Growth-Oriented Entrepreneurship

Alan S. Gutterman

• Publisher: Business Expert Press
• Year: 2018
• ISBN:
  9781948976602
• Topic: Business
• Subtopic: Imprenditoria
• Index: Business

This book provides an extensive introduction to research on growth-oriented entrepreneurship,

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A number of different methods have been used to describe growth-oriented entrepreneurship; however, there is a consensus that there is a particularly desirable form of entrepreneurship that seeks to create and scale up businesses that will drive productivity growth, create new employment, increase innovation, promote business internationalization and achieve sustainable economic growth. Innovation is a condition of growth-oriented entrepreneurship that includes both the development and commercialization of new products and services and the development and implementation of new or improved processes that enhance productivity or reduce costs associated with manufacturing or distributing existing products. Innovation involves firms pursuing distinctive business strategies and doing new things in new ways to increase productivity, product development, sales and profitability, including finding and developing new ways of identifying the needs of new and existing customers and making and marketing products that satisfy those needs.

The goal of the launch phase for growth-oriented entrepreneurial ventures is to reach the point of scale up and common goals and activities associated with the launch phase include market disruption and penetration; gaining access to capital and markets and mentorship opportunities; organizational growth through management capacity, systems, resources (i.e., people, product and assets) management; embedding organizational culture; development of stakeholder relationships; monitoring and evaluation; and governance and reporting. This book provides an extensive introduction to research on growth-oriented entrepreneurship and continues with an assessment of attempts to create the appropriate framework conditions for growth-oriented entrepreneurship to flourish and sustain including financial support; government policies; government programs; education and training; research and development transfer; commercial and professional infrastructure; internal market openness; access to physical infrastructure; cultural and social norms; and protection of intellectual property rights. The final chapter looks at growth-oriented entrepreneurs in practice as they work to launch and growth emerging companies. This book is a unique compendium of research and analysis on a dynamic and important segment of entrepreneurship and will be useful to entrepreneurs, academics and policymakers.

CHAPTER 2

Innovation Clusters

Introduction

Entrepreneurship has become a popular career path in developed and developing countries, a phenomenon that has contributed to the intense interest in the subject shown by researchers and policymakers around the world.1 In 2011, for example, the Global Entrepreneurship Monitor (GEM), a partnership between the London Business School and Babson College that administers a comprehensive research program to produce annual assessments of national levels of entrepreneurial activity, estimated that there were 388 million entrepreneurs distributed around the globe and engaging starting and running new businesses. Many commentators, beginning with Schumpeter, have argued that entrepreneurship is crucial for understanding economic development.2 Acs and Virgill noted that “[t]he empirical evidence is ... strong in support of a link between entrepreneurship and economic growth” and that “[s]tudies have found that regional differences in economic growth are correlated to levels of entrepreneurship.3

Shane et al. were particularly interested in improving the quality and conciseness of research on how human motivations influence entrepreneurship; however, they suggested a model that may well have broader application in the design of an analytical framework for studying the various factors that influence entrepreneurship.4 Shane et al. believed that entrepreneurship was best viewed as a “process” that occurred over an extended period of time, rather than an isolated event or moment in time when a person decide whether he or she should become an “entrepreneur.” This process included a number of stages, including recognition of opportunities, development of ideas about how to pursue the ­opportunity by turning it into new products or services and, finally, execution of the activities required to harvest the desired profits from the opportunities. The execution phase involved array of tasks and activities such as evaluating the feasibility of the opportunity, product/service development, assembly of human and financial resources, organizational design and “market making” (i.e., identification and pursuit of customers). In their model, the success or failure of the entire entrepreneurial process, and the decisions made along the way, are influenced by several important factors. The motivational traits of the prospective entrepreneur is one of them; however, in order to get a complete picture it is necessary to also take into account other factors that Shane et al. felt had been ignored by previous researchers such as cognitive factors, the nature of the opportunity, and environmental conditions.5

Institutional Environment and Entrepreneurship

Several scholars have argued that the rate of new venture formation and growth is directly influenced by the institutional environment, both formal and informal, in which the venture is operating.6 New ventures, being both new and small, must struggle to gain legitimacy and survive in their external environment and one way to do that is to conform to the norms and practices that have been prescribed and sanctioned by the institutional environment. In many ways, the institutional environment limits the range of strategic options that are available to new ventures in a society7 and thus plays an important role in both the creation and destruction of entrepreneurial activities in that society.8 It is, therefore, not surprising that one area of comparative research with respect to international entrepreneurship is comparing the institutional environment of different societies as to their favorability for entrepreneurship. The need for this type of research is particularly compelling for emerging economies as they struggle to identify and implement policies that can promote economic development including policies to encourage entrepreneurs to form new ventures that hopefully create new jobs and contribute to an increase in overall economic welfare.9 In fact, several researchers have asserted that the rate and trajectory of entrepreneurial activities ...