Operationalizing opportunities in entrepreneurship research: use of data envelopment analysis

Despite the impressive development of substantive theories in entrepreneurship, without the development of measurement theories, further advancement of the field is problematic. In particular, the notion of opportunities, central to entrepreneurship research, requires adequate macro-level operationalization. We demonstrate how to employ data envelopment analysis (DEA) to operationalize not only innovative opportunities, but also technological arbitrage opportunities. We provide an illustrative example based on a sample of 66 countries during the period of 1993–2002. We include estimates of innovative and arbitrage opportunities for possible use by other scholars, discuss the promise and limitations of such estimates, demonstrate how both innovative and arbitrage opportunities correlate with the rates of entrepreneurial activity, and suggest several possible directions for future research.     

Does the innovator role affect the perceived potential for growth? analysis of four types of new, technology-based firms

The present study analyzes interrelationships between systemic determinants, such as the technology applied by the firm, and the evolution of the firm. Four innovator roles of new, technology-based firms are analyzed: application innovators, market innovators, technology innovators and paradigm innovators. The analysis of an empirical sample of 392 new, technology-based firms in Finland finds that application innovators and technology innovators are the oldest and largest among these four groups of firms. On the other hand, the largest potential for growth can be found among market innovators and paradigm innovators. The analysis also suggests that the contentions of the market-based approach to research on new, technology-based firms apply particularly well to application innovators and to market innovators. On the other hand, the contentions of a systemic approach to research on new, technology-based firms may be better suited to paradigm innovators and to technology innovators.     

Employment Generation Potential of New, Technology-Based Firms During a Recessionary Period: The Case of Finland

This article analyzes the employment generation potential of new, technology-based firms during a recessionary period. The empirical data is from Finland, a country that was hit particularly hard by the economic recession between years 1990 and 1993. In spite of the recession, the number of NTBFs (new, technology-based firms) rose by 17% from 1986 to 1993. In traditional manufacturing industry branches, the overall employment fell by as much as 33% during the same period. Alternative hypotheses to explain the increase in the importance of NTBFs are presented and discussed in the light of research findings. Both flexible specialization and recession-push hypotheses receive support in the empirical data.     

The Network Embeddedness of New,Technology-Based Firms: Developing A Systemic Evolution Model

The present paper focuses on the interactive relationship between new, technology-based firms and their network environment. The paper analyzes the mechanisms through which new, technology-based firms become immersed in innovation and manufacturing networks. The concept of embeddedness is developed and used to depict such mechanisms.A systemic evolution model of new, technology-based firms is proposed. The model depicts the evolution of new, technology-based firms in manufacturing and innovation networks. The model emphasizes the catalyzing role of new, technology-based firms in national systems of innovation.Network embeddedness is empirically explored in five case studies of Finnish new, technology-based firms. The systemic evolution model serves as an interpretative scheme for the case studies. The analysis of the organic relationship between new, technology-based firms and their systemic environment also serves to reveal the implications of embeddedness for new, technology-based firms.     

Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003

The Global Entrepreneurship Monitor research program was designed as a comprehensive assessment of the role of entrepreneurship in national economic growth. The conceptual model reflected in a wide range of factors associated with national variations in entrepreneurial activity and the major contextual features. Empirical tests of the many relationships in the model required four major data collection activities: adult population surveys, unstructured interviews with national experts, self-administered questionnaires completed by national experts, and assembly of relevant standardized measures from existing cross-national data sets. Adult population surveys were implemented to identify those entrepreneurially active, which required a set of precise criteria and careful processing to ensure harmonized counts and prevalence rates across 41 countries. Existing evidence on measures of reliability indicates that the measures met contemporary standards and the project was cost-effective.     

Entrepreneurship,Innovation and Economic Growth: Evidence from GEM data

Studies on the impact of technological innovation on growth have been largely mute on the role ofnew firm formation. Using cross-sectional data on the 37 countries participating in GEM 2002, this paper uses an augmented Cobb–Douglas production to explore firm formation and technological innovation as separate determinants of growth. One area of interest is the contrast between different types of entrepreneurial activities as measured using GEM Total Entrepreneurial Activity (TEA) rates – high growth potential TEA, necessity TEA, opportunity TEA and overall TEA. Of the four types of entrepreneurship, only high growth potential entrepreneurship is found to have a significant impact on economic growth. This finding is consistent with extant findings in the literature that it is fast growing new firms, not new firms in general, that accounted for most of the new job creation by small and medium enterprises in advanced countries.     

What Drives Micro-Angel Investments?

Despite of the significant role of informal venture capital in the financing of new entrepreneurial ventures, there is little research explaining the factors determining the propensity of individuals to make microangel investments. Building on two theoretical frameworks, a social psychological theory of planned behavior and an economic theory on the determinants of demand for risky assets in household portfolios, we develop a set of hypotheses predicting the propensity of individuals to make informal investments in new businesses owned by others. In our analysis we test whether the determinants of micro-angel investments are similar when investing in a business owned by a close family member versus more distant business. The hypotheses are tested using data from 6007 interviews of Finnish adults carried out in the Global Entrepreneurship Monitor program in 2000–2002. The findings show that the theoretical frameworks have more power in explaining investments in firms not owned by close family members. The study provides new understanding of the differences in the drivers of different types of micro-angel investments.     

The morality of spending in Finnish youth consumer culture

This article discusses the morality of spending (i.e. the unnecessary spending) as well as the freedom of spending in Finnish consumer narratives written by 16‐ to 19‐ year‐old pupils. First, the study explores different meanings of the unnecessary spending discourse. Second, the study argues that young consumers are using a wastrel metaphor (i.e. a squanderer, a prodigal son/daughter) as a symbol of liberation from the shame of spending. A narrative research approach is applied for the collection and analysis of data and illustrating the results. The qualitative data were collected in five upper secondary schools between November 2001 and May 2002. The morality of spending comprises various significances, although the discourse is often pleasure‐oriented for youth. Some youngsters define the unnecessary spending as a criticism of the consumer society. Furthermore, the discourse strengthens self‐control as well as helps to arrange both positive and negative consumer experiences. Thus, the morality of spending is a part of the process of growing up as a consumer and constructing a consumer identity.     

National appropriation of university innovations: The failure of ink jet technologies in sweden

The present study analyzes interrelationships between systemic determinants, such as the technology applied by the firm, and the evolution of the firm. Four innovator roles of new, technology-based firms are analyzed: application innovators, market innovators, technology innovators and paradigm innovators. The analysis of an empirical sample of 392 new, technology-based firms in Finland finds that application innovators and technology innovators are the oldest and largest among these four groups of firms. On the other hand, the largest potential for growth can be found among market innovators and paradigm innovators. The analysis also suggests that the contentions of the market-based approach to research on new, technology-based firms apply particularly well to application innovators and to market innovators. On the other hand, the contentions of a systemic approach to research on new, technology-based firms may be better suited to paradigm innovators and to technology innovators.     

A theoretical grounding and test of the GEM model

The Global Entrepreneurship Monitor model combines insights on the allocation of effort into entrepreneurship at the national (adult working-age population) level with literature in the Austrian tradition. The model suggests that the relationship between national-level new business activity and the institutional environment, or Entrepreneurial Framework Conditions, is mediated by opportunity perception and the perception of start-up skills in the population. We provide a theory-grounded examination of this model and test the effect of one EFC, education and training for entrepreneurship, on the allocation of effort into new business activity. We find that in high-income countries, opportunity perception mediates fully the relationship between the level of post-secondary entrepreneurship education and training in a country and its rate of new business activity, including high-growth expectation new business activity. The mediating effect of skills perception is weaker. This result accords with the Kirznerian concept of alertness to opportunity stimulating action.