Growth Of New Ventures Research Articles

Attitude Towards Entrepreneurship Education and New Venture Creation

Does an individual's positive attitude towards entrepreneurship education promote the growth of new ventures? It appears that it does. The empirical results presented in this paper support a prima facie claim that a relationship exists between attitude towards entrepreneurial education and business start-up. The aim of this paper is to investigate the hypothesised positive relationship between new venture founding and attitude towards entrepreneurial education (AEE). Limited if any research on new venture founding in the past has explored the contribution of AEE in business start-ups. A survey is carried out on a large sample (more than 15,000) of tertiary students residing in Singapore. In analysing the dataset, we have controlled for various factors in the regression analysis. Due to the limitations of our study, we are cautious not to assert any causal link between these 2 variables. The implications of the results to policy makers and educators are discussed along with suggestions for future research in order to refine our present understanding of these relationships.

ATTITUDE TOWARDS ENTREPRENEURSHIP EDUCATION AND NEW VENTURE CREATION

Does an individual's positive attitude towards entrepreneurship education promote the growth of new ventures? It appears that it does. The empirical results presented in this paper support a prima facie claim that a relationship exists between attitude towards entrepreneurial education and business start-up. The aim of this paper is to investigate the hypothesised positive relationship between new venture founding and attitude towards entrepreneurial education (AEE). Limited if any research on new venture founding in the past has explored the contribution of AEE in business start-ups. A survey is carried out on a large sample (more than 15,000) of tertiary students residing in Singapore. In analysing the dataset, we have controlled for various factors in the regression analysis. Due to the limitations of our study, we are cautious not to assert any causal link between these 2 variables. The implications of the results to policy makers and educators are discussed along with suggestions for future research in order to refine our present understanding of these relationships.

Knowledge‐intensive entrepreneurship and human capital

This paper discusses human capital in connection with the entrepreneurial processes in knowledge‐based new ventures. Until recently, research on the founding of new ventures has focused mainly on the personal characteristics of entrepreneurs, but this trait approach tends to underestimate the role of crucial skills. The findings of this paper suggest that it is not so much inherent personality traits that influence the foundation and growth of new ventures as previous employment and entrepreneurial experience. The longer the career path prior to founding the venture, the more experience an entrepreneur has accumulated. Age thus seems to have a positive influence on the success of a newly founded venture. Furthermore, the dimensions of human capital, experience and previous employment seem to be essential in building the networks that help secure both early and continuing finance for the ventures.

New venture strategies in a developing country: Identifying a typology and examining growth patterns through case studies

This study explores the static and dynamic patterns of new venture strategy and growth. We developed a three-dimensional integrative framework on new venture strategies, proposed seven strategic types, and examined the dynamic patterns of internationalization and growth of new ventures. From successful new venture cases in Korea, each strategic type shows differences in environmental characteristics and competitive behaviors. Also, we found that new ventures enter the global market by following two-step internationalization processes. We observed two different growth patterns influenced by initial conditions, entrepreneur's management ability, and technology strategy of new ventures.

The Growth of the Firm: The Legacy of Edith PenroseThe Growth of the Firm: The Legacy of Edith Penrose, edited by PitelisChristos. New York: Oxford University Press, 2002.

1. Introduction and Overview 2. Edith Elura Tilton Penrose: Life, contribution, and influence 3. Mrs Penrose and Neoclassical Theory 4. The Significance of Penrose's Theory for the Development of Economics 5. Edith Penrose and Economics 6. Hercules and Penrose 7. The Growth of New Ventures: Analysis after Penrose 8. A Theory of the (Growth of the) Transnational Firm: A Penrosean perspective 9. Edith Penrose, Economics, and Strategic Management 10. Edith T. Penrose and Ronald H. Coase on the Nature of the Firm and the Nature of Industry 11. Regional Growth Dynamics: A capabilities perspective 12. Mismatching by Design: Explaining the dynamics of innovative capabilities of the firm with a Penrosean mark 13. Innovation, Profits, and Growth: Penrose and Schumpeter 14. The US Corporate Enterprise and 'The Theory of the Growth of the Firm' 15. Management Competence, Firm Growth, and Economic Progress

Market information scanning activities and growth in new ventures: A comparison of service and manufacturing businesses

Recent technological developments create the need for new ventures to monitor the market environment. The various techniques used to acquire market information differ depending on the venture but are related to the ultimate success of the new venture. This exploratory research investigates market information scanning practices in a sample of 120 new ventures. Types, methods, and sources of market information are compared in service and manufacturing ventures, and relationships between these practices and growth are assessed. Results of X 2 tests show selective differences between service and manufacturers as a whole and when growth is considered. Multiple regression analysis showed manufacturers experiencing growth acquired information about competitors' sales and market share and depended on personal contacts and networks. Scanning activities were not highly related to growth in service firms.

A taxonomy of business start-up reasons and their impact on firm growth and size

Based on a survey of 405 principal owner-managers of new independent business in Great Britain this paper explores two research questions— are there any differences in the reasons that owner-managers articulate for starting their businesses, and, if there are, do they appear to affect the subsequent growth and size of the businesses? The results of the study indicate an affirmative answer to the first question. From the 23 diverse reasons leading to start-up that were identified in the literature, an underlying pattern emerged via the Principal Components Analysis. Moreover, these were similar to those found in earlier studies. Thus, five of the seven components identified by the model correspond to those identified by Scheinberg and MacMillan (1988) in their eleven-country study of motivations to start a business: “Need for Approval,” “Need for Independence,” “Need for Personal Development,” “Welfare Considerations,” and “Perceived Instrumentality of Wealth.” Two further components were identified by this current study. The first vindicates the decision to add a question not included in the previous study that related to “Tax Reduction and Indirect Benefits,” and the second, the desire to “Follow Role Models” was identified by Dubini (1988) in her study in Italy. In order to take account of possible multiple motivations in the start-up period, cluster analysis was used to provide a classification of founder “types.” The seven generalized “types” of owner-managers were named as follows—the insecure (104 founders), the followers (49 founders), the status avoiders (169 founders), the confused (15 founders), the tax avoiders (18 founders), the community (49 founders), and the unfocused (1 founder). Further, evidence from the final discriminant analysis model suggested that the seven-cluster classification of owner-managers was appropriate and optimal. However, despite these clear differences between clusters, this was not found to be an indicator of subsequent size or growth, as measured by sales and employment levels. The answer to the second research question would be in the negative. Therefore, we conclude that, whereas new businesses are founded by individuals with significantly different reasons leading to start-up, once the new ventures are established these reasons have a minimal influence on the growth of new ventures and upon the subsequent wealth creation and job generation potential. This result is important for investors and policy-makers. It suggests that strategies for “picking winners” solely based upon the characteristics of owner-managers and their stated reasons for wanting to go into business are not supported. Thus, for example, targeting scarce resources to those with high opportunistic and materialistic reasons for venture initiation would miss those with a wider sense of community or those with personal needs for independence who establish similarly sized businesses with comparable levels of wealth creation.

International perspectives on the supply of informal venture capital

Despite major changes in the number and range of sources of finance for new and small ventures in the United Kingdom in recent years, there continues to be a shortage of risk capital for ventures actively seeking external equity finance. In the United States the informal venture capital market plays a major role in filling this equity gap, particularly in the early stages of venture development. However, there is little comparable information on the size of the informal venture capital pool in the United Kingdom or other European economies, despite recent recognition that the apparent underdevelopment of this market in the U.K. represents a major barrier to the development and growth of new ventures. This paper, therefore, presents the first analysis of the informal venture capital market in the U.K. and compares the characteristics and attitudes of U.K. informal investors with those in the U.S. The data reported in this paper have been obtained from a combination of postal survey and snowball sample techniques that generated useable information from 86 informal investors. Informal investors are playing an important role in venture financing in the U.K. in three ways: they make small scale investments in new and early stage ventures, where the equity gap is most significant; they are more permissive in their financing decisions than the formal venture capital industry in terms of having lower rejection rates, longer exit horizons, and lower target rates of return; and they invest locally and can thereby close the regional equity gap arising from the overconcentration of venture capital investment in the core South-East region in the U.K. In terms of demographics, U.K. informal investors share many of the characteristics of North American informal investors: they are predominantly male, with an entrepreneurial background, financially well-off without being super-rich, and identify investment opportunities from friends and business associates. There are a number of key differences, that may be attributable to differences in contextual factors such as personal tax regimes, regulatory environments, wealth distribution, and the structure of the formal venture capital and IPO markets. For example, U.K. informal investors are significantly older than those in the U.S. reflecting the influence of higher U.K. tax rates on the rate of capital and wealth accumulation. More generally, in comparison to U.S. investors, U.K. informal investors: have more investment opportunities brought to their attention; seriously consider more proposals but invest in no more opportunities; operate independently with syndication and joint investment relatively uncommon, reducing the average total investment per financing round available to ventures; fail to identify entrepreneurs themselves as a primary source of information on investment opportunities; have higher rate of return and capital gains expectations; are slightly less patient investors; and are rather less satisfied with the overall performance of their informal investment portfolios, reflecting intercountry and intertemporal variations in investment climate and conditions. It appears, therefore, that the general inefficiency of the informal capital market identified by Wetzel (1987) (which reflects the invisibility of informal investors, the fragmented nature of the market, and the imperfect channels of communication between investor and entrepreneur) is compounded in the U.K. case. The extent to which this reflects contextual differences on the one hand or simply a slower developmental process in the U.K. will only be common methodological basis. Based on the evidence presented in this paper, however, a key conclusion is that the information networks available to U.K. informal investors are less effective than those in North America, and in particular appear to contain lower quality information and a higher degree of redundant information. Specific forms of intervention in the market by, for example, stimulating the flow of information through the promotion of informal investment networking and brokerage services along the lines of U.S. and Canadian examples such as VCN and COIN therefore appear defensible.

Manufacturing Challenges the New Breed

HE GENUS NOVUS or “new breed” of manufacturing professional has come of age. This “new breed” has achieved that delicate position of balance within the total business team from which the most significant contributions of alternative analysis and business decisionmaking emanate. Traditionally, manufacturing management was left to its own imagination to determine the producibility, reliability, and maintainability of the engineer-designed product. Today that view of the role of manufacturing has become obsolete. “Production issues” like quality assurance, design producibility, cost achievement, product performance, and sparing have given way to critical path charting of the key milestones leading to product acceptability. With its understanding of technical design and the total business picture, the “new breed” of manufacturing personnel is neither engineering’s cast-off nor the outgrowth of the top of the rank and file. The subtleties of this transformation are best exemplified in retrospect by personal manufacturing experiences over the last quarter century. In the period from 1950 through the late 1960’s, a number of major corporations, such as the General Electric Company, committed large resources to the concept of Management Training Programs. The objective was to accelerate the development of the academically trained engineer into potential middle management positions. Individualists by nature, many of these thoroughly trained businessmen were motivated by the challenges of professional mobility and personal growth. Consequently, during the 1960’s and into the 1970’s, they migrated from these companies into the middle management of other larger firms. Thus the seeds of this “new breed” were planted. During the 1970’s we saw an experienced professional emerge from the natural extension of this maturation process. At the same time, the extraordinary growth of new venture businesses like Inforex created a new demand in management for this type of professional. And the “new breed” manufacturing professional was ready to meet that challenge. Today’s manufacturing team has as one of its fundamental business premises total product involvement in the planning, development, and production phases. Manufacturing management has come of age and is an integral variable in the total business equation. From product inception and planning to the development of the business plan, personal interaction in the design phase, and cooperation with engineering over producibility, manufacturing’s “new breed” provides an awareness of the latest process technology, participates in trade-off analysis, and in