Profiling the Growth Oriented Nascent Entrepreneur in the US - Evidence from Representative Samples

Abstract

High growth new firms are of considerable interest, in no small part due to their disproportionate contribution to overall job growth; among the 13 million nascent present in the US in 2001, the 675,000 that aspire to provide 50 or more jobs five years after the firm birth would account for 40% of all new firm jobs. Estimating the impact of demographic (entrepreneur-related) and organizational variables that influence firm growth expectations at the time of business start-up is a major step toward understanding the unique features of high growth new firms. This assessment makes use of two publicly available, harmonized data sets, namely GEM 2001 data from the US and the first PSED data set, assembled from 1998-2003. Gender, start-up team size, and features of the opportunity recognition process are statistically significant factors affecting projected job growth in the first five years of new firm operation; educational attainment, age, and a focus on manufacturing did not have a significant impact. Comparison of answering patterns to opportunity recognition items in GEM vs. PSED suggests that extreme caution is needed when wording questionnaire items; individuals would rather describe themselves as planning entrepreneurs instead of necessity entrepreneurs.