to external (to the enterprise) knowledge resources in the merging open innovation paradigm. However, this function (of institutions) is both under-researched and conceptually questionable in post-socialist countries. They have embarked on a process of large-scale discontinuous change away from planned towards market economy: thus, institutions in these countries remain ‘different’ from those prevailing in advanced market economies. Within this context this chapter sets out to explore the strategies developed by enterprises operating in post-socialist institutional settings in order to access and use knowledge in the process of introducing innovation. Drawing on data from the case of Ukraine, a laggard in the transformation process, the study shows that connectedness and disconnectedness and even the concept of geographical proximity itself may be viewed very differently between (and within) different types of enterprises and regions. This has implications both for horizontal relationships with enterprises (that span global boundaries) as well the regional innovation system and its development. More specifically, the connectedness of the most radical Ukrainian innovators with Europe, and disconnectedness from the region, raises concerns about their ability to act as champions advancing the development of a strong regional system of innovation.
David Smallbone, Markku Virtanen and Arnis Sauka
The importance of innovative globalising high-tech small and medium-sized enterprises (SMEs) in the economy has grown particularly for small emerging countries because of the need for the balanced development of their innovation system, knowledge-based economy and society. Technology start-ups able to globalise from inception in the literature are called ‘born global’ (BG) companies. The chapter aims to study the internationalisation trajectories of BGs in the developing entrepreneurial ecosystem framework of the emerging knowledge economy. The author supposes that value system and networks of BGs are part of the general entrepreneurial ecosystem, and the factors leading to early internationalization are new market conditions, technological advantages and entrepreneurial learning. The three case study companies come from different fields: mobile payment _ Mobi Solutions; remote premises surveillance technology – Defendec; and smart pot and garden systems _ Click & Grow. The case studies demonstrate the different globalisation trajectories of start-ups depending on the maturity of the entrepreneurial ecosystem. The conclusion proposes that shortening the start-up period, increasing the number of success stories, and increasing the intensity of start-up creation indicate the maturity of the entrepreneurial ecosystem; and that the ecosystem itself has become more global than ever before.
Anna Rogut and Bogdan Piasecki
Eastern Poland is among areas characterised by weaker potential. The smart specialisation concept offers additional opportunities for innovation development to Eastern Poland, alternately assuming forms of an creative or imitative innovation model. The creative innovation model reminds investment or catching-up strategies of technological advancement, described in economics literature, which are applied by many emerging economies, including South Korea, China, Brazil and India, with different degrees of success. The imitative innovation model is characterised by a relatively high risk, particularly in the conditions of a relatively low development potential and absence of support to the local industrial base, which is necessary for foreign investments. In the present situation, the imitative innovation model does not guarantee creation of sustainable mechanisms that would reduce the development distance relatively fast. That is why fast implementation of the creative innovation model is a more recommended model for Eastern Poland. The chapter is devoted to the conditions necessary for effective implementation of this innovation model in Eastern Poland.