Chapter 2: A Human Capital Approach to Entrepreneurship
2. A human capital approach to entrepreneurship Introduction The vast and diverse body of entrepreneurship research lacks agreement on the definition, scope and theory of the field (Gartner, 1990, 2001; Low, 2001). One source of confusion stems from the heterogeneity of entrepreneurship. For example, as intimated in the previous chapter, entrepreneurship can involve the creation, purchase and even inheritance of a business. Further, there is a need to acknowledge heterogeneity among entrepreneurs resulting from variations in their experience. We have argued therefore, that it is important to distinguish between novice (individuals with no prior business ownership experience) and habitual entrepreneurs (individuals with prior business ownership experience). In the previous chapter, a theory and policy case for distinguishing between these groups of entrepreneurs was provided. In this chapter we develop a theoretical framework that will allow us to explore and understand differences between these entrepreneurs. One of the difficulties faced by entrepreneurship scholars in developing an appropriate theory arises from the multi-disciplinary nature of the phenomenon. Any theory of entrepreneurship must be rooted in the social sciences of psychology, sociology, economics and politics (Amit et al., 1993; Bygrave, 1993). ‘There is no doubt that a theory of entrepreneurship should reflect a range of decision theoretic, economic and psychological and other dimensions. It is unclear, however, what core aspects of entrepreneurship should be reflected in such a theory and how the various perspectives can be effectively integrated’ (Amit et al., 1993: 824). Low and MacMillan (1988) argued that any theoretical model or...
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